The University of Warwick gave Avinash Dixit an honorary degree at the graduation ceremony held on July 19, 2007. This citation was written by Mark Harrison, assisted by Peter Hammond, Norman Ireland, Marcus Miller, and Michael Waterson.
Avinash Dixit is one of the most distinguished members of the economics profession. Born in Bombay (now Mumbai), he was educated at St. Xavier’s College, Corpus Christi College (Cambridge) and the Massachusetts Institute of Technology. He was an assistant professor at the University of California, Berkeley, a fellow of Balliol College, Oxford, and professor at the University of Warwick, before going to Princeton in 1981. He is currently the Sherrerd University Professor of Economics at Princeton University. He is a Fellow and past President of the Econometric Society, a Fellow of the American Academy of Arts and Sciences, a Member of the National Academy of Sciences, and President-elect of the American Economic Association.
Dixit is an economic theorist, a calling that the outside world may sometimes perceive as austere, humourless, and even unimportant. It is a style of work at the mathematical end of the social sciences; in fact, maths was Avinash’s first calling. This style is one that many people find hard to grasp. You see an equation on a page: how can that be an adequate description of human behaviour? We know that e = mc2 is an equation that changed history, but that equation is one that describes the physical, not social world. One answer is that the mathematical insight often makes the difference between a rough idea of something that might or might not work out; and something that must be either true or false. Another is that, just as processes at the atomic level are simpler and stranger than would appear from the world we see around us, in the same way, the core of economic processes is both simpler and stranger than what is reported even in excellent papers like the Financial Times or Wall Street Journal. In economics, Avinash’s contributions have been of both types; in fact, he has changed several fields for ever, including Industrial Organization, International Trade, Public Economics and Political Economy.
In 1994 our new prime minister the right honourable Gordon Brown MP, then treasury spokesman for the Labour Party in opposition, made a speech in which he famously based his approach on what he called “post neo-classical endogenous growth theory.” In the merriment that followed it was generally assumed that only someone from another planet would understand what he was talking about. It would certainly have been understood by Avinash, whose much cited paper (with Joe Stiglitz) on monopolistic competition lies at the heart of many later papers on endogenous growth. Specifically, it creates a framework in which one form growth may take is increased product diversity. Another paper (with Victor Norman) led Avinash to make a fundamental contribution to our understanding of how to compensate the losers whose jobs are displaced by globalisation. A profound appreciation of strategic behaviour led Avinash to pioneering work on how businesses use their investments to deter competitors, and later to a book on Thinking Strategically (with Barry Nalebuff) that my first year students continue to use. More recently, Avinash has turned his attention to “failed states”: in a book on Lawlessness and Economics he asks how economies operate when there is no law, and when there is no clear line between entrepreneurship and criminality. Economic life does not become impossible but it must then rely on informal mechanisms and institutions. How do these work and what may they cost? These examples do no more than scratch at the surface of his prodigious output.
So, serious? Yes. And important. Austere or humourless? No. Avinash has written that his choice of topic is driven by a sense of fun: he does it, if he finds that he enjoys playing with it. For the mind to remain playful, a sense of freedom is required; inside his head he seeks to remain forever 23, with the lack of constraints and responsibilities that that implies.
Avinash’s links with Warwick stretch back over more than 30 years. He wrote several of his most influential papers while a professor here. We remember him sharing The Times crossword in the department common room – his eyes lighting up with pleasure when he saw the simple answer. The Summer Workshop that he organised in 1977 remains notable for his invitations to two future Nobel laureates, Joe Stiglitz and Michael Spence, together with a young man who went on to become perhaps the world's best known business guru, Michael Porter. More recently, he came back to serve as an external member of my department's strategic review panel; his willingness to cross an ocean and give up some days of his time for us speaks volumes for his devotion to service as well as to Warwick.
Mr Deputy Vice-Chancellor, in the name of the Council, I present to you for admission to the degree of Doctor of Laws, honoris causa, Avinash Dixit.