Whatever a Noble prize does to winners or losers, it does benefit the public at large in one way. The prize spawns writings, which ease out the esoteric details of academic research and helps the public understand the finer details better. Hendrik Hertzberg beautifully notes in the New Yorker about the Peace Prize surprise:

Given that [Obama’s] perceived political problem is exaggerated expectations, does he really need a Nobel Peace Prize before he has actually made any peace? The award to Obama illustrates, among other things, the difference between the “hard” and the “soft” Nobels.

The prizes for physics, chemistry, and medicine are never given for trying, only for succeeding. Also, there is no apparent attempt to achieve regional, national, or ethnic balance. The same cannot be said of the literature prize, which frequently goes to authors who write in languages that few if any of the judges—eighteen grandees of the Swedish Academy—can read. Anyhow, literature is a matter of taste, which is why, among American writers, Pearl S. Buck was deemed worthy of the honor while Henry James was not.

Bang on. The literature prize, of late, has been mostly an eternal surprise. Hardly does one understand what the winner wrote—so much of literary notoriety.

Ok. Back to my point that Noble prize does open up the academic world inside out. Take the Economic Science laureate and the first woman winner, Elinor Ostrom. She is not a theoretical spin-doctor creating gawky mathematical models but a nice political scientist, who goes out into the field and does “real-world research.”

Washington Post puts it beautifully:

Ostrom has studied the "tragedy of the commons," the notion that if a town has a common pasture on which everyone can graze sheep, the land will be overgrazed, making it less useful for everyone. Ostrom found that in a wide range of such settings -- such as shared fisheries, forests and water supplies -- people form voluntary arrangements to govern use and prevent overharvesting. That applies, she has found, even in the absence of a powerful centralized authority.

That has deep implications for how to help poor countries develop. If an aid agency were to build an irrigation system in a distant location that must be shared by different communities, it may need to establish whether those communities have a history of cooperating to share scarce resources, rather than expecting such restrictions to be enacted by fiat.

And the other winner, Williamson too has studied how corporations function in the way they do and why don’t individuals work for themselves rather than for companies. This time, NYT pens it nicely:

Williamson’s work focuses on the boundaries of the firm, and the reasons for economic activity inside of firms: Why is there so much vertical integration in the marketplace? Why don’t we all just work for ourselves and sign contracts with each other instead of working together inside of a big company?

His work argues that “hierarchical organizations sometimes dominate markets because they provide a cheaper way to resolve conflicts,” the committee writes. When two employees quarrel about how best to use resources, a chain of command within the firm — usually leading back to a single chief executive — makes the decision about who is right. In contrast, in the markets, both parties would have to keep negotiating until they reach an agreement of some sort, which takes time and money.

Such a firm-based hierarchy is less necessary, however, if the two parties can easily achieve an enforceable contract, or find new trading partners