Elinor Ostrom and Oliver Williamson were awarded the Nobel Prize in Economics this morning, a result that was for some both surprising and expected. While Elinor Ostrom flew under the radar of the Expertly Wrapped poll, Oliver Williamson finished a respectable third place, tied with Jean Tirole. Ostrom and Williamson’s independent work on economics governance appears to be the tie that binds the two scholars. The Nobel committee also acknowledged Ostrom’s work on the governance of the commons and Williamson’s pioneering efforts to understand the firm’s role in conflict resolution.
Ostrom, a professor at Indiana University and the first woman to win the prize, was a bit of a dark horse in this race—her expertise is primarily in political science. Ostrom’s win “is part of the merging of the social sciences,” said Robert Shiller, Expertly Wrappedpoll favorite, in an interview with the New York Times. “Economics has been too isolated and these awards today are a sign of the greater enlightenment going around. We were too stuck on efficient markets and it was derailing our thinking.”
Ostrom’s work on governance in the commons has broad application, Northwestern economics and Kellogg School SEEK professor Lynne Kiesling said in a post at Knowledge Problem. “The Ostrom works… Governing the Commons and Understanding Institutional Diversity are full of rich insights that can be applied to environmental policy, regulation, economic development, and many other areas of economics and political science.”
Williamson’s pioneering work on the firm is well deserving of the prize, according to Northwestern economics professor Jeff Ely. “This prize is long overdue,” he said in a post on Cheap Talk. “The theory of the firm is one of the big ideas in economics and as far as I can tell the Nobel committee was right to trace it back to Williamson.“
Kellogg School and Northwestern economics faculty nosed ahead of the Harvard pool with their pick of Oliver Williamson (16 percent to 6 percent—and a hat tip to the Management and Strategy faculty who had the most votes for Williamson). And had they been the betting types, they could have cleaned house given his 50-to-1 odds at Ladbrokes. Ostrom’s odds at the bookmakers were just as long.