George Akerlof

George Akerlof received the 2001 Nobel Prize in Economics (shared with Michael Spence and Joseph Stiglitz) for his analysis of markets with asymmetric information. His 1970 paper "The Market for Lemons" used the used car market as a model to show how information asymmetry between buyers and sellers can cause market breakdown — with sellers knowing more than buyers about product quality. This paper became one of the most cited in economics and provided the theoretical foundation for understanding adverse selection in insurance, credit markets, and financial intermediation. Akerlof is married to Janet Yellen. His later work, including the book "Animal Spirits" co-authored with Robert Shiller, applied behavioral and psychological concepts to macroeconomics — arguing that confidence, fairness, and narratives matter enormously for understanding economic fluctuations beyond what standard rational-agent models can explain.