Read our short interview with professor Stephen Morris (Princeton University), who gave a research seminar at CERGE-EI on May 9, 2019. The interview was prepared by our PhD student, Vladimír Novák.
Professor Morris, thank you very much for your time and this interview. Yesterday, you started your seminar talk, entitled “Incomplete Information and Coordination” by emphasising a misunderstanding about the value of John Harsanyi’s contribution and implicit common knowledge assumptions. (Note for the reader: Harsanyi’s contribution lies in showing that by working with the universal type of space, we can dispense with common knowledge assumptions. However, the economics profession went straight back to making unrealistic complete information assumptions, by continuing to work with small and simple type spaces).
● When did you realize that scholars do not use the full potential of Harsanyi’s contribution? What is your opinion about recent papers that still do not appropriately interpret Harsanyi’s idea?
At the World Congress of the Econometric Society in Tokyo in 1995, I was the discussant of a paper by Eddie Dekel and Faruk Gul. I haven’t gone back to look at their paper recently but I think they introduced me to a number of the themes in my talk.
I don’t want to criticize very productive work that uses very simple type spaces. I just want to highlight that they are making strong common knowledge assumptions and to advertise that it is an interest direction to try and weaken those assumptions.
● Should we revisit older traditional papers and textbooks in economics, to see whether they are misinterpreted in the current literature? Could this be a good opportunity for PhD students searching for research topics?
I’m not sure this is a good research strategy: I think I just wanted to highlight the history as a hook to make a substantive point about modelling higher order beliefs.
● In many debates among economists, one can hear that it is becoming harder to publish and to attract attention with purely theoretical papers and that we should combine theory with experiments and/or with more empirics. What do you think about prospectives for pure theorists in the future and about their opportunities to find attractive placements on the job market?
It is natural that as the theory becomes more developed, there is more expectation of empirical and experimental work to accompany it. This may seem like a constraint to those with an interest in pure theory but it will probably make them more productive scholars in the long run.
● At CERGE-EI, there is an active group working on the rational inattention theory and its applications. What is your opinion about possible applications of this theory in the game theory and mechanism design?
I am very excited about a current paper that I have about the cost of information and game theory. As it happens, I first presented a very early version of this work at a conference at CERGE-EI organized by Filip Matejka. It does have a message that one should be careful about using mutual information as a cost of information. But I think the existing rational inattention literature is very inspiring and the applications to game theory and mechanism design will be a leading topic in theory going forward.
● Where do you think your field of interest (e.g. incomplete information, game theory, mechanism design) will evolve in the near future? What challenges and problems need to be solved/are waiting ahead?
My talk hinted at one direction: relaxing (somewhat) implicit common knowledge assumptions in game theory and mechanism design; this has been a focus of my research but there are lots of open questions.
● Do you have some research problem that you have worked on, but which you have not yet managed to solve numerous times during your career, and that you are still hoping to solve one day?
I have often thought about trying to implement experiments related to my research on incomplete information. I keep hoping to come back to it but maybe I have not been persistent enough.
● What are the main imperfections in the organization of economics as a science that, in your opinion, should be changed? For instance, do you find the dominant position of the top five journals troubling?
I do think that the dominant position of the top five journals is troubling, in particular, because they have different distributions of topics and styles that are not necessarily optimal if they will be arbiters of research success.
● What advice would you a give to first year PhD students at CERGE-EI?
Study hard! Try to see how the ideas in your courses can help you understand phenomena outside the courses, i.e., relate the academic material to what you see about everyday economic decision making.
On behalf of all the readers of the CERGE-EI Blog, thank you very much for this interview.