Tuck School of Business finance professor Kenneth French is a top contender for the Nobel Prize in economics, according to British betting firm Ladbrokes. The winner of the prize will be announced on Monday.
French, in an interview with The Dartmouth, said that, although "flattered," he does not believe he has any actual chance of winning the prize.
Ladbrokes, the world's largest bookmaker, placed French in a three-way tie for the prize, with six-to-one odds of winning. A long-running Harvard University pool does not list French as a front-runner.
Ladbrokes considers Eugene Fama, with whom French has frequently collaborated, the favorite for the prize, according to the Wall Street Journal. Many think of Fama, a professor at the University of Chicago Booth School of Business, as the "father of modern finance" because of his development of the efficient market theory. The theory states that markets reflect all information available to investors.
French said he would pick Fama as the winner if the decision were up to him.
"My coauthor Gene Fama would be a great candidate for the prize," he said. "When people mention me, I'm flattered, but I realize it's not possible."
French said his research with Fama, much of which was completed in the early 1990s, focuses on expected returns on stock.
"The stuff that people pay attention to is related to trying to explain a cross section of stock returns," he said. "We built this empirical model that does a pretty good job of capturing differences in expected returns on stocks."
French's colleagues maintain that he is one of the best in his field, although they declined to comment on his chances of winning.
"I don't think there's anybody who understands risk and return in capital market better than Ken French does," Tuck senior associate Dean Robert Hansen said.
Tuck finance professor B. Espen Eckbo described French's research as "very visible" and "very useful for investment planners."
"We're hoping for the best," Eckbo said.
Several of French's colleagues, however, said that the current economic situation hurts French's chances of winning.
"Miracles do happen, but with what finance has done to the world this year, I would be shocked if they gave it to finance," Tuck finance professor Rafael LaPorta said.
The Nobel Prize in economics generally favors those who work in macroeconomics, or "models for the whole economy," Eckbo said.
Still, French's colleagues and collaborators commended his knowledge and research.
"One of the reasons he is usually mentioned as one of the favorites is because he's done a lot of work with Gene Fama, and they've tackled a lot of the really important questions in financial economics," Dimensional Fund Advisors vice president Jim Davis, who has worked with French, said. "They have a way of asking the right question and setting up a research design that gets a valid answer to that question."
The prize has been awarded since 1969. The winner receives a 10 million crown award, equal to about $1.4 million.
