ERIC MASKIN

How do we ensure in the case of public goods that they are provided at all, and that they are provided at the right level, taking into account citizens' preferences?

When a bank calls in a loan, it obviously hurts the customer in question. But it also adversely affects other banks that have lent to this borrower. They are now less likely to be repaid and so can't as readily lend to their own customers.

Devising a mechanism is a lot like solving a puzzle - and gives you the same kind of kick.

There is universal consensus among experts that the earth's atmosphere is heating up - and that we are responsible for it by putting carbon dioxide in the atmosphere. We also know that the consequences of global warming are catastrophic. But how do we make sure that all countries reduce greenhouse gases?

The market doesn't work very well when it comes to public goods.

Perhaps one day earthquakes, hurricanes and financial crashes will all be predictable. But we don't have to wait until then for seismology, meteorology and economics to become sciences; they already are.

In an industry with highly sequential innovation, it may be better for society to scrap patents altogether than try to tighten them.

I entered economics because of a course I took on 'information economics,' which I found fascinating.

I like to work on a number of things simultaneously. If you're working on a variety of projects and if you get stuck on one of them, you can move to another without grinding your gears indefinitely.

A properly designed tax system can strike a balance between helping the poor and, at the same time, giving people the incentive to work.

I was born in New York City but grew up across the Hudson River in Alpine, New Jersey.

At Tenafly High, I was lucky to have some dedicated teachers; I'm especially indebted to my calculus instructor, Francis Piersa, who opened my eyes to the striking beauty of mathematics.

I don't want to make public statements about issues that I have not studied in detail.

Markets work well with goods that economists call private goods.

If I buy a car, I use the car, you don't, and the market for cars works pretty well. But there are many other sorts of goods, often very important goods, which are not provided well through the market. Often, these go under the heading of public goods.

Through meteorology, we know essentially how hurricanes form, even though we can't say where the next storm will arise.

If banks anticipate government will come to the rescue should the credit market go badly awry, they may make loans that would otherwise be imprudent, e.g. subprime loans with little prospect of repayment.

A contingent bailout policy - implicit or explicit - must be coupled with some regulation of what banks can and cannot do. For example, a ban on lending to uncreditworthy customers might well make sense.

The theory of mechanism design can be thought of as the 'engineering' side of economic theory.

Because mechanism designers do not generally know which outcomes are optimal in advance, they have to proceed more indirectly than simply prescribing outcomes by fiat; in particular, the mechanisms designed must generate the information needed as they are executed.

I probably learned most at MIT by teaching and working with Peter Diamond, who acted like a big brother to me during my time in the department.

I choose questions to work on according to how much they excite me.

It wasn't that Harvard was deliberately trying to overwork me, but I think I had a tendency to take on more things out of enthusiasm than were good for me.

If I'm a bank, and I'm making risky loans, I have an incentive, if I can, to make those loans using other people's money: in other words, to make highly leveraged loans.

Most policy makers embrace a religious-like belief that the market can and should solve every problem.