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Faculty of Economics

Professor Ariel Rubinstein was invited to give the Marshall Lecture for 2022, the first such lecture in three years. These Lectures are one of the premier academic events held at the Faculty of Economics, and Professor Rubinstein brought insights into Game Theory, Experimental Economics and Choice Theory. He spoke to Julian Lorkin.

 

Professor Ariel Rubinstein

“Although I have spent so much of my time on game theory, I want to do something that is not exactly within the tradition of these stories. And I want to encourage others to do things that are not in line with established theory,” says Ariel Rubinstein, who is a professor of economics at the School of Economics at Tel Aviv University and the Department of Economics at New York University.

His 1982 article Perfect Equilibrium in a Bargaining Model is one of the most fundamental works in the field of bargaining and renegotiation. Indeed so much so, the model is now known as the ‘Rubinstein Bargaining Model’. However, he says he hadn’t closely examined his early work for many years, until he was invited to give the lectures.

“You know, I actually forgot all about it until recently. But looking at it now, I'm very proud that in 1982, I got this approach,” he says.

His 1989 article The Electronic Mail Game: Strategic Behavior Under “Almost Common Knowledge” famously indicated that, in order to benefit the most from coordination, people need to be able to talk to each other in person rather than just exchange emails.

“The email game was actually just a catchy title for something which is more within the course of economic theory. And this is part of what the Marshall Lectures will be about,” he says. “I want to do something which is in some sense not exactly in line with the fashion of economic theory, which is to present models, which are not game theory.”

His 1990 book, co-authored with Martin J Osborne, Bargaining and Markets (Academic Press) is an excellent entry point for any scholar interested in bargaining. He co-authored, with Martin Osborne, a book A course in game theory (MIT Press), which is one of the most widely read books in game theory in the world.

“The view that I take in this book and which I will express in the Marshall Lectures, is that economic theory is not a science it's a sort of provocative statement. I would say it's ‘more close’ (SIC) to literature, namely, it's a collection of stories,” he says, expanding further in the lecture that although some economic theory has a direct connection to people’s experience, some does not directly assist people to bargain or change the economy. “It's a collection of attempts to understand a little bit better some concepts, but all of those are not relevant in the concrete sense that people are probably expecting economics in particular to assist.”

His 1998 book Modelling Bounded Rationality (MIT Press) discusses issues of bounded memory and complexity of games, and connects them to findings in psychology. Respectively, his 2012 paper, co-authored with Jacob Glazer, A Model of Persuasion with Boundedly Rational Agents considers a practical application of bounded rationality. “In effect it is a work about how to convince people to believe in your story, with the minimum amount of lies? Now, it's not a popular book, but it's a book that in principle, people who are, let's say academics and students, can definitely can get a win from.”

Game Theory Chalk Board

His 2000 book Economics and Language (Cambridge University Press) provides a connection between formal language of economic theory and the language that people use in everyday life. He says that while writing this he also did a lot of game theory, “but I do not see it as anything other than a collection of models, and there are many stories, and many of them are more different.”

Professor Rubinstein has been to Cambridge many times before, giving previous lectures, which he has really enjoyed. However, he says there is one other reason why he loves returning to the city in the Fens. “It’s a delight to come back. And it means I can also indulge in my little hobby.”

He has a website reviewing, cafes he enjoys, and indeed where he has spent much time researching many of his papers. “I love a good café. Actually, one of my purposes in life is to update my atlas of cafes, where ‘one can think’.”

The comprehensive global Rubinstein's Atlas of Cafes is available online: https://cafeatlas.org/

However, he warns that some of his theory may not be for everyone, because people have to understand some parts of the theory before they starting reading it. “Just as an example of the problems of language: say, you cannot read a Hebrew book in Hebrew, unless, you know, Hebrew. And in the same way, you cannot read economic theory, unless you know the language of economic theory and very few people know that. Now, that's a problem.”

He does reveal in the lectures as well, that some of his research may be very theoretical, which he enjoys. “If I'm proud about something in this profession, it is mainly the fact that, that I did not ever pretend to be useful. Even if you look at my paper from 1982. It was called a model of bargaining, not how to bargain. That’s the difference. It’s a book of theory.”

In his two lectures at the Babbage Lecture Theatre on the New Museums Site, Professor Rubinstein spoke about ‘Economics without prices and without games’.

 

Marshall Lecture Day 1

 

Marshall Lecture Day 2

 

Prior to the lectures, Professor Ariel Rubinstein discussed his Marshall Lectures with Alastair Langtry, a PhD economics researcher at the University of Cambridge.

