| On an October 10:
Prize in Chemistry.
The Royal Swedish Academy of Sciences
has decided to award the Nobel Prize in Chemistry for 2001 for
the development of catalytic asymmetric synthesis, with one
half jointly to
William S. Knowles St Louis,
Missouri, USA, and
Ryoji Noyori Nagoya University,
Chikusa, Nagoya, Japan,
"for their work on chirally catalysed hydrogenation reactions"
and the other half to
K. Barry Sharpless the Scripps
Research Institute, La Jolla, California,
"for his work on chirally catalysed oxidation reactions".
Mirror Image Catalysis
Many molecules appear in two
forms that mirror each other – just as our hands mirror each
other. Such molecules are called chiral. In nature one of these
forms is often dominant, so in our cells one of these mirror
images of a molecule fits "like a glove", in contrast to the
other one which may even be harmful. Pharmaceutical products
often consist of chiral molecules, and the difference between
the two forms can be a matter of life and death – as was the
case, for example, in the thalidomide disaster in the 1960s.
That is why it is vital to be able to produce the two chiral
The year 2001 Nobel Laureates in Chemistry
have developed molecules that can catalyse important reactions
so that only one of the two mirror image forms is produced.
The catalyst molecule, which itself is chiral, speeds up the
reaction without being consumed. Just one of these molecules
can produce millions of molecules of the desired mirror image
William S. Knowles discovered
that it was possible to use transition metals to make chiral
catalysts for an important type of reaction called hydrogenation,
thereby obtaining the desired mirror image form as the final
product. His research quickly led to an industrial process for
the production of the L-DOPA drug which is used in the treatment
of Parkinson's disease. Ryoji Noyori has led the further development
of this process to today's general chiral catalysts for hydrogenation.
K. Barry Sharpless, on
the other hand, is awarded half of the Prize for developing
chiral catalysts for another important type of reaction – oxidation.
The Laureates have opened up
a completely new field of research in which it is possible to
synthesise molecules and material with new properties. Today
the results of their basic research are being used in a number
of industrial syntheses of pharmaceutical products such as antibiotics,
anti-inflammatory drugs and heart medicines.
William S. Knowles, 84, born 1917 (US citizen). PhD 1942 at
Columbia University. Previously at Monsanto Company, St Louis,
USA. Retired since 1986.
Ryoji Noyori, 63 years, born 1938 Kobe, Japan (Japanese citizen).
PhD 1967 at Kyoto University. Since 1972 Professor of Chemistry
at Nagoya University and since 2000 Director of the Research
Center for Materials Science, Nagoya University, Nagoya, Japan.
K. Barry Sharpless, 60 years, born 1941 Philadelphia, Pennsylvania,
USA (US citizen). PhD 1968 at Stanford University. Since 1990
W.M. Keck Professor of Chemistry at the Scripps Research Institute,
La Jolla, USA. http://www.scripps.edu/chem/sharpless/kbs.html
Prize amount: SEK 10 million. Knowles and Noyori share one half
and Sharpless receives the other half.
Three scientists share the year 2001 Nobel Prize in Chemistry:
William S. Knowles, previously at Monsanto Company, St.
Louis, Missouri, USA; Ryoji Noyori, Nagoya University,
Chikusa, Nagoya, Japan and K. Barry Sharpless, The Scripps
Research Institute, La Jolla, California, USA. The Royal Swedish
Academy of Sciences has awarded the Prize for their development
of catalytic asymmetric synthesis. The achievements of these
three chemists are of great importance for academic research,
for the development of new drugs and materials, and are being
used in many industrial syntheses of pharmaceutical products
and other biologically active substances. This is a description
and background information about the scientists' award-winning
|Figure 1. Chirality in the amino acid
alanine is illustrated with models of its two forms,
which are mirror images of each other. They are designated
(S) and (R).
year's Nobel Prize in Chemistry concerns the way in which
certain chiral molecules can be used to speed up and control
important chemical reactions. The word chiral comes
from the Greek word cheir, which means hand. Our hands
are chiral – our right hand is a mirror image of our left
hand – as are most of life's molecules. If, for example,
we study the common amino acid alanine (figure 1), we see
that it can occur in two forms: (S)-alanine and (R)-alanine,
which are mirror images.
we twist or turn these forms, we cannot get them to overlap
each other. Apparently, they do not have the same three-dimensional
structure. The reason is that the carbon atom in the centre
binds the four different groups H, CH3, NH2
and COOH, which are located at the corners of a tetrahedron.
