Leonid Hurwicz
Encyclopedia
Leonid "Leo" Hurwicz was a Russian-born American economist
and mathematician
. His nationality of origin was Polish
. He was Jewish. He originated incentive compatibility
and mechanism design
, which show how desired outcomes are achieved in economics
, social science and political science
. Interactions of individuals and institutions, market
s and trade
are analyzed and understood today using the models Hurwicz developed. To date, Leonid Hurwicz is the oldest Nobel Laureate, having received the prize at the age of 90.
Hurwicz was Regents' Professor of Economics (Emeritus
) at the University of Minnesota
. He was among the first economists to recognize the value of game theory
and was a pioneer in its application. Hurwicz shared the 2007 Nobel Memorial Prize in Economic Sciences
with Eric Maskin
and Roger Myerson
for their work on mechanism design.
, Russia
, to a Jewish family a few months before the October Revolution
. The family had originated in Poland and had lived in Congress Poland
(the part of Poland
then within the Russian Empire
) but had been displaced by World War I
. Soon after Leonid's birth, the family returned to Warsaw
, Poland
. Hurwicz and his family experienced persecution by both the Bolshevik
s and Nazi
s, as he again became a refugee when Hitler invaded Poland in 1939. His parents and brother fled Warsaw, only to be arrested and sent to Soviet labor camp
s. Hurwicz, who had graduated from Warsaw University in 1938, at the time of Nazi invasion on Poland
was in London, moved to Switzerland
then to Portugal
and finally in 1940 he emigrated to the United States
. His family eventually joined him there.
Hurwicz hired Evelyn Jensen (born October 31, 1923), who grew up on a Wisconsin
farm and was, at the time, an undergraduate in economics at the University of Chicago
, as his teaching assistant during the 1940s. They married in 1944 and later lived on the Mississippi River
parkway in Minneapolis, Minnesota
. They had four children: Sarah, Michael, Ruth and Maxim.
His interests included linguistics, archaeology, biochemistry and music. His activities outside the field of economics included research in meteorology and membership in the NSF
Commission on Weather Modification. When Eugene McCarthy
ran for president of the United States, Hurwicz served in 1968 as a McCarthy delegate from Minnesota to the Democratic Party
Convention and a member of the Democratic Party Platform Committee. He helped design the 'walking subcaucus
' method of allocating delegates among competing groups, which is still used today by political parties. He remained an active Democrat; even attending Precinct Caucus
in February 2008, at age 90.
He was hospitalized in mid-June 2008, suffering from renal failure. He died a week later in Minneapolis.
degree from the University of Warsaw
, where he discovered his future vocation in economics class. He then studied at the London School of Economics
with Nicholas Kaldor
and Friedrich Hayek
. In 1939 he moved to Geneva
where he studied at the Graduate Institute of International Studies
and attended the seminar of Ludwig von Mises
. After moving to the United States he continued his studies at Harvard University
and the University of Chicago
. Hurwicz had no degree in economics. In 2007 he said, "Whatever economics I learned I learned by listening and learning."
In 1941 Hurwicz was a research assistant to Paul Samuelson
at the Massachusetts Institute of Technology
and to Oskar Lange
at the University of Chicago. At Illinois Institute of Technology
during the war, Hurwicz taught electronics to the U.S. Army Signal Corps. From 1942 to 1944, at the University of Chicago
, he was a member of the faculty of the Institute of Meteorology and taught statistics in the Department of Economics. About 1942 his advisors were Jacob Marschak
and Tjalling Koopmans
at the Cowles Commission for Research in Economics at the University of Chicago, now the Cowles Foundation
at Yale University
.
Hurwicz received a Guggenheim Fellowship
in 1945–1946. In 1946 he became an associate professor of economics at Iowa State College. From January 1942 until June 1946, he was a research associate for the Cowles Commission. Joining full time in October 1950 until January 1951, he was a visiting professor, assuming Koopman's classes in the Department of Economics, and led the commission's research on theory of resource allocation. He was also a research professor of economics and mathematical statistics at the University of Illinois, a consultant to the RAND
Corporation through the University of Chicago and a consultant to the U.S. Bureau of the Budget. Hurwicz continued to be a consultant to the Cowles Commission until about 1961.
Hurwicz was recruited by Walter Heller
to the University of Minnesota in 1951, where he became a professor of economics and mathematics in the School of Business Administration. He spent most of the rest of his career there, but it was interspersed with studies and teaching elsewhere in the United States and Asia. In 1955 and again in 1958 Hurwicz was a visiting professor, and a fellow on the second visit, at Stanford University
and there in 1959 published "Optimality and Informational Efficiency in Resource Allocation Processes" on mechanism design. He taught at Bangalore University
in 1965 and, during the 1980s, at Tokyo University
, People's University (now Renmin University of China
) and the University of Indonesia
. In the United States he was a visiting professor at Harvard in 1969, at the University of California, Berkeley
in 1976, at Northwestern University
twice in 1988 and 1989, at the University of California, Santa Barbara
in 1998, the California Institute of Technology
in 1999 and the University of Michigan
in 2002. He was a visiting Distinguished Professor at the University of Illinois in 2001.
