View source for Michael Spence

{{Short description|Canadian-American economist and Nobel Laureate (born 1943)}}
{{Other people}}
{{Infobox economist
| name             = Michael Spence
| school_tradition =
| color            =
| image       = A Michael Spence.jpg
| image_size       = 180px
| caption    = Spence in 2008
| birth_date       = {{Birth date and age|1943|11|7|mf=y}}<ref>{{cite web|url=https://www.nobelprize.org/prizes/economics/2001/spence/facts/|title=A. Michael Spence – Facts|website=NobelPrize.org}}</ref>
| birth_place      = [[Montclair, New Jersey|Montclair]], [[New Jersey]], US
| death_date       =
| death_place      =
| institution      = [[Harvard University]]<br>[[Stanford University]]<br>[[SDA Bocconi School of Management]]<br>[[New York University]]
| field            = [[Microeconomics]], [[labor economics]]
| alma_mater       = [[Harvard University]], <small>(Ph.D.)</small><br>[[University of Oxford]], <small>(B.A.)</small><br>[[Princeton University]], <small>(B.A.)</small>
| doctoral_advisor = [[Kenneth Arrow]]<ref name="hesis advisers">[https://www.nobelprize.org/prizes/economics/2001/spence/lecture/ ''Signaling in Retrospect and the Informational Structure of Markets'' Nobel Lecture] Retrieved September 12, 2016.</ref><br>[[Thomas Schelling]]<ref name="hesis advisers" />
| academic_advisors=
| doctoral_students=
| notable_students  =
| influences       = [[Richard Zeckhauser]]
| influenced       =
| contributions    = [[Signalling (economics)|Signaling theory]]
| awards           = [[John Bates Clark Medal]] (1981)<br />[[Nobel Memorial Prize in Economics]] (2001)
| signature        = <!-- file name only -->
| repec_prefix = e | repec_id = psp7
| thesis_title       = Market Signalling
| thesis_url         = https://www.proquest.com/docview/302682411/
| thesis_year        = 1972
}}

'''Andrew Michael Spence''' (born November 7, 1943) is a Canadian-American economist and Nobel laureate.<ref>{{Cite web|url=https://www.nobelprize.org/prizes/economic-sciences/2001/spence/auto-biography/|title=The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2001|website=NobelPrize.org|language=en-US|access-date=2018-11-07}}</ref>

Spence is the William R. Berkley Professor in Economics and Business at the [[New York University Stern School of Business|Stern School of Business]] at [[New York University]], and the Philip H. Knight Professor of Management, Emeritus, and Dean, Emeritus, at the [[Stanford Graduate School of Business]].<ref>{{Cite web|title=NYU Stern – A. Spence – William R. Berkley Professor in Economics & Business|url=https://www.stern.nyu.edu/faculty/bio/a-michael-spence|website=www.stern.nyu.edu|language=en|access-date=2020-05-12}}</ref><ref>{{Cite web|title=A. Michael Spence|url=https://www.gsb.stanford.edu/faculty-research/faculty/michael-spence|website=Stanford Graduate School of Business|language=en|access-date=2020-05-12}}</ref>

Together with [[George Akerlof|George A. Akerlof]] and [[Joseph E. Stiglitz]], Spence is a co-recipient of the 2001 [[Nobel Memorial Prize in Economic Sciences]], "for their analyses of markets with asymmetric information."

==Career==
Spence is noted for his job-market [[Signaling (economics)|signaling]] model, which inspired research into this branch of [[contract theory]]. In this model, employees signal their respective skills to employers by acquiring a certain degree of education, which is costly to them. Employers will pay higher wages to more educated employees, because they know that the proportion of employees with high abilities is higher among the educated ones, as it is less costly for them to acquire education than it is for employees with low abilities. For the model to work, it is not even necessary for education to have any intrinsic value if it can convey information about the sender (employee) to the recipient (employer) and if the signal is costly.