The unbroken bonds to NH2 and COOH indicate that
these bonds are in the plane of the paper, whereas the black
wedge shaped bond and the broken wedge shaped bond show that
they are directed upwards and downwards respectively in relation
to the plane of the paper.
was the Dutch chemist J. H. van 't Hoff and the French chemist
J. A. Le Bel who, independently of each other in 1874, discovered
this tetrahedral arrangement of the groups around the central
carbon atom. (van 't Hoff received the first Nobel Prize
in Chemistry 1901, but for other discoveries.)
the amino acid alanine occurs in two forms, called enantiomers.
When alanine is produced in a laboratory under normal conditions,
a mixture is obtained, half of which is (S)-alanine
and the other (R)-alanine. The synthesis is symmetrical
in the sense that it produces equal amounts of both enantiomers.
synthesis, on the other hand, deals with the production of
an excess of one of the forms. Why is this so important?
Let us go back to nature to find the answer.
may well think that both forms of chiral molecules ought
to be equally common in nature, the reactions should be symmetrical.
But when we study the molecules of the cells in close-up,
it is evident that nature mainly uses one of the two enantiomers.
That is why we have – and this applies to all living material,
both vegetable and animal – amino acids, and therefore peptides,
enzymes and other proteins, only of one of the mirror image
forms. Carbohydrates and nucleic acids like DNA and RNA are
the enzymes in our cells are chiral, as are other receptors
that play an important part in cell machinery. This means
that they prefer to bind to one of the enantiomers. In other
words, the receptors are extremely selective; only one of
the enantiomers fits the receptor's site like a key that
fits a lock. (This metaphor comes from another Nobel Laureate
in Chemistry, Emil Fischer, who was awarded the Prize in
the two enantiomers of a chiral molecule often have totally
different effects on cells, it is important to be able to
produce each of the two forms pure.
the smell of lemons
|Figure 2. (R)-limonene smells
of oranges while its enantiomer (S)-limonene
smells of lemons
drugs consist of chiral molecules. And since a drug must
match the molecules it should bind to itself in the cells,
it is often only one of the enantiomers that is of interest.
In certain cases the other form may even be harmful. This
was the case, for example, with the drug thalidomide, which
was sold in the 1960s to pregnant women. One of the enantiomers
of thalidomide helped against nausea, while the other one
could cause foetal damage.
are other, less dramatic examples of how differently the
two enantiomers can affect our cells. Limonene, for
example, is chiral, but the two enantiomers can be difficult
to distinguish at first glance (figure 2). The receptors
in our nose are more sensitive. One form certainly smells
of lemons but the other of oranges.
asymmetric synthesis - What is it?
is very important for industry to be able to produce products
as pure as possible. It is also important to be able to manufacture
large quantities of a product. For this reason the use of
catalysts is very important. A catalyst is a substance that
increases the rate of the reaction without being consumed
the past few decades there has been intensive research into
developing methods for producing - synthesising - one of
the enantiomers rather than the other. In a synthesis starting
molecules (substrate molecules) are used to build new molecules
(products) by means of various chemical reactions. It is
to researchers in this field that this year's Nobel Prize
in Chemistry has been awarded. The Laureates have developed
chiral catalysts for two important classes of reactions in
organic chemistry: hydrogenations and oxidations.
the early sixties it was not known whether catalytic asymmetric
hydrogenation was feasible, i.e. would it be possible to
catalyse an asymmetric reaction to produce an excess of one
of the enantiomers? The breakthrough came in 1968 when William
S. Knowles was working at the Monsanto Company, St Louis,
USA. He discovered that it was possible to use a transition
metal to produce a chiral catalyst that could transfer chirality
to a non-chiral substrate and get a chiral product. The reaction
was a hydrogenation in which the hydrogen atoms in
H2 are added to the carbons in a double bond.