Back at Minnesota, Hurwicz became chairman of the Statistics Department in 1961, Regents Professor of Economics in 1969, and Curtis L. Carlson Regents Professor of Economics in 1989. He taught subjects ranging from theory to welfare economics, public economics, mechanisms and institutions and mathematical economics. Although he retired from full time teaching in 1988, Hurwicz taught graduate school as professor emeritus most recently in the fall of 2006. In 2007 his ongoing research was described by the University of Minnesota as "comparison and analysis of systems and techniques of economic organization, welfare economics, game-theoretic implementation of social choice goals, and modeling economic institutions."
Hurwicz's interests included mathematical economics and modeling and the theory of the firm
. His published works in these fields date back to 1944. He is internationally renowned for his pioneering research on economic theory, particularly in the areas of mechanism and institutional design and mathematical economics. In the 1950s, he worked with Kenneth Arrow
on non-linear programming; in 1972 Arrow became the youngest person to receive the Nobel Economics prize. Hurwicz was the graduate advisor to Daniel McFadden
, who received the prize in 2000.
Earlier economists often avoided analytic modeling of economic institutions. Hurwicz's work was instrumental in showing how economic models can provide a framework for the analysis of systems, such as capitalism and socialism, and how the incentives in such systems affect members of society. The theory of incentive compatibility
that Hurwicz developed changed the way many economists thought about outcomes, explaining why centrally planned economies may fail and how incentives for individuals make a difference in decision making.
Hurwicz served on the editorial board of several journals. He co-edited and contributed to two collections for Cambridge University Press
: Studies in Resource Allocation Processes (1978, with Kenneth Arrow
) and Social Goals and Social Organization (1987, with David Schmeidler and Hugo Sonnenschein). His most recent articles were published in the journals "Economic Theory" (2003, with Thomas Marschak), "Review of Economic Design
" (2001, with Stanley Reiter) and "Advances in Mathematical Economics" (2003, with Marcel K. Richter). Hurwicz presented the Fisher-Schultz (1963), Richard T. Ely (1972), David Kinley (1989) and Colin Clark (1997) lectures.
in 1947 and in 1969 was the society's president. Hurwicz was elected a Fellow of the American Academy of Arts and Sciences
in 1965. In 1974 he was inducted into the National Academy of Sciences
and in 1977 was named a Distinguished Fellow of the American Economic Association
. Hurwicz received the National Medal of Science
in 1990 in Behavioral and Social Science, presented to him by President of the United States George H. W. Bush
, "for his pioneering work on the theory of modern decentralized allocation mechanisms".
He served on the United Nations
Economic Commission in 1948 and the United States National Research Council
in 1954. In 1964 he was a member of the National Science Foundation
Commission on Weather Modification. He was a member of the American Academy of Independent Scholars (1979) and a Distinguished Scholar of the California Institute of Technology
(1984).
Hurwicz received six honorary doctorates, from Northwestern University
(1980), the University of Chicago (1993), Universitat Autònoma de Barcelona
(1989), Keio University
(1993), Warsaw School of Economics
(1994) and Universität Bielefeld
(2004). He was an honorary visiting professor of the Huazhong University of Science and Technology
School of Economics (1984).
published decision function
s that year. Hurwicz combined Wald's ideas with work done in 1812 by Pierre-Simon Laplace
. Hurwicz's criterion gives each decision a value which is "a weighted sum of its worst and best possible outcomes" represented as α and known as an index of pessimism or optimism. Variations have been proposed ever since and some corrections came very soon from Leonard Jimmie Savage
in 1954. These four approaches– Laplace, Wald, Hurwicz and Savage– have been studied, corrected and applied for over fifty years by many different people including John Milnor, G. L. S. Shackle
, Daniel Ellsberg
, R. Duncan Luce
and Howard Raiffa
, in a field some date back to Jacob Bernoulli.
The University of Minnesota
, the College of Liberal Arts launched the Heller Hurwicz Institute, a new global initiative in the College of Liberal Arts at the University of Minnesota
created to inform public policy by supporting and promoting frontier economic research and by communicating our findings to leading academics, policymakers, and business executives around the world. The Institute will be housed in our department. Funds raised by the Institute will be used to attract and retain preeminent faculty and, in part, to support graduate student research.
The Leonid Hurwicz Distinguished Lecture is given to the Minnesota Economic Association (as is the Heller lecture). John Ledyard (2007), Robert Lucas
, Roger Myerson
, Edward C. Prescott
, James Quirk, Nancy Stokey
and Neil Wallace
are among those who have delivered the lecture since it was inaugurated in 1992.
with Eric Maskin
of the Institute for Advanced Study
and Roger Myerson
of the University of Chicago
"for having laid the foundations of mechanism design theory
." During a telephone interview, a representative of the Nobel Foundation told Hurwicz and his wife that Hurwicz was the oldest person to win the Nobel Prize. Hurwicz said, "I hope that others who deserve it also got it." When asked which of all the applications of mechanism design he was most pleased to see he said welfare economics
. The winners applied game theory, a field advanced by mathematician John Forbes Nash
, to discover the best and most efficient means to reach a desired outcome, taking into account individuals' knowledge and self-interest, which may be hidden or private. Mechanism design has been used to model negotiations and taxation, voting and elections, to design auctions such as those for communications bandwidth, elections and labor talks and for pricing stock options.
Unable to attend the Nobel Prize ceremony in Stockholm because of his age, Hurwicz received the prize in Minneapolis. Accompanied by Evelyn, his spouse of six decades, and his family, he was the guest of honor at a convocation held on the campus of the University of Minnesota presided over by university president Robert Bruininks
. Immediately following a live broadcast of the Nobel Prize awards ceremony, Jonas Hafstrom, Swedish ambassador to the United States, personally awarded the Economics Prize to Professor Hurwicz.
