Robert J. Aumann and Thomas C. Schelling today were awarded the Nobel Memorial Prize in Economic Sciences. Mr. Aumann is a professor of the Center for Rationality, Hebrew University of Jerusalem, and Mr. Schelling is a professor emeritus of the Department of Economics and School of Public Policy, University of Maryland, College Park, and professor emeritus of political economy at Harvard University
, Cambridge, Mass. The Nobel prize committee statement cited their work "for having enhanced our understanding of conflict and cooperation through game-theory analysis ... a method of used to analyze strategic interaction among different agents." As a result of their work, "behavior which used to be classified as irrational has become understandable and rational. Their work has contributed significantly to bridging the gap between economics and other behavioral and social sciences," the statement said. Richard H. Thaler, professor of behavioral science and economics and director of Center for Decision Research, Graduate School of Business, University of Chicago
, and a principal of Fuller and Thaler Asset Management, said Mr. Schelling "worked on commitment strategies in a game theory context (and) to what situations would one commit himself and eliminate other options." "Certainly he (Mr. Schelling) is a forerunner of behavioral economics and a friend of behavioral economics," Mr. Thaler said. Peter Jankovskis, principal and director of research, OakBrook Investments
, said he remembered Mr. Schelling as "one of the fathers of behavioral finance."
John W. Callahan was named president of Fidelity Institutional Retirement Services Co., Boston, according to a news release by Fidelity Investments. Mr. Callahan replaces William C. Carey, who left in June to become president of Fidelity Registered Investment Advisor Group. Previously Mr. Callahan was executive vice president of sales, consulting, relationship management and marketing for Fidelity Human Resources Services Co. Fidelity spokeswoman Jenny Engle said his replacement has not been announced yet.
Andrea Frazzini today was awarded the Crowell Memorial Prize by PanAgora Asset Management. Mr. Frazzini, an assistant professor of finance at the University of Chicago Graduate School of Business, was cited for his paper, "The Disposition Effect and Underreaction to News." The paper tests whether "the tendency of investors to lock in gains and ride losses, known as the disposition effect, induces under-reaction to corporate news, leading to price predictability," a PanAgora statement said. He will receive a $2,000 prize. Li Jin, assistant professor at Harvard Business School, and Joseph Chen, assistant professor at University of Southern California, each received second prizes of $1,000 for their respective papers on "Capital Gain Tax Overhang and Price Pressure" and "Downside Risk." PanAgora has awarded the prize since 2001 in honor of the late Richard Crowell, a founder of PanAgora who was an early leader in quantitative investing.