Nobel Prize laureate takes UAA chair

Posted: Sunday, December 15, 2002

ANCHORAGE (AP) -- A winner of this year's Nobel Prize for economics will teach at the University of Alaska Anchorage next year, the university announced Friday.

Professor Vernon L. Smith, 75, has accepted the economics chair endowed with $5 million from the estate of the late Anchorage banker Elmer Rasmuson. University officials were clearly proud to have snared such a high-profile professor for the first person to hold the chair.

Smith shared this year's Nobel economics prize with a Princeton University psychology professor, Daniel Kahneman.

Smith was honored for pioneering the field of experimental economics and market design. His work has shown that markets do not need a large number of participants to operate efficiently.

''He developed experiments and actually went out and tested how people actually act in market situations,'' said Scott Goldsmith, who leads UAA's Institute for Social and Economic Research. That was a novel approach in the field, he said.

''I hope he can help us understand how Alaska markets work, and how to make those markets more efficient,'' Goldsmith said.

Smith, currently a professor at George Mason University in Virginia, has visited Alaska several times, including last summer, and is a friend of UAA professor Steve Jackstadt, Goldsmith said. Smith even made a trip up the Alaska Highway once, the professor related.

''This is a Nobel laureate who knows something about Alaska,'' Goldsmith said. ''He absolutely understands the economic issues Alaska is reckoning with.''

The Alaska connection, particularly the link with professor Jackstadt, helped university officials recruiting for the first person to fill the Rasmuson chair, said Lee Gorsuch, UAA chancellor. Smith was first contacted a couple weeks before the Nobel honor was announced.

''We pretty much stopped the search when it became clear he had an interest in coming up here,'' Gorsuch said.

Smith's acceptance of the position has generated ''a tremendous amount of excitement among the students and staff in the business department,'' said the department's new dean, Tom Case.

Gorsuch figures it will help the university recruit prominent scholars to take the position in the future.

Smith will teach one class and will have an active agenda of speaking and working with university researchers.

The professor could look at how Alaska markets are structured, Goldsmith said, examining the process of getting Alaska fish to market, for example.

''He can look at structuring those markets in a way that is better than what we have now,'' Goldsmith said.

In the market for superstar academics, the $5 million Rasmuson endowment put UAA in the right price range. Smith will receive ''pretty close to $240,000'' for his year of work here, Gorsuch said.

Smith was traveling in Europe and could not be reached, according to the university. He is taking a leave of absence from George Mason for the year he will spend at UAA, Gorsuch said.

Smith received a degree in electrical engineering from California Institute of Technology in 1949, then switched to economics, earning a master's degree from the University of Kansas, in his home state, before moving to Harvard University for his doctorate, which he received in 1955. He conducted his first experiments in marketing mechanisms at Purdue University in 1956.

Over the years, he established himself as the premier researcher. He also was a pioneer in environmental economics and is considered an expert on capital formation. His resume lists more than 14 pages of publications over his career of close to half a century.

The Nobel economics prize is a fairly new addition. It was endowed by the Bank of Sweden and first awarded in 1969. Since then, 34 of the 51 recipients have been Americans.

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