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
and mathematician
Mathematician
A mathematician is a person whose primary area of study is the field of mathematics. Mathematicians are concerned with quantity, structure, space, and change....
. His nationality of origin was Polish
Poles
thumb|right|180px|The state flag of [[Poland]] as used by Polish government and diplomatic authoritiesThe Polish people, or Poles , are a nation indigenous to Poland. They are united by the Polish language, which belongs to the historical Lechitic subgroup of West Slavic languages of Central Europe...
. He was Jewish. He originated incentive compatibility
Incentive compatibility
In mechanism design, a process is said to be incentive-compatible if all of the participants fare best when they truthfully reveal any private information asked for by the mechanism. As an illustration, voting systems which create incentives to vote dishonestly lack the property of incentive...
and mechanism design
Mechanism design
Mechanism design is a field in game theory studying solution concepts for a class of private information games...
, which show how desired outcomes are achieved in economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, social science and political science
Political science
Political Science is a social science discipline concerned with the study of the state, government and politics. Aristotle defined it as the study of the state. It deals extensively with the theory and practice of politics, and the analysis of political systems and political behavior...
. Interactions of individuals and institutions, market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
s and trade
Trade
Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...
are analyzed and understood today using the models Hurwicz developed. To date, Leonid Hurwicz is the oldest Nobel Laureate, having received the prize at the age of 90.
Hurwicz was Regents' Professor of Economics (Emeritus
Emeritus
Emeritus is a post-positive adjective that is used to designate a retired professor, bishop, or other professional or as a title. The female equivalent emerita is also sometimes used.-History:...
) at the University of Minnesota
University of Minnesota
The University of Minnesota, Twin Cities is a public research university located in Minneapolis and St. Paul, Minnesota, United States. It is the oldest and largest part of the University of Minnesota system and has the fourth-largest main campus student body in the United States, with 52,557...
. He was among the first economists to recognize the value of game theory
Game theory
Game theory is a mathematical method for analyzing calculated circumstances, such as in games, where a person’s success is based upon the choices of others...
and was a pioneer in its application. Hurwicz shared the 2007 Nobel Memorial Prize in Economic Sciences
Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics, but officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel , is an award for outstanding contributions to the field of economics, generally regarded as one of the...
with Eric Maskin
Eric Maskin
Eric Stark Maskin is an American economist and Nobel laureate recognized with Leonid Hurwicz and Roger Myerson "for having laid the foundations of mechanism design theory." He is the Albert O...
and Roger Myerson
Roger Myerson
Roger Bruce Myerson is an American economist and Nobel laureate recognized with Leonid Hurwicz and Eric Maskin for "having laid the foundations of mechanism design theory." A professor at the University of Chicago, he has made contributions as an economist, as an applied mathematician, and as a...
for their work on mechanism design.
Personal life
Hurwicz was born in MoscowMoscow
Moscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...
, Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, to a Jewish family a few months before the October Revolution
October Revolution
The October Revolution , also known as the Great October Socialist Revolution , Red October, the October Uprising or the Bolshevik Revolution, was a political revolution and a part of the Russian Revolution of 1917...
. The family had originated in Poland and had lived in Congress Poland
Congress Poland
The Kingdom of Poland , informally known as Congress Poland , created in 1815 by the Congress of Vienna, was a personal union of the Russian parcel of Poland with the Russian Empire...
(the part of Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
then within the Russian Empire
Russian Empire
The Russian Empire was a state that existed from 1721 until the Russian Revolution of 1917. It was the successor to the Tsardom of Russia and the predecessor of the Soviet Union...
) but had been displaced by World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
. Soon after Leonid's birth, the family returned to Warsaw
Warsaw
Warsaw is the capital and largest city of Poland. It is located on the Vistula River, roughly from the Baltic Sea and from the Carpathian Mountains. Its population in 2010 was estimated at 1,716,855 residents with a greater metropolitan area of 2,631,902 residents, making Warsaw the 10th most...
, Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
. Hurwicz and his family experienced persecution by both the Bolshevik
Bolshevik
The Bolsheviks, originally also Bolshevists , derived from bol'shinstvo, "majority") were a faction of the Marxist Russian Social Democratic Labour Party which split apart from the Menshevik faction at the Second Party Congress in 1903....
s and Nazi
Nazism
Nazism, the common short form name of National Socialism was the ideology and practice of the Nazi Party and of Nazi Germany...
s, as he again became a refugee when Hitler invaded Poland in 1939. His parents and brother fled Warsaw, only to be arrested and sent to Soviet labor camp
Labor camp
A labor camp is a simplified detention facility where inmates are forced to engage in penal labor. Labor camps have many common aspects with slavery and with prisons...
s. Hurwicz, who had graduated from Warsaw University in 1938, at the time of Nazi invasion on Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
was in London, moved to Switzerland
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
then to Portugal
Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...
and finally in 1940 he emigrated to the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. His family eventually joined him there.
