I had a conversation the other day with someone whose dream is to win the Nobel Prize one day.
What is the Nobel Prize?
It's the most distinguish award a person can win. There are 6 different prizes awarded annually for outstanding work in Physics, Chemistry, Medicine, Literature, Economics and Promotion of Peace. Every year, thousands of members of academies, university professors, scientists and previous Nobel Laureates are asked to submit candidates for the Nobel Prizes for the coming year.
Between 1901 and 2016, the Nobel Prizes were awarded 579 times. The youngest Laureate is Malala Yousafzai (Peace 2014) at the age of 17 and the oldest Laureate is Willard Boyle (Physics 2009) at the age of 85.
Two weeks ago, the 2016 Nobel Prize winners were announced for Chemistry, Physics, Economics, Medicine, Literature and Peace.
Awarded to Jean-Pierre Sauvage (1/3), Sir J. Fraser Stoddart (1/3) and Bernard Feringa (1/3)
All three of them was awarded for their design and synthesis of molecular machines.
In 1983, Sauvage succeeded in linking two ring-shaped molecules together to form a chain (known as catenane). The diagram below illustrates how he constructed two connected rings using a copper ion.
His discovery is the very first step towards creating a molecular machine.
Sir J. Fraser Stoddart
In 1991, Stoddart developed a rotaxane. He built an electron poor open ring to thread through a thin molecular axle with electron rich structures. The electron poor ring was attracted to the molecular axle with electron rich structures and thus closed the ring. When heat is applied, the ring jumped between the electron rich areas of the axle. The diagram below illustrates the process.
His discovery has led to the development of a molecular lift, a molecular muscle and a molecule-based computer chip.
In 1999, he was the first person ever to develop a molecular motor which could continually spin in the same direction.
The molecules in the molecular motor are like rotor blades. When molecules are exposed to UV light, one rotor blade remains at the same spot while the other snaps back and forth in the same direction. The rotation is aided by a methyl group. The process is illustrated in the diagram below.
Using molecular motors, he has rotated a glass cylinder that is 10,000 times bigger than the motor. In addition, Feringa also constructed a nanomolecular car.
The discovery of molecular machines has led to the development of new materials, sensors and energy storage systems.
Awarded to David Thouless (1/2), Duncan Haldane (1/4) and Michael Kosterlitz (1/4)
All three of them use a branch of Mathematics called topology to study unusual states and phases of matter such as superconductors, superfluids and thin magnetic films. Topology is a branch of Mathematics which describes properties that only change step-wise. Using topology, they discovered that superconductivity could occur at low temperatures and disappear at higher temperatures.
Imagine a bun, a bagel and a pretzel, each has zero, one and two holes respectively. The number of holes is considered a topological pattern. In other words, to a topologist, both the donut and a bagel have one hole in them, they will be considered having the same 'topological invariant' of one hole.
Ordinary believed that thermal changes destroy all order in matter in a 2D world and atoms have no phase transitions at these extremes.
Discovery of states of matter using topology
The topological phase transition is unlike an ordinary phase transition like that between ice and water. It is dependent on small vortices in the flat material. At low temperatures, they form tight pairs, at high temperatures, the vortexes move away from each other.
Thouless uses topology to explain the quantum Hall effect that describes discrete steps of electrical conductance when the magnetic field or temperature changes. Electrons move freely between semiconductors in a layer called topological quantum fluid. This fluid can form thin semiconductor layers even without a magnetic field.
We now know that the different topological states of matter are not only present in 1D or 2D materials, but also in 3D materials. Examples are topological insulators, topological superconductors and topological metals. The discovery will further lead to a new generation of electronics, superconductors and quantum computers.
Awarded to Oliver Hart (1/2) and Bengt Holmstrom (1/2)
Both men have contributed to the understanding of contracts and institutions and pitfalls in contract design. Our society is governed by contractual relationships, which allows for regulation of actions, cooperations, trust and risk sharing. Contracts play a crucial role in the operation of modern businesses and economy.
Holmstrom's Work on Complete contracts
Holmstrom's work focused on the complicated contracting relationships between shareholders/ owners, managers and employees.
Most companies face the issue of shareholders not being able to directly monitor the CEO of the company. Usually, the CEO want to increase their pay-off based on short term goals instead of long term goals.
Holmstrom suggested that performance-based pay should be linked to measures of performance to encourage people to give their best. If the CEO is compensated based on market value of shares, the CEO will become more incentivized to make decisions which will increase the market value of shares in the long run.
- Career Concern Model
Holmstrom analyzed that young employees are usually more motivated than the senior employees due to the concern about career and future salary raises. In such cases, performance must be linked to higher future earnings.
- Multi-tasking Model
Workers are usually assigned to multiple tasks. If the pay is linked to one particular task, the worker has the incentive to focus on that one task alone. Holmstrom suggested that companies which have multiple tasks related to a single job position should offer fixed salaries rather than salary based on performance.
This is where the free-rider problem comes in. Some individuals might work harder, some might work less. Holmstrom showed that the problem can be resolved by having an outside owner provide incentives based on individual's performance and keep the remaining profit with himself.
Hart's Work on Incomplete contracts
In the business world, it is almost impossible to detail contracts in advanced to account for every possible future situation. Hart showed the importance of laying out who gets to make what decisions in the case of future contingencies.
In Hart's words: "Ownership of an asset goes together with the possession of residual rights of control over the asset; the owner has the right to use the asset in any way not inconsistent with a prior contract, custom or any law."
Assets should be owned by the party whose investment will be the most for the business. This will give the party the incentive to invest in the business.
Hart also mentioned why public prisons are better than private prisons. Both owners of the prisons do care about the profit, but the incentive to cut costs is greater in private prisons due to the fact that the private owners get all the profits directly into his pocket.
Financial and Venture
In the business world, profits are often difficult to contract on. In the entrepreneurial space, Hart suggested that entrepreneurs should have the right to make decisions as long as the firm's performance is good. Investors are promised a fixed stream of payment out of profits. However, if the firm is doing badly, investors should have more power - decisions to either liquidate or restructure the company.
Holmstrom's work is more based on coming up with better models to better influence the decision making of human beings in real life whereas Hart's work is based on improving the model to better represent the decisions human beings already make today.
Awarded to Bob Dylan, a musician who has created new and unique expressions and phrasings in his songs.
Awarded to Yoshinori Ohsumi from Japan for his discovery of autophagy. The word autophagy originates from the Greek words auto-, meaning 'self' and phagein, meaning 'to eat'. In our body, cells destroy its own contents by enclosing them in sack-like vesicles that are transported to the lysosome.
Ohsumi found that the degradation mechanism for baker's yeast is similar to the mechanism used in our cells. He introduced yeast cells to a chemical that introduced mutations to induce autophagy. His research led to a new paradigm in our understanding of the importance of autophagy in many physiological processes such as adaptation to starvation, response to stress and response to infection.
Awarded to Juan Manuel Santos, current Colombian president (since 2010)
He was awarded for his efforts in reconciliation with FARC guerrillas, putting an end to the country's more than 50-year-long civil war. President Santos negotiated an agreement and made peace with the FARC leader, Rodrigo Londono in August 2016. The agreement aimed to provide FARC seats in the parliament and pardons for their crimes.
However, a majority of Colombians cast their ballots voting 'No' to the peace agreement. This does not mean that the vote was for against peace but for a specific peace agreement - the pardons for their crimes. President Santos vowed to continue his work on advancing the peace process until the very last day in office. He welcomed all parties to participate in an open national dialogue.
The Nobel Committee awarded the Peace Prize to President Santos to encourage everyone who is striving to achieve peace.