Who will win the 2026 Nobel Prize in economics?
asserted
Who → win → economics
And the winner of the 2026 Nobel Prize in economics is … we don't know yet.
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we → know → economics
That announcement is scheduled for Monday, and we'll be covering it here in the Planet Money newsletter and The Indicator podcast.
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we → schedule → newsletter
In the meantime, the week before the announcement is a great time to partake in a nerdy pastime: remembering all the amazing economics research that hasn't yet gotten a Swedish medal, and guessing who might get the world's most coveted wake-up call.
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who → partake → call
It's a mouthful, so we'll stick with "Nobel Prize in economics."
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we → stick → economics
Unlike the original Nobel Prizes, this one wasn't established by Alfred Nobel's will.
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one → establish → will
Sweden's central bank created it in 1968 — a history we'll explore in a forthcoming episode of The Indicator.
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we → create → Indicator
Many factors go into choosing a Nobel laureate.
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factors → go → laureate
Winners tend to be older, partly because the committee wants the passage of time to help them assess the candidates' impact on the field and/or broader world.
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them → tend → field
Sometimes the committee picks research that speaks to the zeitgeist.
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that → pick → zeitgeist
Other times it's because of very technical work that has given economists stronger empirical tools to study the world.
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that → give → world
So how might we make a guess?
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we → make → guess
Well, there's one tool that economists love for making predictions: markets.
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economists → be → predictions
Markets can aggregate the scattered information held by countless people, boiling down what they know about the world into a single number: a price — an idea famously articulated by economist Friedrich von Hayek, who, naturally, won a Nobel Prize back in 1974.
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who → aggregate → 1974
Those prices can sometimes offer clues about the future.
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prices → offer → future
Many economists view it as a kind of giant information-processing machine.
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economists → view → machine
In this view, a company's stock price reflects the crowd's beliefs about that company's future profits.
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price → reflect → profits
It can provide a kind of crystal ball.
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It → provide → ball
The same idea applies to prediction markets, which have really taken off in recent years.
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which → apply → years
Instead of betting on a company's future profits, traders bet on whether a particular event will happen — say, who will win a Nobel Prize.
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who → bet → Prize
And, wouldn't you know it, there's a prediction market for who will win the 2026 Nobel in economics.
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who → know → economics
There's just one problem: It's incredibly small, or as traders might call it, thin.
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traders → be → it
Maybe economists are too rational — or too busy — to bet on something this unpredictable?
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economists → bet → something
As of this writing Tuesday afternoon, Oct. 6, this prediction market for who will win the 2026 prize had recorded about $11,000 in trading volume.
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who → win → volume
For comparison, Kalshi's main market for the 2024 presidential election recorded about $670 million — tens of thousands of times as much.
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market → record → million
That prediction market correctly favored Donald Trump to win the election.
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market → favor → election
With such little trading, however, this Nobel prediction market seems less like the wisdom of crowds, and more like the guesstimates of a small number of nerdy gamblers.
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market → seem → gamblers
As we sat down to write this on Tuesday, Oct. 6, we watched, somewhat frustratingly, as the market swung wildly over who was favored to win based on what seemed to be relatively small new bets.
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what → sit → Tuesday
But let's give this prediction market the benefit of the doubt and call it a starting point.
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's → let → it
It at least provides an excuse to explore some big economic ideas and methods and the people behind them.
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It → provide → them
By late Tuesday afternoon, we decided to stop hitting refresh.
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we → decide → afternoon
Ariel Pakes and Susan Athey were trading places at the top of Kalshi's rankings, with Robert Barro rounding out the top three.
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Barro → trade → three
Ariel Pakes: What happens when competitors merge?
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competitors → happen → ?
Ariel Pakes is an economist at Harvard University who has made big contributions to an area of economics known as industrial organization.
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who → make → organization
It studies how industries are organized and how that structure affects competition and the prices and choices of consumers.
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structure → study → consumers
For example, how do prices and product offerings differ when a market is dominated by a single company versus many competing ones?
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market → differ → ones
In 1995, Pakes, together with Steven Berry and James Levinsohn, published a landmark paper about the American automobile industry.
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Pakes → publish → industry
The method they developed, known as BLP, helps economists figure out how consumers choose among competing products.
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consumers → develop → products
Those estimates can help simulate whether a proposed merger or acquisition will raise prices, and by how much.
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merger → help → much
The BLP model has evolved over time, and antitrust regulators use these tools to estimate how a proposed merger could affect consumers — giving them evidence to weigh when deciding whether to challenge a deal.
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merger → evolve → deal
…and 52 more, not listed.
The Aporia
