Michael Spence Quotes

One of the reasons why we can make a lot of money in equity markets is because they're auction-driven, and auction-driven markets are very different from almost any other kind of market.

Promoting the interaction of orders remains one of the most difficult, but crucially important, challenges we face concerning our national market system.

Market design is about understanding the details of markets in sufficient detail so that we can help fix them when they are broken.

I don't entirely reject the idea of efficient markets. It needs updating.

In the world I've known most of my life, old stories quickly lose their power over capital markets and get replaced by new surprises. That which everyone fixates on gets priced into the stock market quickly and can't drag on.

Markets are self-regulating only because some brave investors are prepared to bet against the market trend.

The one thing about markets is that they do not give any advance notice. If they did, they would be arbitraged away.

Markets have built in inefficiencies, serious inefficiencies which are well known.

The Nobel Prize in Economics is an incredible recognition for the work that my students, colleagues and I have done over the years. We all worked hard, but we were also lucky that the financial applications were so important.

I was convinced that the trading frequency measured a fundamental heartbeat of financial markets. Clearly it reflected the flow of information. It turns out also to be closely related to measures of liquidity.

Markets are, in many settings, self-organizing and 'efficient' in terms of maximizing the welfare of both buyers and sellers.

To establish the right price for a stock, the market must have adequate information, but it by no means follows that is the market has this information it will thereupon establish the right price.

The 1970s was the decade of developments in the new area of information economics. Search theory, which emphasized the need to gather information, was joined by models that featured asymmetric information, the case in which information differed across individual agents.

The thing about markets, and I think the thing people don't understand about that, is markets are not kind, but they're very efficient. So when the marketplace determines an inefficiency in the system, it corrects that, and a market system that's left alone will reward good behavior and punish bad behavior.

In an efficient market, at any point in time, the actual price of a security will be a good estimate of its intrinsic value.

I started in business journalism from the outside, so when I started writing about markets and business, I was struck by the fact that markets seemed to work well even though people are often irrational, lack good information and are not perfect in the way they think about decisions.

Nobody wants to be against technology, but I think that regulators should not - and people should not - assume that faster is always better in markets.

The Nobel Prize is given as a personal award but it also honors the field of research in which I have worked and it also honors my students and colleagues.

The adaptive markets hypothesis says that all economic institutions, like our own species, develop and change over time, depending on the population of investors that are engaged with them.

It is vital for officials and regulators to have input from people within our businesses who understand the intricacies of how financial markets operate and the consequences of certain policy decisions.

I had always been interested in markets - specifically, the theory that in financial markets, goods will trade at a fair value only when everyone has access to the same information.

You know what term you don't hear anymore? Arbitrage. The markets have gotten too efficient.

So everybody has some information. The function of the markets is to aggregate that information, evaluate it, and get it incorporated into prices.

'Reinventing the Bazaar,' by John McMillan, is a great and fun introduction to the wild variety and importance of markets throughout history and around the world. I finally understood how a Middle Eastern souk actually works economically and how to compare that to modern-day telecom-spectrum auctions. I love that book.

Prices are important not because money is considered paramount but because prices are a fast and effective conveyor of information through a vast society in which fragmented knowledge must be coordinated.