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　　Professor A. Michael Spence is a senior fellow at the Hoover Institution and Philip H. Knight Professor Emeritus of Management in the Graduate School of Business at Stanford University. In 1966, he earned a B.A. in philosophy at Princeton University, summa cum laude and was selected for a Rhodes Scholarship. He was awarded a B.A.- M.A. in mathematics from Oxford University in 1968 and earned his Ph.D. in economics at Harvard University in 1972. His Ph.D. dissertation was awarded the David A. Wells Prize for outstanding doctoral dissertation from Harvard.

　　Professor Spence first taught at Stanford as an associate professor of economics from 1973 to 1975. In 1975, he became professor of economics and business administration at Harvard. He was awarded the John Kenneth Galbraith Prize for excellence in teaching and the John Bates Clark Medal (the most prestigious prize awarded every other year to a young economist under the age of 40) for his "significant contribution to economic thought and knowledge." Professor Spence served as the Dean of the Faculty of Arts and Sciences at Harvard from 1984 to 1990, overseeing Harvard College, the Graduate School of Arts and Sciences, and the Division of Continuing Education. From 1990 to 1999, he served as Dean of the Stanford Business School. He is a fellow of the American Academy of Arts and Sciences and of the Econometric Society.

　　Professor Spence shared the Nobel Prize in Economic Sciences in 2001 with Professor George Akerlof of University of California at Berkeley and Professor Joseph Stiglitz of Columbia University for their contribution to the analyses of markets with asymmetric information.

Professor Spence at the Nobel Prize Presentation Ceremony.

　　Asymmetric information occurs in daily life. For instance, borrowers know more about their repayment prospects than lenders, managers and boards know more about the firm's profitability than shareholders, and clients know more about their accident risk than insurance companies.

　　Professor Spence's main contribution is on labor market asymmetry. He suggests that in a world where employers do not know the productivity of individual workers, paying an average wage will not maximize the firm's profit. To maximize profit, a firm can pay different wages to workers with different signals. He suggests that education can be used as a signal. Under the assumption that a more capable person has a lower cost of education, a productive individual will acquire more education as a signal of his productivity and gets a higher pay, and vice versa.

　　Professor Spence's result does not rely on the conventional belief that education increases the productivity of a worker. His model has found applications in many fields. An important application is in corporate governance.