Hurwicz hired Evelyn Jensen (born October 31, 1923), who grew up on a Wisconsin
Wisconsin
Wisconsin is a U.S. state located in the north-central United States and is part of the Midwest. It is bordered by Minnesota to the west, Iowa to the southwest, Illinois to the south, Lake Michigan to the east, Michigan to the northeast, and Lake Superior to the north. Wisconsin's capital is...
farm and was, at the time, an undergraduate in economics at the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
, as his teaching assistant during the 1940s. They married in 1944 and later lived on the Mississippi River
Mississippi River
The Mississippi River is the largest river system in North America. Flowing entirely in the United States, this river rises in western Minnesota and meanders slowly southwards for to the Mississippi River Delta at the Gulf of Mexico. With its many tributaries, the Mississippi's watershed drains...
parkway in Minneapolis, Minnesota
Minneapolis, Minnesota
Minneapolis , nicknamed "City of Lakes" and the "Mill City," is the county seat of Hennepin County, the largest city in the U.S. state of Minnesota, and the 48th largest in the United States...
. They had four children: Sarah, Michael, Ruth and Maxim.
His interests included linguistics, archaeology, biochemistry and music. His activities outside the field of economics included research in meteorology and membership in the NSF
National Science Foundation
The National Science Foundation is a United States government agency that supports fundamental research and education in all the non-medical fields of science and engineering. Its medical counterpart is the National Institutes of Health...
Commission on Weather Modification. When Eugene McCarthy
Eugene McCarthy
Eugene Joseph "Gene" McCarthy was an American politician, poet, and a long-time member of the United States Congress from Minnesota. He served in the U.S. House of Representatives from 1949 to 1959 and the U.S. Senate from 1959 to 1971.In the 1968 presidential election, McCarthy was the first...
ran for president of the United States, Hurwicz served in 1968 as a McCarthy delegate from Minnesota to the Democratic Party
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
Convention and a member of the Democratic Party Platform Committee. He helped design the 'walking subcaucus
Walking subcaucus
The walking subcaucus system is a method of proportional voting used in political party meetings to choose delegates to higher meetings. It is designed to ensure that people in the minority are able to elect delegates representing their views to the higher body, as opposed to plurality at-large...
' method of allocating delegates among competing groups, which is still used today by political parties. He remained an active Democrat; even attending Precinct Caucus
Minnesota Democratic caucuses, 2008
The Minnesota Democratic Caucus took place on Super Tuesday, February 5, 2008 with 78 delegates at stake. The winner in each of Minnesota's eight congressional districts was awarded all of that district's delegates, totaling 47. Another 25 delegates were awarded to the statewide winner, Barack Obama...
in February 2008, at age 90.
He was hospitalized in mid-June 2008, suffering from renal failure. He died a week later in Minneapolis.
Education and early academic career
Encouraged by his father to study law, in 1938 Hurwicz received his LL.M.Master of Laws
The Master of Laws is an advanced academic degree, pursued by those holding a professional law degree, and is commonly abbreviated LL.M. from its Latin name, Legum Magister. The University of Oxford names its taught masters of laws B.C.L...
degree from the University of Warsaw
University of Warsaw
The University of Warsaw is the largest university in Poland and one of the most prestigious, ranked as best Polish university in 2010 and 2011...
, where he discovered his future vocation in economics class. He then studied at the London School of Economics
London School of Economics
The London School of Economics and Political Science is a public research university specialised in the social sciences located in London, United Kingdom, and a constituent college of the federal University of London...
with Nicholas Kaldor
Nicholas Kaldor
Nicholas Kaldor, Baron Kaldor was one of the foremost Cambridge economists in the post-war period...
and Friedrich Hayek
Friedrich Hayek
Friedrich August Hayek CH , born in Austria-Hungary as Friedrich August von Hayek, was an economist and philosopher best known for his defense of classical liberalism and free-market capitalism against socialist and collectivist thought...
. In 1939 he moved to Geneva
Geneva
Geneva In the national languages of Switzerland the city is known as Genf , Ginevra and Genevra is the second-most-populous city in Switzerland and is the most populous city of Romandie, the French-speaking part of Switzerland...
where he studied at the Graduate Institute of International Studies
Graduate Institute of International Studies
The Graduate Institute of International Studies, best known as HEI , was founded in 1927 as one of the first institutions in the world dedicated to the study of international relations...
and attended the seminar of Ludwig von Mises
Ludwig von Mises
Ludwig Heinrich Edler von Mises was an Austrian economist, philosopher, and classical liberal who had a significant influence on the modern Libertarian movement and the "Austrian School" of economic thought.-Biography:-Early life:...
. After moving to the United States he continued his studies at Harvard University
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
and the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
. Hurwicz had no degree in economics. In 2007 he said, "Whatever economics I learned I learned by listening and learning."
In 1941 Hurwicz was a research assistant to Paul Samuelson
Paul Samuelson
Paul Anthony Samuelson was an American economist, and the first American to win the Nobel Memorial Prize in Economic Sciences. The Swedish Royal Academies stated, when awarding the prize, that he "has done more than any other contemporary economist to raise the level of scientific analysis in...
at the Massachusetts Institute of Technology
Massachusetts Institute of Technology
The Massachusetts Institute of Technology is a private research university located in Cambridge, Massachusetts. MIT has five schools and one college, containing a total of 32 academic departments, with a strong emphasis on scientific and technological education and research.Founded in 1861 in...
and to Oskar Lange
Oskar Lange
Oskar Ryszard Lange was a Polish economist and diplomat...
at the University of Chicago. At Illinois Institute of Technology
Illinois Institute of Technology
Illinois Institute of Technology, commonly called Illinois Tech or IIT, is a private Ph.D.-granting university located in Chicago, Illinois, with programs in engineering, science, psychology, architecture, business, communications, industrial technology, information technology, design, and law...