Spence received his middle and high school education at the [[University of Toronto Schools]] of the [[University of Toronto]]. He later came back to [[Rotman School of Management]] at the [[University of Toronto]] to serve as a member of the Rotman Dean's Advisory Board.<ref>{{Cite web|date=2021-03-07|title=Rotman School of Management|url=http://www-2.rotman.utoronto.ca/rogermartin/board.htm|access-date=2021-03-07|archive-url=https://web.archive.org/web/20210307175930/http://webcache.googleusercontent.com/search?q=cache%3AYTbriIXb0WsJ%3Awww-2.rotman.utoronto.ca%2Frogermartin%2Fboard.htm+&cd=1&hl=en&ct=clnk&gl=ca|archive-date=2021-03-07|url-status=live}}</ref>

Spence attended [[Princeton University]] as an undergraduate student and graduated summa cum laude with a B.A. in philosophy in 1966, completing a senior thesis titled "Freedom and Determinism".<ref>{{Citation |last=Spence|first=Andrew Michael|date=1966|title=Freedom and Determinism|url=http://dataspace.princeton.edu/jspui/handle/88435/dsp01w0892b98d}}</ref> Spence then studied at [[Magdalen College, Oxford|Magdalen College]], [[University of Oxford]] as a [[Rhodes Scholarship|Rhodes Scholar]], and received a B.A./M.A. in mathematics in 1968.<ref>{{Cite web|title=Professor A. Michael Spence {{!}} Magdalen College Oxford|url=https://www.magd.ox.ac.uk/discover-magdalen/history-of-college/famous-alumni/professor-a-michael-spence/|website=www.magd.ox.ac.uk|access-date=2020-05-12}}</ref> Spence then began graduate studies in economics at Harvard University with the support of a Danforth Graduate Fellowship in the fall of 1968. He received a Ph.D. in economics in 1972, completing a dissertation titled "Market signalling" under the supervision of [[Kenneth Arrow]] and [[Thomas Schelling|Thomas C. Schelling]].<ref>{{Cite web|url=https://hollis.harvard.edu/primo-explore/fulldisplay?context=L&vid=HVD2&search_scope=everything&tab=everything&lang=en_US&docid=01HVD_ALMA211904693260003941|website=hollis.harvard.edu|access-date=2020-05-12|title=Market signalling – Harvard University}}</ref> Spence was awarded the David A. Wells Prize for outstanding doctoral dissertation in 1972.

He stepped down as Dean of the Stanford Graduate School of Business in 1999 and joined [[Oak Hill Capital Partners]].<ref>{{Cite web |title=A. Michael Spence Biographical, The Nobel Prize |url=https://www.nobelprize.org/prizes/economic-sciences/2001/spence/biographical/ |access-date=Jan 7, 2023 |website=Nobelprize.org}}</ref> He is the Chairman of the [[Growth Commission|Commission on Growth and Development]], and a distinguished visiting fellow at the [[Council on Foreign Relations]].<ref>{{Cite web|title=A. Michael Spence|url=https://www.cfr.org/expert/michael-spence|website=Council on Foreign Relations|language=en|access-date=2020-05-12}}</ref>

Spence joined the faculty of [[New York University]]'s [[New York University Stern School of Business|Stern School of Business]] on September 1, 2010.<ref>{{Cite web|url=http://www.stern.nyu.edu/experience-stern/news-events/uat_024046|title=NYU Stern {{!}} News {{!}} A. Michael Spence, Nobel Economist, to Join NYU Stern|date=February 22, 2010|website=www.stern.nyu.edu|access-date=June 14, 2016}}</ref> He joined the faculty of [[SDA Bocconi School of Management]] in Italy in July 2011.<ref>{{Cite news|url=http://www.businessbecause.com/news/mba-faculty/919/nobel-economist-michael-spence-joins-sda-bocconi-faculty|title=Nobel Economist Michael Spence Joins SDA Bocconi Faculty|date=July 25, 2011|website=BusinessBecause|access-date=June 18, 2016}}</ref>