 

 

The Alfred Marshall Lectureship was established at the Faculty of Economics in 1932 in memory of Alfred Marshall, arguably the founder of modern economic science and undisputedly one of its pioneers. The establishment of these lectures institutionalised an earlier practice of inviting a distinguished economist, generally from outside Cambridge, to give a number of lectures during Full Term. The Marshall Lectures have twin aims – first, to present and to elucidate research developments in Economics to a wide audience; while at the same time to educate and to inspire students to study Economics in all its facets.

These Lectures are one of the premier academic events held at the Faculty of Economics. They are attended by students, faculty, and are also open to scholars across the University and to the general public. The Lectures are given in Full Term. It is expected that the Lecturer will give two lectures and will also deposit a copy of the text of the lectures in the Marshall Library.

The Marshall Lectures celebrate research in Economics and cognate disciplines, and those who have brought the spirit of enquiry to their field and in so doing have also distinguished themselves. Equally, it is expected that these Lectures will contribute to the academic training that is provided to Cambridge students. For this reason, the lectures are required to be accessible and intelligible both to scholars in the subject and to young students in the field. The Lecturer can assume that the audience has some reasonable understanding of the subject of Economics, but not the technical background that would be taken for granted when presenting a research seminar.

Over the years, these lectures have been delivered by some of the pre-eminent economists and social scientists of their generation. It is hoped that this will continue for many years to come. Ultimately, the objective of these Lectures is to attain Alfred Marshall’s own vision for economics education in Cambridge, and as articulated in his words, ‘to increase the number of those, whom Cambridge sends out into the world with cool heads but warm hearts, to discover how far it is possible to open up to all the material means of a refined and noble life’.

The Marshall Lecturers, with the subjects that they have lectured upon, are listed on the past lectures page.

https://www.econ.cam.ac.uk/Marshall_Lecture/ML-past-lectures.html

 

Short biography of Ariel Rubinstein

Ariel Rubinstein is a Professor of Economics in School of Economics at Tel Aviv University, and a Professor of Economics in New York University. He received his B.Sc. in Mathematics, Economics and Statistics from the Hebrew University in 1974 and his Ph.D. in Economics from the Hebrew University in 1979. He has written on economic theory, bounded rationality, game theory, experimental economics and choice theory.

His 1982 article Perfect Equilibrium in a Bargaining Model is one of the most fundamental works in the field of bargaining and renegotiation and the model is now known as Rubinstein Bargaining Model. His 1990 book, co-authored with Martin J Osborne, Bargaining and Markets (Academic Press) is an excellent entry point for any scholar interested in bargaining. He co-authored, with Martin J Osborne, a book A course in game theory , (MIT Press), which is one of the most popular books in game theory in the world. His 1989 article The Electronic Mail Game: Strategic Behavior Under ``Almost Common Knowledge’’ famously demonstrates that, in order to benefit the most from coordination, people need to be able to talk to each other in person rather than just exchange emails. His 1998 book Modelling Bounded Rationality (MIT Press) discusses issues of bounded memory and complexity of games, and connects them to findings in psychology. Respectively, his 2012 paper, co-authored with Jacob Glazer, A Model of Persuasion with Boundedly Rational Agents considers a practical application of bounded rationality: How to convince people to believe in your story, with the minimum amount of lies? His 2000 book Economics and Language (Cambridge University Press) provides an interesting connection between formal language of economic theory and the language that people use in the real life.

Ariel is not a typical economist. Firstly, he provides his books for free on his website. Secondly, he writes very short but complete and thought-provoking research papers. Third, he makes it interesting for students to learn economics by discussing relevant real life stories, in his books Lecture Notes in Microeconomic Theory: The Economic Agent (Princeton University Press 2005, 2012), and, co-authored with Martin J Osborne, Models of Microeconomic Theory (2020).

Ariel has received a number of awards, and was elected as a fellow to a number of societies. While the full list is available on his website, here is a sample. He was elected a member of the Israel Academy of Sciences and Humanities (1995), a Foreign Honorary Member of the American Academy of Arts and Sciences (1994) and the American Economic Association (1995). In 1985 he was elected a fellow of the Econometric Society and served as its president in 2004. He was elected as an Economic Theory Fellow in 2011, and a Fellow of Game Theory Society in 2017.

Ariel has received the Bruno Prize (2000), the Israel prize for economics (2002), the Nemmers Prize in Economics (2004), the EMET prize (2006), and the Rothschild Prize (2010).

Mikhail Safronov

 

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