A single catalyst molecule can produce millions of molecules
of the desired enantiomer.
|Figure 3. Knowles exchanged the non-chiral
phosphine triphenylphosphine in A to the chiral phosphine
B and obtained a catalyst for asymmetric hydrogenation.
experiments were based on two discoveries that had been made
a few years previously. In 1966 Osborn and Wilkinson had
published their pioneering synthesis of a soluble transition
metal complex, (A in figure 3), that made it possible to
catalyse a hydrogenation in solution. Their metal complex
was not chiral. At the centre of the complex was the transition
metal rhodium which bound four groups, ligands: three triphenylphosphine
molecules and one chlorine.
second discovery on which Knowles' pioneering work is based
on, is Horner's and Mislow's syntheses of chiral phosphines,
for example the enantiomer B shown in figure 3. Knowles'
hypothesis was that it might be possible to produce a catalyst
for asymmetric hydrogenation if the triphenylphosphine
groups in Osborn and Wilkinson's metal complex (A) was replaced
by one of the enantiomers of a chiral phosphine.
phosphine first used by Knowles was not enantiomerally pure,
yet it produced a mixture in which there was 15% more of
one enantiomer than the other. In other words the enantiomeric
excess was 15%.
this excess was modest and hardly of any practical use, the
result proved that it was in fact possible to achieve catalytic
asymmetric hydrogenation. Other scientists (Horner, Kagan,
Morrison and Bosnich) reached similar results shortly afterwards
and they have all contributed to open the door to a new,
exciting and important field for both academic and industrial
industrial catalytic asymmetric synthesis
|Figure 4. In this industrial synthesis
of L-DOPA developed by Knowles and co-workers the compound
C was used as the starting material. In the chiral
hydrogenation one of the enantiomers of DiPAMP was
used. The enantiomer D was 97.5% of the product and
after acid hydrolysis of D, L-DOPA was obtained.
aim was to develop an industrial synthesis of the amino acid
L-DOPA, which had proved useful in the treatment of Parkinson's
disease – a discovery for which A. Carlsson was awarded last
year's Nobel Prize in Physiology or Medicine. By testing
enantiomers of phosphines with a varied structure Knowles
and his colleagues quickly succeeded in producing usable
catalysts that provided a high enantiomeric excess, that
is, principally L-DOPA.
ligand later used in Monsanto's industrial synthesis of L-DOPA
was the diphosphine ligand DiPAMP. A rhodium complex with
this ligand (figure 4) gave a mixture of the enantiomers
of DOPA in 100% yield. The product contained of 97.5% L-DOPA.
Thus Knowles had in a short time succeeded in applying his
own basic research and that of others to create an industrial
synthesis of a drug. This was the first catalytic asymmetric
synthesis. It has been succeeded by many others.
a chiral catalyst molecule work?
|Figure 5. The hands on the right symbolise
the catalyst and the hands on the left the products.
They match better in the upper picture (the energy
is lower) than in the lower picture.
part does the catalyst molecule itself actually play in asymmetric
hydrogenation? Studies by the inorganic chemist J. Halpern
and others have clarified the reaction mechanism. The transition
metal, rhodium for example, in figure 4, which binds the
chiral diphosphine, has the ability to simultaneously bind
both H2 and the substrate. The complex obtained
then reacts and H2 is added to the double bond
in the substrate. This is the vital hydrogenation stage,
when a new chiral complex is formed from which the chiral
product is released. Thus from a substrate that is not
chiral, chirality has been transferred from the chiral catalyst
to the product. This product contains more of one enantiomer
than of the other, that is, the synthesis is asymmetric.
reason for the enantiomeric excess is to be found in the
hydrogenation stage, as the hydrogen can be added in two
ways that give the different enantiomers at different rates.
