RG

IN CONTEXT

FOCUS

Markets and firms

KEY THINKER

George Akerlof (1940–)

BEFORE

1558 English financier Sir Thomas Gresham advises that “bad money drives out good.”

1944 John von Neumann and Oskar Morgenstern publish the first attempt to analyze strategic behavior in economic situations.

AFTER

1973 US economist Michael Spence explains how people signal their skills to potential employers.

1976 US economists Michael Rothschild and Joseph Stiglitz publish Equilibrium in Competitive Insurance Markets, a study of the problem of “cherry picking” when insurance companies compete for customers.

Until US economist George Akerlof started studying prices and markets in ...

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