Nobel economist seeks universal answers

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.
The 2007 Nobel Laureate for Economics, Professor Roger B. Myerson saidhe does not think the mechanism design theory can bring immediateanswers for the economic restructuring in Vietnam , but it can helpeconomic restructuring by setting new rules to change how people makeprofits and thus economic decisions.

Myerson is inVietnam for activities under the fourth ASEAN event series Bridges -Dialogues Towards a Culture of Peace. Following is his talks withVietnam 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 abasic mathematical technique to enable us and other economic analysts tounderstand how people trust each other when they have differentinformation.

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 goalof developing more general frameworks to compare economic and politicalsystems using economic analysis.

Most recently, I have beenworking on new economic models to deal with macro-economic problemscaused by the crisis. I hope that the theory can offer people someuseful insights into economic problems in the world.

Why doyou study the mechanism design theory? How can it be applied to theworld economic crisis?
How should Vietnam apply the theory ineconomic restructuring?

I think the basic approach of mosteconomists, and I am certainly one of them, is to look for ways todesign a society in which people can take care of each other, startingwith the assumption that everyone in that society is a selfishmaterialist who wants to consume for him or herself and his or herfamily.

I don't want to assume that people produce because theywant to give to others. I don't want to assume that the leaders of ourgovernments are leading us because they love us.

I think peopledo have benevolence. We all care about each other, of course, andpeople can be motivated by a desire to help all of humanity.

However, an economist studies economic and social systems under theassumption that people are very selfish as individuals.

This isbecause if we can find a way to design our society so that it workseven if we are selfish, then if we are actually more benevolent, it willwork even better. So that's our approach. It's not one of benevolence.

I am certainly trying to seek methods of economic analysis thatapply 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 andtherefore get people to change their behaviour.

I don't thinkthe mechanism design theory can bring immediate answers for the economicrestructuring in Vietnam. But it can help economic restructuring bysetting new rules to change how people make profits and thus economicdecisions.

What advice can you offer Vietnam to help thecountry regain its economic sustainability given the world economiccrisis?

An economy that depends heavily on exports issignificantly vulnerable to world economic fluctuations. That is thecost of any strategy emphasizing export.

The global recessionmeans Vietnam will find fewer export markets, so the remedy is toencourage the development of retail distribution in the domestic marketand build a more competitive market in which the private sector cancontribute more actively to economic growth by satisfying domesticconsumers' demand.

What do you expect from your business trip?

I know I have a lot to learn from Vietnam. The country wants toexplore a model of political and economic development that is differentfrom the path followed by Europe and America and I am interestedin that problem.

I am interested in the VietnameseGovernment's attempt to do that. Any economic system can be successfulin some ways if it solves the problems of trust, resource allocation andgovernance. I believe that addressing problems of ownership and givingpeople more voice in politics should be a seminal element in Vietnam's development.-VNA

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