These two pathways utilise different transition complexes,
which are not mirror images and therefore have different
energy. Hydrogenation takes place more rapidly via the complex
with the lowest energy, thus producing an excess of one of
the enantiomers. This can be compared with the hands in a
handshake (figure 5). The hands in a handshake between two
right hands match better than a handshake between a right
and a left hand.
the development of better asymmetric hydrogenation catalysts
it is important to increase the energy difference between
the transition complexes in order to obtain, as a consequence,
larger enantiomeric excess. This is of vital interest in
industrial applications in which the aim is to achieve economy
in the process and environmentally acceptable methods, that
is, as few waste products as possible. This development has
been led by another of this year's Laureates in chemistry,
general hydrogenation catalysts
Japanese scientist Ryoji Noyori has carried out extensive
and intensive research and developed better and more general
catalysts for hydrogenation. The consequences of his research
are of great importance.
|Figure 6. The two enantiomers of Noyori's
useful BINAP is shown together with an example of a
stereoselective ketone reduction where the ester function
is left intact.
Noyori and co-workers published an article on the synthesis
of both enantiomers of the diphosphine ligand BINAP (figure
6). These catalyse, in complexes with rhodium, the synthesis
of certain amino acids with an enantiomeric excess of up
to 100%. The company Takasago International uses BINAP in
the industrial synthesis of the chiral aroma substance menthol,
since the early 1980s.
Noyori also saw the need for more general catalysts with
broader applications. Exchanging rhodium, Rh(I), for another
transition metal, ruthenium, Ru(II), proved, for example,
to be successful. The ruthenium(II)-BINAP complex hydrogenates
many types of molecules with other functional groups. These
reactions give a high enantiomeric excess and high yields
and can be scaled up for industrial use. Noyori's Ru-BINAP
is used as a catalyst in the production of (R)-1,2-propandiol
for the industrial synthesis of an antibiotic, levofloxacin.
Similar reactions are used for the synthesis of other antibiotics.
Figure 6 gives an example of a stereoselective ketone reduction.
catalysts have found wide application in the synthesis of
fine chemicals, pharmaceutical products and new, advanced
chirally catalysed oxidations
|Figure 7. The allylic alcohol is oxidized
to the epoxide (R)-glycidol using the oxidising
agent tertiary butylhydroperoxide in the presence of
a catalyst. This catalyst is formed in the reaction
mixture of titanium tetraisopropoxide and the diethylesther
of naturally occurring D-tartaric acid. The metal simultaneously
binds the chiral ligand, the hyperperoxide and the
substrate, after which the chiral epoxidation takes
the advances in chirally catalysed hydrogenation reactions,
Barry Sharpless has developed corresponding chiral catalysts
for other important reactions, oxidations. While hydrogenation
removes a functional group because the double bond is saturated,
oxidation leads to increased functionality. This creates
new possibilities for building new complex molecules.
realised that there was a great need for catalysts for asymmetric
oxidations. He also had ideas as to how these could be achieved.
He has made several important discoveries which here are
exemplified by his chiral epoxidation. In 1980 he carried
out successful experiments that led to a practical method
for the catalytic asymmetric oxidation of allylic alcohols
to chiral epoxides. This reaction utilised the transition
metal titanium (Ti) and chiral ligands and gave high enantiomeric
excess. Epoxides are useful intermediary products for various
types of synthesis. This method opened up the way for great
structural diversity and has had very wide applications in
both academic and industrial research. The synthesis of the
epoxide (R)-glycidol is shown in figure 7.
is used in the pharmaceutical industry to produce beta-blockers,
which are used as heart medicines. Many scientists have identified
Sharpless' epoxidation as the most important discovery in
the field of synthesis during the past few decades.
of the applications of this year's Nobel Laureates' pioneering
work have already been discussed. It is especially important
to emphasise the great significance of their discoveries
and improvements for industry. New drugs are the most important
application, but we may also mention the production of flavouring
and sweetening agents, and insecticides. This year's Nobel
Prize in Chemistry shows that the step from basic research
to industrial application could sometimes be a short one.
around the world many research groups are busy developing
other catalytic asymmetric syntheses that have been inspired
by the Laureates' discoveries. Their discoveries have provided
academic research with many important tools, thereby contributing
to more rapid advances in research – not only in chemistry
but also in materials science, biology and medicine. Their
work gives access to new molecules needed to investigate
hitherto undiscovered and unexplained phenomena in the molecular
scientific information (PDF)
Prize in Economics.
