Americans Eugene Fama, 74, and Lars Peter Hansen, 60, of the University of Chicago; and Robert Shiller, 67, of Yale University. FOR WHAT? All three studied the movement of prices of assets — things like stocks, bonds and housing — but they came at it from different angles. Fama found that it is hard to predict whether prices will move up or down over the short run, but two decades later Shiller concluded that it was possible to make such predictions over periods of three years or more. Hansen developed a statistical method to test theories of asset pricing.
SIGNIFICANCE? Fama's work suggested that it is impossible for individuals to beat the markets. It revolutionized investing, leading to the rise in index funds. Shiller showed that things weren't so neat and that people's behavior and inefficiencies in the market made things more complicated. Hansen came up with the statistical tools to help further the debate.