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" The market is no god - it cannot solve every problem. "

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" I probably learned most at MIT by teaching and working with Peter Diamond, who acted like a big brother to me during my time in the department. "

" Devising a mechanism is a lot like solving a puzzle - and gives you the same kind of kick. "

" Most policy makers embrace a religious-like belief that the market can and should solve every problem. "

" Because mechanism designers do not generally know which outcomes are optimal in advance, they have to proceed more indirectly than simply prescribing outcomes by fiat; in particular, the mechanisms designed must generate the information needed as they are executed. "

" I'm not a housing market expert, and I don't want to pretend to be one. "

" Prediction is certainly a valuable goal in science, but not the only one. Explanation is also important, and there are plenty of sciences that do a lot of explaining and not much predicting. "

" If I buy a car, I use the car, you don't, and the market for cars works pretty well. But there are many other sorts of goods, often very important goods, which are not provided well through the market. Often, these go under the heading of public goods. "

" In an industry with highly sequential innovation, it may be better for society to scrap patents altogether than try to tighten them. "

" The market doesn't work very well when it comes to public goods. "

" How do we ensure in the case of public goods that they are provided at all, and that they are provided at the right level, taking into account citizens' preferences? "

" In various countries around the world, assets that had previously been in the hands of governments were sold off to the private sector in the hope that this would lead to a more efficient allocation, that these assets would be put to better use. "

" I have a strong attachment to Harvard. "

" Many markets work best with little or no outside interference. But others - especially those subject to big 'externalities' - need a helping hand. "

" If budget planning requires gathering information from people who may not always have the incentive to disclose that information, then the principles of mechanism design can definitely be of use in such planning. "

" There are some things that we value as a public good that the markets can't deliver, like clean air. "

" If I'm a bank, and I'm making risky loans, I have an incentive, if I can, to make those loans using other people's money: in other words, to make highly leveraged loans. "

" Specifically, in the software industry, progress is highly sequential: progress is typically made through a large number of small steps, each building on the previous ones. "

" It wasn't that Harvard was deliberately trying to overwork me, but I think I had a tendency to take on more things out of enthusiasm than were good for me. "

" I entered economics because of a course I took on 'information economics,' which I found fascinating. "

" I choose questions to work on according to how much they excite me. "

" The Nobel Prize is not very important for the winners - they are usually pretty successful people already. But it is valuable as a way of drawing the public's attention to important work in economics. "

" A properly designed tax system can strike a balance between helping the poor and, at the same time, giving people the incentive to work. "

" Economic forecasting has actually got pretty good over the years, though admittedly, we don't always get it right. "

" A contingent bailout policy - implicit or explicit - must be coupled with some regulation of what banks can and cannot do. For example, a ban on lending to uncreditworthy customers might well make sense. "

" Leo Hurwicz is the father of mechanism design theory and has inspired much of my work, and Roger Myerson is an old friend and collaborator and a tremendous economist. "

" What we mean by an outcome will naturally depend on the context. Thus, for a government charged with delivering public goods, an outcome will consist of the quantities provided of such goods as intercity highways, national defense and security, environmental protection, and public education together with the arrangements by which they are financed. "

" Perhaps one day earthquakes, hurricanes and financial crashes will all be predictable. But we don't have to wait until then for seismology, meteorology and economics to become sciences; they already are. "

" Much theoretical work, of course, focuses on existing economic institutions. The theorist wants to explain or forecast the economic or social outcomes that these institutions generate. "

" There is universal consensus among experts that the earth's atmosphere is heating up - and that we are responsible for it by putting carbon dioxide in the atmosphere. We also know that the consequences of global warming are catastrophic. But how do we make sure that all countries reduce greenhouse gases? "

" When a bank calls in a loan, it obviously hurts the customer in question. But it also adversely affects other banks that have lent to this borrower. They are now less likely to be repaid and so can't as readily lend to their own customers. "