The Royal Swedish
Academy of Sciences announces that it has decided to award the
Bank of Sweden Prize in Economic Sciences in Memory of Alfred
Nobel, 2001, jointly to
George A. Akerlof, University
of California at Berkeley
A. Michael Spence Stanford
Joseph E. Stiglitz, Columbia
"for their analyses of markets with asymmetric information".
Markets with asymmetric information
Many markets are characterized
by asymmetric information: actors on one side of the market
have much better information than those on the other. Borrowers
know more than lenders about their repayment prospects, managers
and boards know more than shareholders about the firm's profitability,
and prospective clients know more than insurance companies about
their accident risk. During the 1970s, this year's Laureates
laid the foundation for a general theory of markets with asymmetric
information. Applications have been abundant, ranging from traditional
agricultural markets to modern financial markets. The Laureates'
contributions form the core of modern information economics.
George Akerlof demonstrated
how a market where sellers have more information than buyers
about product quality can contract into an adverse selection
of low-quality products. He also pointed out that informational
problems are commonplace and important. Akerlof's pioneering
contribution thus showed how asymmetric information of borrowers
and lenders may explain skyrocketing borrowing rates on local
Third World markets; but it also dealt with the difficulties
for the elderly to find individual medical insurance and with
labour-market discrimination of minorities.
Michael Spence identified
an important form of adjustment by individual market participants,
where the better informed take costly actions in an attempt
to improve on their market outcome by credibly transmitting
information to the poorly informed. Spence showed when such
signaling will actually work. While his own research emphasized
education as a productivity signal in job markets, subsequent
research has suggested many other applications, e.g., how firms
may use dividends to signal their profitability to agents in
the stock market.
Joseph Stiglitz clarified
the opposite type of market adjustment, where poorly informed
agents extract information from the better informed, such as
the screening performed by insurance companies dividing customers
into risk classes by offering a menu of contracts where higher
deductibles can be exchanged for significantly lower premiums.
In a number of contributions about different markets, Stiglitz
has shown that asymmetric information can provide the key to
understanding many observed market phenomena, including unemployment
and credit rationing.
For more than two decades, the theory of markets
with asymmetric information has been a vital and lively field
of economic research. Today, models with imperfect information
are indispensable instruments in the researcher's toolbox. Countless
applications extend from traditional agricultural markets in
developing countries to modern financial markets in developed
economies. The foundations for this theory were established
in the 1970s by three researchers: George Akerlof, Michael Spence
and Joseph Stiglitz. They receive the Bank of Sweden Prize in
Economic Sciences in Memory of Alfred Nobel, 2001, "for their
analyses of markets with asymmetric information".
Markets with Asymmetric Information
Why are interest rates often
excessively high on local lending markets in Third World countries?
Why do people who want to buy a good used car turn to a dealer
rather than a private seller? Why does a firm pay dividends
even if they are taxed more heavily than capital gains? Why
is it advantageous for insurance companies to offer clients
a menu of contracts where higher deductibles can be exchanged
for lower premiums? Why do rich landowners not bear the entire
harvest risk in contracts with poor tenants? These questions
exemplify familiar – but seemingly different – phenomena, each
of which has posed a challenge to economic theory. This year's
Laureates proposed a common explanation and extended the theory
when they argumented the theory with the realistic assumption
of asymmetric information: agents on one side of the market
have much better information than those on the other side. Borrowers
know more than the lender about their repayment prospects; the
seller knows more than buyers about the quality of his car;
the CEO and the board know more than the shareholders about
the profitability of the firm; policyholders know more than
the insurance company about their accident risk; and tenants
know more than the landowner about their work effort and harvesting
More specifically, Akerlof showed
that informational asymmetries can give rise to adverse selection
on markets. Due to imperfect information on the part of lenders
or prospective car buyers, borrowers with weak repayment prospects
or sellers of low-quality cars crowd out everyone else from
the market. Spence demonstrated that under certain conditions,
well-informed agents can improve their market outcome by signaling
their private information to poorly informed agents. The management
of a firm can thus incur the additional tax cost of dividends
to signal high profitability. Stiglitz showed that an uninformed
agent can sometimes capture the information of a better-informed
agent through screening, for example by providing choices from
a menu of contracts for a particular transaction. Insurance
companies are thus able to divide their clients into risk classes
by offering different policies, where lower premiums can be
exchanged for a higher deductible.