He is a senior fellow at [[Stanford University]]'s [[Hoover Institution]] and the Philip H. Knight Professor Emeritus of Management in the Graduate School of Business. Spence is also a Commissioner for the Global Commission on Internet Governance.<ref>{{Cite web|title=Nobel laureate A. Michael Spence named Hoover Senior Fellow|url=https://www.hoover.org/press-releases/nobel-laureate-michael-spence-named-hoover-senior-fellow|website=Hoover Institution|language=en|access-date=2020-05-12}}</ref><ref>{{Cite web|url=https://www.ourinternet.org/#commission|title=OurInternet|website=www.ourinternet.org|date=20 January 2014|access-date=June 14, 2016|archive-date=26 July 2017|archive-url=https://web.archive.org/web/20170726193157/https://www.ourinternet.org/#commission|url-status=dead}}</ref> Additionally, Spence is also a member of the [[Berggruen Institute]]'s 21st Century Council.<ref>{{cite web|title=Berggruen Institute|url=http://governance.berggruen.org/councils/21st-century-council/members|access-date=2017-01-07|archive-url=https://web.archive.org/web/20180613084722/http://governance.berggruen.org/councils/21st-century-council/members|archive-date=2018-06-13|url-status=dead}}</ref><ref>Forbes, Miguel. [https://www.forbes.com/sites/miguelforbes/2017/01/03/charles-taylor-wins-1m-first-inaugural-berggruen-nobel-prize/#64a123236c8d "Charles Taylor Wins $1M First Inaugural Berggruen Nobel Prize"], ''[[Forbes]]'', January 3, 2017.</ref>

He is the author of three books and 50 articles, and has also been a consistent contributor to ''[[Project Syndicate]]'', an international newspaper syndicate, since 2008. Among his beliefs are that [[high-frequency trading]] should be banned.<ref name="freak">{{cite news|url=http://freakonomics.com/2011/03/28/should-high-frequency-trading-be-banned-one-nobel-winner-thinks-so/|title=Should High-Frequency Trading Be Banned? One Nobel Winner Thinks So|date=March 28, 2011|work=Freakanomics blog|last1=Philips|first1=Matthew}}</ref>

Spence had both [[Bill Gates]] and [[Steve Ballmer]] in a graduate-level economics class at Harvard. In a 1999 ''Fortune'' interview, however, Gates and Ballmer admitted not attending class and passing only after cramming for four days before the final.<ref>{{Cite web|url=https://money.cnn.com/magazines/fortune/fortune_archive/1999/10/25/267787/index.htm|title=The $100 Billion Friendship In a frank chat with ''Fortune''{{'}}s Brent Schlender, Bill Gates and Steve Ballmer talk about their partnership and how it will shape Microsoft in the 21st century.|date=October 25, 1999|website=archive.fortune.com|access-date=June 14, 2016}}</ref>

==Honors and awards==
Spence is an Honorary Fellow of [[Magdalen College, Oxford]], where he studied as a [[Rhodes Scholar]].<ref>{{Cite web|url=http://www.magd.ox.ac.uk/people-at-magdalen/|title=People at Magdalen – Magdalen College Oxford (Search by last name)|website=www.magd.ox.ac.uk|access-date=June 14, 2016}}</ref> He was the recipient of the Nobel Memorial Prize in Economic Sciences in 2001, as well as the [[John Bates Clark Medal]] from the American Economics Association in 1981.<ref>{{Cite web|url=https://www.stern.nyu.edu/faculty/bio/a-michael-spence/|title=A. Michael Spence – Biography|website=stern.nyu.edu|access-date=April 7, 2019}}</ref>