during the war, Hurwicz taught electronics to the U.S. Army Signal Corps. From 1942 to 1944, at the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
, he was a member of the faculty of the Institute of Meteorology and taught statistics in the Department of Economics. About 1942 his advisors were Jacob Marschak
Jacob Marschak
Jacob Marschak was an American economist of Ukrainian Jewish origin.- Life :...
and Tjalling Koopmans
Tjalling Koopmans
Tjalling Charles Koopmans was the joint winner, with Leonid Kantorovich, of the 1975 Nobel Memorial Prize in Economic Sciences....
at the Cowles Commission for Research in Economics at the University of Chicago, now the Cowles Foundation
Cowles Foundation
The Cowles Commission for Research in Economics is an economic research institute, founded in Colorado Springs in 1932 by Alfred Cowles, a businessman and economist. In 1939, the Cowles Commission moved to the University of Chicago under the directorship of Theodore O. Yntema. Jacob Marschak took...
at Yale University
Yale University
Yale University is a private, Ivy League university located in New Haven, Connecticut, United States. Founded in 1701 in the Colony of Connecticut, the university is the third-oldest institution of higher education in the United States...
.
Teaching and research
Guggenheim Fellowship
Guggenheim Fellowships are American grants that have been awarded annually since 1925 by the John Simon Guggenheim Memorial Foundation to those "who have demonstrated exceptional capacity for productive scholarship or exceptional creative ability in the arts." Each year, the foundation makes...
in 1945–1946. In 1946 he became an associate professor of economics at Iowa State College. From January 1942 until June 1946, he was a research associate for the Cowles Commission. Joining full time in October 1950 until January 1951, he was a visiting professor, assuming Koopman's classes in the Department of Economics, and led the commission's research on theory of resource allocation. He was also a research professor of economics and mathematical statistics at the University of Illinois, a consultant to the RAND
RAND
RAND Corporation is a nonprofit global policy think tank first formed to offer research and analysis to the United States armed forces by Douglas Aircraft Company. It is currently financed by the U.S. government and private endowment, corporations including the healthcare industry, universities...
Corporation through the University of Chicago and a consultant to the U.S. Bureau of the Budget. Hurwicz continued to be a consultant to the Cowles Commission until about 1961.
Hurwicz was recruited by Walter Heller
Walter Heller
Walter Wolfgang Heller was a leading American economist of the 1960s, and an influential advisor to President John F. Kennedy as chairman of the Council of Economic Advisors, 1961-64....
to the University of Minnesota in 1951, where he became a professor of economics and mathematics in the School of Business Administration. He spent most of the rest of his career there, but it was interspersed with studies and teaching elsewhere in the United States and Asia. In 1955 and again in 1958 Hurwicz was a visiting professor, and a fellow on the second visit, at Stanford University
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
and there in 1959 published "Optimality and Informational Efficiency in Resource Allocation Processes" on mechanism design. He taught at Bangalore University
Bangalore University
Bangalore University is a public university located in Bangalore, Karnataka State, India. The university is one of the oldest in India, dating back to 1886...
in 1965 and, during the 1980s, at Tokyo University
University of Tokyo
, abbreviated as , is a major research university located in Tokyo, Japan. The University has 10 faculties with a total of around 30,000 students, 2,100 of whom are foreign. Its five campuses are in Hongō, Komaba, Kashiwa, Shirokane and Nakano. It is considered to be the most prestigious university...
, People's University (now Renmin University of China
Renmin University of China
Renmin University of China; RUC, also known as People's University of China , colloquially Renda , is a major research university in Haidian District, Beijing, China. Its campus neighbors those of Peking University and Tsinghua University....
) and the University of Indonesia
University of Indonesia
The Universitas Indonesia, is a state, comprehensive world class university located in Depok, West Java and Salemba, Jakarta, Indonesia. Universitas Indonesia is the oldest tertiary-level educational institution in Indonesia...
. In the United States he was a visiting professor at Harvard in 1969, at the University of California, Berkeley
University of California, Berkeley
The University of California, Berkeley , is a teaching and research university established in 1868 and located in Berkeley, California, USA...
in 1976, at Northwestern University
Northwestern University
Northwestern University is a private research university in Evanston and Chicago, Illinois, USA. Northwestern has eleven undergraduate, graduate, and professional schools offering 124 undergraduate degrees and 145 graduate and professional degrees....
twice in 1988 and 1989, at the University of California, Santa Barbara
University of California, Santa Barbara
The University of California, Santa Barbara, commonly known as UCSB or UC Santa Barbara, is a public research university and one of the 10 general campuses of the University of California system. The main campus is located on a site in Goleta, California, from Santa Barbara and northwest of Los...
in 1998, the California Institute of Technology
California Institute of Technology
The California Institute of Technology is a private research university located in Pasadena, California, United States. Caltech has six academic divisions with strong emphases on science and engineering...
in 1999 and the University of Michigan
University of Michigan
The University of Michigan is a public research university located in Ann Arbor, Michigan in the United States. It is the state's oldest university and the flagship campus of the University of Michigan...
in 2002. He was a visiting Distinguished Professor at the University of Illinois in 2001.
Hurwicz's interests included mathematical economics and modeling and the theory of the firm
Theory of the firm
The theory of the firm consists of a number of economic theories that describe the nature of the firm, company, or corporation, including its existence, behavior, structure, and relationship to the market.-Overview:...
