Frederick Bereskin, assistant professor of finance,
spoke about the Sveriges Riksbank Prize in Economic Sciences in Memory
of Alfred Nobel, awarded to Eugene F. Fama, Lars Peter Hansen and Robert
J. Shiller "for their empirical analysis of asset prices."
The work of the three laureates "shows us how much we've learned
about asset prices and how many questions remain unresolved," Bereskin
said. Fama's work began in the 1960s, he said, and found that markets
are difficult to predict in the short term, a finding that has
popularized the formation of index funds and that has made the markets
more accessible to average investors.
Shiller found in the 1980s that prices fluctuate more than would be
expected in an efficient market, and he incorporated the role of
investors' optimism and pessimism in setting prices. Bereskin noted that
Shiller has credited his wife — Elizabeth M. Shiller, who earned her
doctorate in clinical psychology at UD in 1984 — with exposing him to
the idea that psychology might play a role in investors' behavior.
The third laureate, Hansen, developed a highly influential statistical model for testing theories of asset prices.