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| 3 American Professors Awarded Nobel in Economic Science | 3 American Professors Awarded Nobel in Economic Science |
| (35 minutes later) | |
| WASHINGTON — Three American professors — Eugene F. Fama, Lars Peter Hansen and Robert J. Shiller — were awarded the Nobel Memorial Prize in Economic Science on Monday for showing that stock prices, while unpredictable in the short term, tend to follow established rules in the long term. | WASHINGTON — Three American professors — Eugene F. Fama, Lars Peter Hansen and Robert J. Shiller — were awarded the Nobel Memorial Prize in Economic Science on Monday for showing that stock prices, while unpredictable in the short term, tend to follow established rules in the long term. |
| Their findings have influenced the way many people invest, encouraging the rise of index funds that buy broad baskets of equities and other assets. At the same time, sophisticated investors have sought to profit from the evidence of long-range patterns. | |
| Their work, done individually rather than in cooperation, “laid the foundation for the current understanding of asset prices,” according to a statement from the Royal Swedish Academy of Sciences, which awards the annual prize. | Their work, done individually rather than in cooperation, “laid the foundation for the current understanding of asset prices,” according to a statement from the Royal Swedish Academy of Sciences, which awards the annual prize. |
| Mr. Fama and Mr. Hansen are professors at the University of Chicago; Mr. Shiller is a professor at Yale University. | Mr. Fama and Mr. Hansen are professors at the University of Chicago; Mr. Shiller is a professor at Yale University. |
| Mr. Fama, 74, was honored for showing that asset prices are “extremely hard to predict over short horizons.” | Mr. Fama, 74, was honored for showing that asset prices are “extremely hard to predict over short horizons.” |
| Mr. Shiller, 67, found that prices show greater predictability over the longer term. He determined that stock prices were more volatile than corporate dividends, but that the ratio of prices to dividends tended to correct when it was too high or too low. | |
| Mr. Hansen, 60, was honored for developing a statistical method for testing and refining theories about the movement of asset prices. | Mr. Hansen, 60, was honored for developing a statistical method for testing and refining theories about the movement of asset prices. |
| Mr. Shiller, reached by phone during the news conference announcing the award, described his reaction to the news. | |
| “Disbelief,” he said. “That’s the only way to put it.” | “Disbelief,” he said. “That’s the only way to put it.” |