Akerlof's 1970 essay, "The Market
for Lemons" is the single most important study in the literature
on economics of information. It has the typical features of
a truly seminal contribution – it addresses a simple but profound
and universal idea, with numerous implications and widespread
Here Akerlof introduces the first
formal analysis of markets with the informational problem known
as adverse selection. He analyses a market for a good where
the seller has more information than the buyer regarding the
quality of the product. This is exemplified by the market for
used cars; "a lemon" – a colloquialism for a defective old car
– is now a well-known metaphor in economists' theoretical vocabulary.
Akerlof shows that hypothetically, the information problem can
either cause an entire market to collapse or contract it into
an adverse selection of low-quality products.
Akerlof also pointed to the prevalence
and importance of similar information asymmetries, especially
in developing economies. One of his illustrative examples of
adverse selection is drawn from credit markets in India in the
1960s, where local lenders charged interest rates that were
twice as high as the rates in large cities. However, a middleman
who borrows money in town and then lends it in the countryside,
but does not know the borrowers' creditworthiness, risks attracting
borrowers with poor repayment prospects, thereby becoming liable
to heavy losses. Other examples in Akerlof's article include
difficulties for the elderly to acquire individual health insurance
and discrimination of minorities on the labor market.
A key insight in his "lemons
paper" is that economic agents may have strong incentives to
offset the adverse effects of information problems on market
efficiency. Akerlof argues that many market institutions may
be regarded as emerging from attempts to resolve problems due
to asymmetric information. One such example is guarantees from
car dealers; others include brands, chain stores, franchising
and different types of contracts.
A timely example might further
illustrate the idea that asymmetric information can generate
adverse selection. At first, firms in a new sector – such as
today's IT sector – might seem identical to an uninformed bystander,
while some "insiders" may have better information about the
future profitability of such firms. Firms with lower than average
profitability will therefore be overvalued and more inclined
to finance new projects by issuing their own shares than high-profitability
firms which are undervalued by the market. As a result, low-profitability
firms tend to grow more rapidly and the stock market will initially
be dominated by "lemons". When uninformed investors eventually
discover their mistake, share prices fall – the IT bubble bursts.
Apart from his research on asymmetric
information, Akerlof has developed economic theory with insights
from sociology and social anthropology. His most noteworthy
contributions in this genre concern efficiency on labor markets.
Akerlof points out that emotions such as reciprocity towards
an employer or fairness towards colleagues can prompt wages
to be set so high as to induce unemployment. He has also examined
how social conventions such as the caste system may have unfavorable
effects on economic efficiency. As a result of these studies,
Akerlof's research is also well known and influential in other
Spence asked how better informed
individuals on a market can credibly transmit, "signal", their
information to less informed individuals, so as to avoid some
of the problems associated with adverse selection. Signaling
requires economic agents to take observable and costly measures
to convince other agents of their ability or, more generally,
of the value or quality of their products. Spence's contribution
was to develop and formalize this idea as well as to demonstrate
and analyze its implications.