. His published works in these fields date back to 1944. He is internationally renowned for his pioneering research on economic theory, particularly in the areas of mechanism and institutional design and mathematical economics. In the 1950s, he worked with Kenneth Arrow
Kenneth Arrow
Kenneth Joseph Arrow is an American economist and joint winner of the Nobel Memorial Prize in Economics with John Hicks in 1972. To date, he is the youngest person to have received this award, at 51....
on non-linear programming; in 1972 Arrow became the youngest person to receive the Nobel Economics prize. Hurwicz was the graduate advisor to Daniel McFadden
Daniel McFadden
Daniel Little McFadden is an econometrician who shared the 2000 Nobel Memorial Prize in Economic Sciences with James Heckman ; McFadden's share of the prize was "for his development of theory and methods for analyzing discrete choice". He was the E. Morris Cox Professor of Economics at the...
, who received the prize in 2000.
Earlier economists often avoided analytic modeling of economic institutions. Hurwicz's work was instrumental in showing how economic models can provide a framework for the analysis of systems, such as capitalism and socialism, and how the incentives in such systems affect members of society. The theory of incentive compatibility
Incentive compatibility
In mechanism design, a process is said to be incentive-compatible if all of the participants fare best when they truthfully reveal any private information asked for by the mechanism. As an illustration, voting systems which create incentives to vote dishonestly lack the property of incentive...
that Hurwicz developed changed the way many economists thought about outcomes, explaining why centrally planned economies may fail and how incentives for individuals make a difference in decision making.
Hurwicz served on the editorial board of several journals. He co-edited and contributed to two collections for Cambridge University Press
Cambridge University Press
Cambridge University Press is the publishing business of the University of Cambridge. Granted letters patent by Henry VIII in 1534, it is the world's oldest publishing house, and the second largest university press in the world...
: Studies in Resource Allocation Processes (1978, with Kenneth Arrow
Kenneth Arrow
Kenneth Joseph Arrow is an American economist and joint winner of the Nobel Memorial Prize in Economics with John Hicks in 1972. To date, he is the youngest person to have received this award, at 51....
) and Social Goals and Social Organization (1987, with David Schmeidler and Hugo Sonnenschein). His most recent articles were published in the journals "Economic Theory" (2003, with Thomas Marschak), "Review of Economic Design
Review of Economic Design
The Review of Economic Design is a peer-reviewed academic journal that covers research on economic design. The journal covers topics that range from the application of normative economics to the strategic analysis of game theory, as well as novel ideas on the use of legal-economic instruments such...
" (2001, with Stanley Reiter) and "Advances in Mathematical Economics" (2003, with Marcel K. Richter). Hurwicz presented the Fisher-Schultz (1963), Richard T. Ely (1972), David Kinley (1989) and Colin Clark (1997) lectures.
Memberships and honorary degrees
Hurwicz was elected a fellow of the Econometric SocietyEconometric Society
The Econometric Society is an international society for the advancement of economic theory in its relation with statistics and mathematics. It was founded on December 29, 1930 at the Stalton Hotel in Cleveland, Ohio....
in 1947 and in 1969 was the society's president. Hurwicz was elected a Fellow of the American Academy of Arts and Sciences
American Academy of Arts and Sciences
The American Academy of Arts and Sciences is an independent policy research center that conducts multidisciplinary studies of complex and emerging problems. The Academy’s elected members are leaders in the academic disciplines, the arts, business, and public affairs.James Bowdoin, John Adams, and...
in 1965. In 1974 he was inducted into the National Academy of Sciences
United States National Academy of Sciences
The National Academy of Sciences is a corporation in the United States whose members serve pro bono as "advisers to the nation on science, engineering, and medicine." As a national academy, new members of the organization are elected annually by current members, based on their distinguished and...
and in 1977 was named a Distinguished Fellow of the American Economic Association
American Economic Association
The American Economic Association, or AEA, is a learned society in the field of economics, headquartered in Nashville, Tennessee. It publishes one of the most prestigious academic journals in economics: the American Economic Review...
. Hurwicz received the National Medal of Science
National Medal of Science
The National Medal of Science is an honor bestowed by the President of the United States to individuals in science and engineering who have made important contributions to the advancement of knowledge in the fields of behavioral and social sciences, biology, chemistry, engineering, mathematics and...
in 1990 in Behavioral and Social Science, presented to him by President of the United States George H. W. Bush
George H. W. Bush
George Herbert Walker Bush is an American politician who served as the 41st President of the United States . He had previously served as the 43rd Vice President of the United States , a congressman, an ambassador, and Director of Central Intelligence.Bush was born in Milton, Massachusetts, to...
, "for his pioneering work on the theory of modern decentralized allocation mechanisms".
He served on the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
Economic Commission in 1948 and the United States National Research Council
United States National Research Council
The National Research Council of the USA is the working arm of the United States National Academies, carrying out most of the studies done in their names.The National Academies include:* National Academy of Sciences...
in 1954. In 1964 he was a member of the National Science Foundation
National Science Foundation
The National Science Foundation is a United States government agency that supports fundamental research and education in all the non-medical fields of science and engineering. Its medical counterpart is the National Institutes of Health...
Commission on Weather Modification. He was a member of the American Academy of Independent Scholars (1979) and a Distinguished Scholar of the California Institute of Technology
California Institute of Technology
The California Institute of Technology is a private research university located in Pasadena, California, United States. Caltech has six academic divisions with strong emphases on science and engineering...
(1984).
