Chocolate and Gold Coins

Monday, February 20, 2006

1YAT: Lottery Technology

One year ago, I wrote possibly my best post ever. It was certainly different. It combined some genuine economic theory with a little drama and even some humor.

Lottery Techonology:
During the 1990’s in Minnesota, the Deparment of Economics was dominated by the theories of Prof. Edward Prescott, who won the Nobel Prize in economics just last year. Prof. Prescott was famous for real business cycles, and for furthering the theory on rational expectations and dynamic general equilibrium. But he had other pet ideas as well. One of them was the lottery technology. Like many ideas of brilliant academics, it was an idea that was both brilliant and daft at the same time. It was brilliant because it nicely transformed a nasty economic model into a nice one in which a bunch of theorems would apply. It was daft because a lottery in the way that Prof. Prescott envisioned it would be nothing you would ever see in a real marketplace (a small detail in the world of economic theory). I'm not saying that Prof. Prescott is daft; I'm saying that the idea of a lottery technology is academic. But I always wondered if someone could find a practical application for this idea. [Link]


Read the whole thing.

8 Comments:

  • Hi,

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    By Blogger real1, at 9:40 AM  

  • Hi Real1
    Yes I am intested in gold. Please send samples. Thanks.

    By Blogger Michael Higgins, at 10:32 AM  

  • Michael,

    That was a nice post. Like many brilliant ideas, only an economist would take it seriously.

    There's only one problem with your dramatization: the Libertarians were elected and we still have Medicare? Completely unrealistic.

    By Anonymous Anonymous, at 5:21 PM  

  • Hi Mike,
    quite a site you've there. Since I'm a undergrad student of economics at that 'has been' Calcutta university [planning to move to the States for Masters & hopefully Phd]it's good to know that you guys have a hotshot nobelite over there. I have heard about the theory. Though most of it has gone over my head.

    By the way, who do you think is goig to win the Senate seat in MN? Considering the political atmosphere, Democrats can hold on to their open seat.
    Suggestion: why not Jesse Ventura contest for the seat?
    Norm Coleman is a slimeweasel. Keep it up blogger Michael.

    By Blogger Agarwaen Mormegil, at 11:45 AM  

  • Hi Anon and Aragorn241
    Anon: I often wonder about the lottery technology. Someone will figure out how to use it someday.

    Aragorn: I wonder if you took a class from Arnab's father? or is that another institution.

    I don't live in Minnesota anymore and neither does Prof. Prescott. I was aghast when Ventura won the Minn election but left (for unrelated reasons) soon after.

    By Blogger Michael Higgins, at 3:14 PM  

  • This comment has been removed by a blog administrator.

    By Blogger real1, at 5:58 PM  

  • LOL...

    By Blogger real1, at 6:04 PM  

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