Joseph Stiglitz: preference

Transcript context

…Something else striking about your career that I noticed reviewing for this podcast. This is especially at a time when co-authorship is not nearly as normal as it is now. The number of distinct co-authors you have — and they’re each famous in their own right — there’s Michael Rothschild, Avinash Dixit, Sandy Grossman, Tony Atkinson, Carl Shapiro, Andrew Weiss, [Bruce] Greenwald, I’m sure there are others I’ve forgotten about. I don’t see anyone else doing that. There are people who have standing co-authors, like there’s Sargent and Wallace for a while, but what led you to have this pattern of co-authorship? And how has that shaped your thought? Well, quite frankly, I like interacting with other people. I think I’m a social person, and I’ve been lucky, you might say, to bubble up with ideas. I share those ideas with other people over dinner, over lunch, in the coffee room, and then we start talking, and those ideas start jelling, and we wind up writing a paper together. I’ve always felt that each of us has something to contribute. Many of my co-authors bring a lot of mathematical skills to the table, but many of them bring other skills, empirical skills. So, I’ve been just very, very lucky. Some of these, like Andy Weiss and Avishay Braverman, were students of mine, and we would start talking about ideas as I try to guide them in their PhD. And when they finish their PhD, there are a whole set of other ideas that we haven’t fully developed in their thesis, so we start working together in a whole set of papers that follow on. If I think about your 1980 piece with Sandy Grossman, what are your current views on why trading volume is so high? It seems to violate a lot of rationality theorems. Well, if someone’s trading with you, you might plausibly assume they know at least as much as you do. Fischer Black famously said, “We just need to put trading in the utility function.” That’s a kind of deus ex machina. What do you think now, 44 years later?…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.