Hurwicz received six honorary doctorates, from Northwestern University
Northwestern University
Northwestern University is a private research university in Evanston and Chicago, Illinois, USA. Northwestern has eleven undergraduate, graduate, and professional schools offering 124 undergraduate degrees and 145 graduate and professional degrees....
(1980), the University of Chicago (1993), Universitat Autònoma de Barcelona
Autonomous University of Barcelona
The Autonomous University of Barcelona is a public university mostly located in Cerdanyola, near the city of Barcelona in Catalonia, Spain....
(1989), Keio University
Keio University
,abbreviated as Keio or Keidai , is a Japanese university located in Minato, Tokyo. It is known as the oldest institute of higher education in Japan. Founder Fukuzawa Yukichi originally established it as a school for Western studies in 1858 in Edo . It has eleven campuses in Tokyo and Kanagawa...
(1993), Warsaw School of Economics
Warsaw School of Economics
Warsaw School of Economics is the oldest economic university in Poland.The Warsaw School of Economics was founded in 1906 as a private school under the name August Zieliński Private Trade Courses for Men. On 30 July 1919 it became a separate legal entity and was granted the status of an...
(1994) and Universität Bielefeld
Bielefeld University
Bielefeld University is a university in Bielefeld, Germany. Founded in 1969, it is one of the country's newer universities, and considers itself a "reform" university, following a different style of organization and teaching than the established universities...
(2004). He was an honorary visiting professor of the Huazhong University of Science and Technology
Huazhong University of Science and Technology
The Huazhong University of Science and Technology is a public, coeducational research university located in Wuhan, Hubei province, China. As a national key university, HUST is directly affiliated to the Ministry of Education of China. HUST has been referred as the flagship of China's higher...
School of Economics (1984).
Named for Hurwicz
First presented in 1950, the Hurwicz criterion is thought about to this day in the area of decision making called "under uncertainty." Abraham WaldAbraham Wald
- See also :* Sequential probability ratio test * Wald distribution* Wald–Wolfowitz runs test...
published decision function
Decision theory
Decision theory in economics, psychology, philosophy, mathematics, and statistics is concerned with identifying the values, uncertainties and other issues relevant in a given decision, its rationality, and the resulting optimal decision...
s that year. Hurwicz combined Wald's ideas with work done in 1812 by Pierre-Simon Laplace
Pierre-Simon Laplace
Pierre-Simon, marquis de Laplace was a French mathematician and astronomer whose work was pivotal to the development of mathematical astronomy and statistics. He summarized and extended the work of his predecessors in his five volume Mécanique Céleste...
. Hurwicz's criterion gives each decision a value which is "a weighted sum of its worst and best possible outcomes" represented as α and known as an index of pessimism or optimism. Variations have been proposed ever since and some corrections came very soon from Leonard Jimmie Savage
Leonard Jimmie Savage
Leonard Jimmie Savage was an American mathematician and statistician. Nobel Prize-winning economist Milton Friedman said Savage was "one of the few people I have met whom I would unhesitatingly call a genius."...
in 1954. These four approaches– Laplace, Wald, Hurwicz and Savage– have been studied, corrected and applied for over fifty years by many different people including John Milnor, G. L. S. Shackle
G. L. S. Shackle
George Lennox Sharman Shackle was an English economist. He made a practical attempt to challenge classical rational choice theory and has been characterised as a "post-Keynesian," though he is influenced as well by Austrian economics; he has been described as drawing "Keynesian conclusions from...
, Daniel Ellsberg
Daniel Ellsberg
Daniel Ellsberg, PhD, is a former United States military analyst who, while employed by the RAND Corporation, precipitated a national political controversy in 1971 when he released the Pentagon Papers, a top-secret Pentagon study of U.S. government decision-making in relation to the Vietnam War,...
, R. Duncan Luce
R. Duncan Luce
Robert Duncan Luce is the Distinguished Research Professor of Cognitive Science at the University of California, Irvine.Luce received a B.S. in Aeronautical Engineering from the Massachusetts Institute of Technology in 1945, and PhD in Mathematics from the same university in 1950...
and Howard Raiffa
Howard Raiffa
Howard Raiffa is the Frank P. Ramsey Professor of Managerial Economics, a joint chair held by the Business School and the Kennedy School of Government at Harvard University...
, in a field some date back to Jacob Bernoulli.
The University of Minnesota
University of Minnesota
The University of Minnesota, Twin Cities is a public research university located in Minneapolis and St. Paul, Minnesota, United States. It is the oldest and largest part of the University of Minnesota system and has the fourth-largest main campus student body in the United States, with 52,557...
, the College of Liberal Arts launched the Heller Hurwicz Institute, a new global initiative in the College of Liberal Arts at the University of Minnesota
University of Minnesota
The University of Minnesota, Twin Cities is a public research university located in Minneapolis and St. Paul, Minnesota, United States. It is the oldest and largest part of the University of Minnesota system and has the fourth-largest main campus student body in the United States, with 52,557...
created to inform public policy by supporting and promoting frontier economic research and by communicating our findings to leading academics, policymakers, and business executives around the world. The Institute will be housed in our department. Funds raised by the Institute will be used to attract and retain preeminent faculty and, in part, to support graduate student research.
The Leonid Hurwicz Distinguished Lecture is given to the Minnesota Economic Association (as is the Heller lecture). John Ledyard (2007), Robert Lucas
Robert Lucas, Jr.
