The Nobel Memorial Prize in Economic Science — technically not one of the original prizes — is also being scaled back.Should we worry about the incentive effects? Dale Mortensen says there's no problem:
At the time you’re doing your work you’re not exactly striving for the Nobel Prize, but to make a contribution, make your name, maybe make tenure. The Nobel is a great honor that comes much later in life. The money itself is a windfall. It probably wouldn’t matter what the amount is, although it’s nice to have.Actually, Peter Diamond tells us that the cash prize is the tip of the iceberg:
One of the things that comes with the prize, besides the prestige and the money, is the opportunities to make more money.Maybe Diamond should tell Mortensen about this.