Spence was elected as a Fellow of the [[Econometric Society]] in 1976 and a member of the [[American Academy of Arts and Sciences]] in 1983.<ref>{{Cite web|title=Fellows of the Econometric Society 1950 to 2019 {{!}} The Econometric Society|url=https://www.econometricsociety.org/society/organization-and-governance/fellows|website=www.econometricsociety.org|access-date=2020-05-12}}</ref><ref>{{Cite web|title=Andrew Michael Spence|url=https://www.amacad.org/person/andrew-michael-spence|website=American Academy of Arts & Sciences|language=en|access-date=2020-05-12}}</ref>

==Selected works==
* {{cite journal |year=1973 |title=Job Market Signaling |journal=[[Quarterly Journal of Economics]] |volume=87 |issue=3 |pages=355–374  |jstor=1882010|doi=10.2307/1882010 |last1= Spence|first1= Michael}}
* {{cite book |title=Market Signaling: Informational Transfer in Hiring and Related Screening Processes |year=1974 |publisher=[[Harvard University Press]] |location=Cambridge, MA |isbn=978-0674549906 |url=https://archive.org/details/marketsignalingi0000spen|url-access=registration }}
* {{cite book |title=The Next Convergence: The Future of Economic Growth in a Multispeed World |date=May 2011 |publisher=Farrar, Straus and Giroux |location=New York |isbn= 978-1429968713 |url= https://archive.org/details/nextconvergencef0000spen|url-access=registration }}

==Personal life==
Spence currently lives in [[Milan]], [[Italy]] with his wife and children.{{citation needed|date=June 2016}}

==See also==
* [[List of economists]]

==References==
{{Reflist}}

==External links==
* [http://www.hoover.org/bios/spence.html Michael Spence] {{Webarchive|url=https://web.archive.org/web/20090504074240/http://www.hoover.org/bios/spence.html |date=2009-05-04 }} Senior Fellow at [[Hoover Institution]], [[Stanford University]]
* {{Nobelprize}} including the Prize Lecture December 8, 2001 ''Signaling in Retrospect and the Informational Structure of Markets''
* {{Cite encyclopedia |title=Michael Spence (1943–&nbsp;) |url=http://www.econlib.org/library/Enc/bios/Spence.html |encyclopedia=[[The Concise Encyclopedia of Economics]] |edition=2nd |series=[[Library of Economics and Liberty]] |publisher=[[Liberty Fund]] |year=2008 |isbn=978-0865976665 |editor-first=David R.|editor-last=Henderson |editor-link=David R. Henderson |page=594 }}
* [https://ideas.repec.org/e/psp7.html Profile] and [http://econpapers.repec.org/RAS/psp7.htm Papers] at [[Research Papers in Economics]]/RePEc
* [http://www.project-syndicate.org/columnist/michael-spence Archive of Michael Spence articles] on ''[[Project Syndicate]]''
* {{C-SPAN|45109}}

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{{s-bef | before = [[James J. Heckman]] | before2 = [[Daniel L. McFadden]] }}
{{s-ttl | title = [[List of Nobel Memorial Prize laureates in Economics|Laureate of the Nobel Memorial Prize in Economics]] | years = 2001 | alongside = [[George A. Akerlof]], [[Joseph E. Stiglitz]] }}
{{s-aft | after = [[Daniel Kahneman]] | after2 = [[Vernon L. Smith]] }}
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{{John Bates Clark Medal recipients}}
{{Nobel laureates in economics 2001-2025}}
{{2001 Nobel Prize winners}}

{{Authority control}}

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[[Category:Harvard University faculty]]
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[[Category:Nobel laureates in Economics]]
[[Category:Canadian Rhodes Scholars]]
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[[Category:American Rhodes Scholars]]
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[[Category:Institute for New Economic Thinking]]
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[[Category:20th-century Canadian scientists]]
[[Category:21st-century Canadian economists]]
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[[Category:21st-century American scientists]]
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[[Category:21st-century American economists]]