Mortensen, Dale Thomas (1939-2014), an American economist, won the 2010 Nobel Prize in economic sciences. He shared the award with the American economist Peter A. Diamond and the Cypriot-born British economist Christopher A. Pissarides. They received the award for their work in markets with search friction. A market is a setting in which people trade goods, services, or resources. Markets with search friction are complex ones in which it is especially difficult to match buyers and sellers.
A labor market is a type of market with search friction. Search friction in such markets can be created by mismatches between workers’ skills and the skills businesses need or such policies as unemployment insurance. Traditional economic theory of supply and demand would predict that in a time of high unemployment, if an economy also had a large number of job openings, wages for workers would drop until companies began to hire and the open jobs were filled. The friction in a labor market, however, can keep people unemployed even when firms are looking for workers.
The work of Mortensen, Diamond, and Pissarides studied why more complex markets do not behave according to traditional theories. They created a mathematical model—the Diamond-Mortensen-Pissarides (DMP) model—to study these complex markets. The DMP model is used to study housing, labor, and other markets in which buyers and sellers cannot be easily matched.
Mortensen was born Feb. 2, 1939, in Enterprise, Oregon. He received a bachelor’s degree in economics from Willamette University in Salem, Oregon, in 1961. He received a doctor’s degree in economics from Carnegie Mellon University in 1967. Before he received his doctorate, Mortensen began teaching economics at Northwestern University in Evanston, Illinois, in 1965. Mortensen died on Jan. 9, 2014.