Spence's pioneering essay from
1973 (based on his PhD thesis) deals with education as a signal
of productivity on the labor market. A fundamental insight is
that signaling cannot succeed unless the signaling cost differs
sufficiently among the "senders", i.e., job applicants. An employer
cannot distinguish the more productive applicants from those
who are less productive unless the former find it sufficiently
less costly to acquire an education that the latter choose a
lower level of education. Spence also pointed to the possibility
of different "expectations-based" equilibria for education and
wages, where e. g. men and white receive a higher wage than
women and black with the same productivity.
Subsequent research contains
numerous applications which extend this theory and confirm the
importance of signaling on different markets. This covers phenomena
such as costly advertising or far-reaching guarantees as signals
of productivity, aggressive price cuts as signals of market
strength, delaying tactics in wage offers as a signal of bargaining
power, financing by debt rather than by issuing new shares as
a signal of profitability, and recession-generating monetary
policy as a signal of uncompromising commitment to reduce stubbornly
An early example in the literature
concerns dividends. Why do firms pay dividends to their shareholders,
knowing full well that they are subject to higher taxes (through
double taxation) than capital gains? Retaining the profits within
the firm would appear as a cheaper way to favor the shareholders
through the capital gains of a higher share price. One possible
answer is that dividends can act as a signal for favorable prospects.
Firms with "insider information" about high profitability pay
dividends because the market interprets this as good news and
therefore pays a higher price for the share. The higher share
price compensates shareholders for the extra tax they pay on
In addition to his research on
signaling, Spence was a forerunner in applying the results and
insights of the 1996 economics laureates, Vickrey and Mirrlees,
to the analysis of insurance markets. During the period 1975-1985,
he was one of the pioneers in the wave of game-theory inspired
work that clarified many aspects of strategic market behavior
within the so-called new theory of industrial organization.
One of Stiglitz's classical papers,
coauthored with Michael Rothschild, formally demonstrated how
information problems can be dealt with on insurance markets
where the companies do not have information on the risk situation
of individual clients. This work is an obvious complement to
Akerlof's and Spence's analyses by examining what actions uninformed
agents can take on a market with asymmetric information. Rothschild
and Stiglitz show that the insurance company (the uninformed
party) can give its clients (the informed party) effective incentives
to "reveal" information on their risk situation through so-called
screening. In an equilibrium with screening, insurance companies
distinguish between different risk classes among their policyholders
by offering them to choose from a menu of alternative contracts
where lower premiums can be exchanged for higher deductibles.
Stiglitz and his numerous coauthors
have time and again substantiated that economic models may be
quite misleading if they disregard informational asymmetries.
Their common message has been that in the perspective of asymmetric
information, many markets take on a completely different guise,
as do the conclusions regarding appropriate forms of public-sector
regulation. Stiglitz has analyzed the implications of asymmetric
information in many different contexts, varying from unemployment
to the design of an optimal tax system. Several of his essays
have become important stepping stones for further research.
One example is Stiglitz's work
with Andrew Weiss on credit markets with asymmetric information.
Stiglitz and Weiss show that in order to reduce losses from
bad loans, it may be optimal for bankers to ration the volume
of loans instead of raising the lending rate. Since credit rationing
is so common, these insights were important steps towards a
more realistic theory of credit markets. They have also had
a substantial impact in the domains of corporate finance, monetary
theory and macroeconomics.
In collaboration with Sanford
Grossman, Stiglitz analyzed efficiency on financial markets.
Their key result is known as the Grossman-Stiglitz paradox:
if a market were informationally efficient, i.e., all relevant
information is reflected in market prices, then no single agent
would have sufficient incentive to acquire the information on
which prices are based.
Stiglitz is also one of the founders
of modern development economics. He has shown that asymmetric
information and economic incentives are not merely academic
abstractions, but highly concrete phenomena with far-reaching
explanatory value in the analysis of institutions and market
conditions in developing economies. One of his first studies
of information problems dealt with sharecropping, an ancient,
though still common, form of contracting.