Robert Emerson Lucas, Jr. is an American economist at the University of Chicago. He received the Nobel Prize in Economics in 1995 and is consistently indexed among the top 10 economists in the Research Papers in Economics rankings. He is married to economist Nancy Stokey.He received his B.A. in...
, Roger Myerson
Roger Myerson
Roger Bruce Myerson is an American economist and Nobel laureate recognized with Leonid Hurwicz and Eric Maskin for "having laid the foundations of mechanism design theory." A professor at the University of Chicago, he has made contributions as an economist, as an applied mathematician, and as a...
, Edward C. Prescott
Edward C. Prescott
Edward Christian Prescott is an American economist. He received the Nobel Memorial Prize in Economics in 2004, sharing the award with Finn E. Kydland, "for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles"...
, James Quirk, Nancy Stokey
Nancy Stokey
Nancy Laura Stokey is the Frederick Henry Prince Distinguished Service Professor of Economics at the University of Chicago. She has earned her BA in economics from the University of Pennsylvania in 1972 and her PhD from Harvard University in 1978, her thesis advisor being Nobel Prize in Economics...
and Neil Wallace
Neil Wallace
Neil Wallace is an American economist and professor at Pennsylvania State University. Wallace is considered one of the main proponents of new classical macroeconomics....
are among those who have delivered the lecture since it was inaugurated in 1992.
Nobel Prize in Economics
In October 2007, Hurwicz shared the Nobel Memorial Prize in Economic SciencesNobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics, but officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel , is an award for outstanding contributions to the field of economics, generally regarded as one of the...
with Eric Maskin
Eric Maskin
Eric Stark Maskin is an American economist and Nobel laureate recognized with Leonid Hurwicz and Roger Myerson "for having laid the foundations of mechanism design theory." He is the Albert O...
of the Institute for Advanced Study
Institute for Advanced Study
The Institute for Advanced Study, located in Princeton, New Jersey, United States, is an independent postgraduate center for theoretical research and intellectual inquiry. It was founded in 1930 by Abraham Flexner...
and Roger Myerson
Roger Myerson
Roger Bruce Myerson is an American economist and Nobel laureate recognized with Leonid Hurwicz and Eric Maskin for "having laid the foundations of mechanism design theory." A professor at the University of Chicago, he has made contributions as an economist, as an applied mathematician, and as a...
of the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
"for having laid the foundations of mechanism design theory
Mechanism design
Mechanism design is a field in game theory studying solution concepts for a class of private information games...
." During a telephone interview, a representative of the Nobel Foundation told Hurwicz and his wife that Hurwicz was the oldest person to win the Nobel Prize. Hurwicz said, "I hope that others who deserve it also got it." When asked which of all the applications of mechanism design he was most pleased to see he said welfare economics
Welfare economics
Welfare economics is a branch of economics that uses microeconomic techniques to evaluate economic well-being, especially relative to competitive general equilibrium within an economy as to economic efficiency and the resulting income distribution associated with it...
. The winners applied game theory, a field advanced by mathematician John Forbes Nash
John Forbes Nash
John Forbes Nash, Jr. is an American mathematician whose works in game theory, differential geometry, and partial differential equations have provided insight into the forces that govern chance and events inside complex systems in daily life...
, to discover the best and most efficient means to reach a desired outcome, taking into account individuals' knowledge and self-interest, which may be hidden or private. Mechanism design has been used to model negotiations and taxation, voting and elections, to design auctions such as those for communications bandwidth, elections and labor talks and for pricing stock options.
Unable to attend the Nobel Prize ceremony in Stockholm because of his age, Hurwicz received the prize in Minneapolis. Accompanied by Evelyn, his spouse of six decades, and his family, he was the guest of honor at a convocation held on the campus of the University of Minnesota presided over by university president Robert Bruininks
Robert Bruininks
Robert H. Bruininks is the former President of the University of Minnesota. He was named president on November 8, 2002 after briefly serving as the interim president. He has been employed by the University of Minnesota since 1968. He is the 15th full time president in the history of the...
. Immediately following a live broadcast of the Nobel Prize awards ceremony, Jonas Hafstrom, Swedish ambassador to the United States, personally awarded the Economics Prize to Professor Hurwicz.
Publications
- Hurwicz, Leonid (1945). "The Theory of Economic Behavior" American Economic Review, 35(5), p p. 909– 925. Exposition on game theoryGame theoryGame theory is a mathematical method for analyzing calculated circumstances, such as in games, where a person’s success is based upon the choices of others...
classic. - Hurwicz, Leonid (1969). "On the Concept and Possibility of Informational Decentralization," American Economic Review, 59(2), p. 513– 524.
- Hurwicz, Leonid (1973). The design of mechanisms for resource allocation, Amer. Econ. Rev., 63, p p. 1– 30.
- Hurwicz, Leonid (1995). "What is the Coase TheoremCoase theoremIn law and economics, the Coase theorem , attributed to Ronald Coase, describes the economic efficiency of an economic allocation or outcome in the presence of externalities. The theorem states that if trade in an externality is possible and there are no transaction costs, bargaining will lead to...
?," Japan and the World Economy, 7(1), pp. 49–74. Abstract.
External links
- Leonid Hurwicz Papers at Duke University
- Hurwicz Nobel Prize lecture
- Soumyen Sikdar, Leonid Hurwicz (1917–2008): A Tribute, Contemporary Issues and Ideas in Social Sciences, Vol 4, No 2 (2008)
- IDEAS/RePEc