The 2007 Nobel Laureate for Economics, Professor Roger B. Myerson said he does not think the mechanism design theory can bring immediate answers for the economic restructuring in Vietnam , but it can help economic restructuring by setting new rules to change how people make profits and thus economic decisions.
Myerson is in Vietnam for activities under the fourth ASEAN event series Bridges - Dialogues Towards a Culture of Peace. Following is his talks with Vietnam News Agency reporters.
Could you explain the work that won the 2007 Nobel Prize?
I am a mathematical economics theorist. The work that I did was a basic mathematical technique to enable us and other economic analysts to understand how people trust each other when they have different information.
I used game theory to find ways to characterise the effects of communication when individuals have different information.
I also tried to apply mathematical theory to economics with the goal of developing more general frameworks to compare economic and political systems using economic analysis.
Most recently, I have been working on new economic models to deal with macro-economic problems caused by the crisis. I hope that the theory can offer people some useful insights into economic problems in the world.
Why do you study the mechanism design theory? How can it be applied to the world economic crisis?
How should Vietnam apply the theory in economic restructuring?
I think the basic approach of most economists, and I am certainly one of them, is to look for ways to design a society in which people can take care of each other, starting with the assumption that everyone in that society is a selfish materialist who wants to consume for him or herself and his or her family.
I don't want to assume that people produce because they want to give to others. I don't want to assume that the leaders of our governments are leading us because they love us.
I think people do have benevolence. We all care about each other, of course, and people can be motivated by a desire to help all of humanity.
However, an economist studies economic and social systems under the assumption that people are very selfish as individuals.
This is because if we can find a way to design our society so that it works even if we are selfish, then if we are actually more benevolent, it will work even better. So that's our approach. It's not one of benevolence.
I am certainly trying to seek methods of economic analysis that apply to any economy or to any society or to any political system.
However, my work does not directly apply to the financial crisis. Rather, it shows how we can change the rules of financial systems and therefore get people to change their behaviour.
I don't think the mechanism design theory can bring immediate answers for the economic restructuring in Vietnam. But it can help economic restructuring by setting new rules to change how people make profits and thus economic decisions.
What advice can you offer Vietnam to help the country regain its economic sustainability given the world economic crisis?
An economy that depends heavily on exports is significantly vulnerable to world economic fluctuations. That is the cost of any strategy emphasizing export.
The global recession means Vietnam will find fewer export markets, so the remedy is to encourage the development of retail distribution in the domestic market and build a more competitive market in which the private sector can contribute more actively to economic growth by satisfying domestic consumers' demand.
What do you expect from your business trip?
I know I have a lot to learn from Vietnam. The country wants to explore a model of political and economic development that is different from the path followed by Europe and America and I am interested in that problem.
I am interested in the Vietnamese Government's attempt to do that. Any economic system can be successful in some ways if it solves the problems of trust, resource allocation and governance. I believe that addressing problems of ownership and giving people more voice in politics should be a seminal element in Vietnam's development.-VNA
Myerson is in Vietnam for activities under the fourth ASEAN event series Bridges - Dialogues Towards a Culture of Peace. Following is his talks with Vietnam News Agency reporters.
Could you explain the work that won the 2007 Nobel Prize?
I am a mathematical economics theorist. The work that I did was a basic mathematical technique to enable us and other economic analysts to understand how people trust each other when they have different information.
I used game theory to find ways to characterise the effects of communication when individuals have different information.
I also tried to apply mathematical theory to economics with the goal of developing more general frameworks to compare economic and political systems using economic analysis.
Most recently, I have been working on new economic models to deal with macro-economic problems caused by the crisis. I hope that the theory can offer people some useful insights into economic problems in the world.
Why do you study the mechanism design theory? How can it be applied to the world economic crisis?
How should Vietnam apply the theory in economic restructuring?
I think the basic approach of most economists, and I am certainly one of them, is to look for ways to design a society in which people can take care of each other, starting with the assumption that everyone in that society is a selfish materialist who wants to consume for him or herself and his or her family.
I don't want to assume that people produce because they want to give to others. I don't want to assume that the leaders of our governments are leading us because they love us.
I think people do have benevolence. We all care about each other, of course, and people can be motivated by a desire to help all of humanity.
However, an economist studies economic and social systems under the assumption that people are very selfish as individuals.
This is because if we can find a way to design our society so that it works even if we are selfish, then if we are actually more benevolent, it will work even better. So that's our approach. It's not one of benevolence.
I am certainly trying to seek methods of economic analysis that apply to any economy or to any society or to any political system.
However, my work does not directly apply to the financial crisis. Rather, it shows how we can change the rules of financial systems and therefore get people to change their behaviour.
I don't think the mechanism design theory can bring immediate answers for the economic restructuring in Vietnam. But it can help economic restructuring by setting new rules to change how people make profits and thus economic decisions.
What advice can you offer Vietnam to help the country regain its economic sustainability given the world economic crisis?
An economy that depends heavily on exports is significantly vulnerable to world economic fluctuations. That is the cost of any strategy emphasizing export.
The global recession means Vietnam will find fewer export markets, so the remedy is to encourage the development of retail distribution in the domestic market and build a more competitive market in which the private sector can contribute more actively to economic growth by satisfying domestic consumers' demand.
What do you expect from your business trip?
I know I have a lot to learn from Vietnam. The country wants to explore a model of political and economic development that is different from the path followed by Europe and America and I am interested in that problem.
I am interested in the Vietnamese Government's attempt to do that. Any economic system can be successful in some ways if it solves the problems of trust, resource allocation and governance. I believe that addressing problems of ownership and giving people more voice in politics should be a seminal element in Vietnam's development.-VNA