A sharecropping contract stipulates
that the harvest should be divided between a landowner and his
tenant in fixed shares (usually half each). Since the landowner
is usually richer than the tenant, it would seem advantageous
to both parties to let the landowner bear the entire risk. But
such a contract would not give the tenant strong enough incentives
to cultivate the land efficiently. Considering the landowner's
inferior information about harvest conditions and the tenant's
work effort, sharecropping is in fact the optimal solution for
Joseph Stiglitz's many contributions
have transformed the way economists think about the working
of markets. Together with the fundamental contributions by George
Akerlof and Michael Spence, they make up the core of the modern
economics of information.
scientific information (PDF):
The Nobel Prize in Physics is announced to go
with one half jointly to Zhores Ivanovich
Alferov, 70, A.F. Ioffe Physico-Technical Institute,
St. Petersburg, Russia, and Herbert Kroemer,University
of California at Santa Barbara, California, USA, "for
developing semiconductor heterostructures used in high-speed-
and opto-electronics" and one half to Jack
S. Kilby, 76, Texas Instruments, Dallas, Texas, USA,
"for his part in the invention of the integrated circuit"
The researchers' work has laid
the foundations of modern information technology, IT, particularly
through their invention of rapid transistors, laser diodes,
and integrated circuits (chips).
Modern information technology
In today's society increasing
amounts of information flow from our computers out through the
optical fibres of the Internet and through our mobile telephones
to satellite radio links all over the world. Two simple but
fundamental requirements are put on a modern information system
for it to be practically useful. It must be fast, so
that large volumes of information can be transferred in a short
time. The user's apparatus must be small so that there
is room for it in offices, homes, briefcases or pockets.
Through their inventions the year
2000 Nobel Laureates in physics have laid a stable foundation
for modern information technology. Zhores I. Alferov
and Herbert Kroemer have invented and developed fast
opto- and microelectronic components based on layered semiconductor
structures, termed semiconductor heterostructures. Fast transistors
built using heterostructure technology are used in e.g. radio
link satellites and the base stations of mobile telephones.
Laser diodes built with the same technology drive the flow of
information in the Internet's fibre-optical cables. They are
also found in CD players, bar-code readers and laser pointers.
With heterostructure technology powerful light-emitting diodes
are being built for use in car brake-lights, traffic lights
and other warning lights. Electric bulbs may in the future be
replaced by light-emitting diodes.
Jack S. Kilby is being
rewarded for his part in the invention and development of the
integrated circuit, the chip. Through this invention microelectronics
has grown to become the basis of all modern technology. Examples
are powerful computers and processors which collect and process
data and control everything from washing machines and cars to
space probes and medical diagnostic equipment such as computer
tomographs and magnetic resonance cameras. The microchip has
also led to our environment being flooded with small electronic
apparatuses, anything from electronic watches and TV games to
mini-calculators and personal computers.
Zhores I. Alferov born 15
March 1930 in Vitebsk, White Russia, then the Soviet Union.
Doctor's degree in physics and mathematics 1970 at A.F. Ioffe
Physico-Technical Institute in St. Petersburg (then Leningrad),
Russia. Director of this Institute since 1987. http://22.214.171.124/pti00002.html
Herbert Kroemer born 1928
in Germany. Doctor's degree in physics 1952 at University of
Göttingen. Employed among other places at RCA Laboratories,
Princeton, NJ, USA 1954-57 and at Varian Associates, Palo Alto,
CA, USA, 1959-66. Professor of Physics, University of Colorado,
Boulder, 1968-76 and subsequently University of California at
Santa Barbara, USA. http://www.ece.ucsb.edu/Faculty/Kroemer/default.html
Jack S. Kilby born 8 November
1923 in Jefferson City, Missouri, USA. Employed at Texas Instruments
since 1958. Professor at Texas A&M University 1978-85. http://www.ti.com/corp/docs/kilbyctr/jackstclair.shtml
Se otorga el premio Nobel
de Física a Jack
S. Kilby, por el primer circuito integrado, precursor del
chip, 42 años después del hallazgo. Comparte el premio con Herbert
Kroemer y Zhores
Alfiorov, que desarrollaron los dispositivos semiconductores
de alta velocidad.
More information: http://www.nobel.se/announcement/2000