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Economic Principals: A Bitter Battle Illuminates an

Esoteric World

By David Warsh, 05/05/96 Mathematical economics -

"math econ" to its happy few - is a branch of economics
wherein an international community of very bright people
work to combine economic theory with mathematical forms,
creating conceptual tools with which economists speak about
the social world. Does thinking hard about infinite dimensional
vector space constitute a useful art? The $30 trillion
international risk markets were built on it, albeit by other,
more problem-oriented finance economists.Today, the
hottest-selling new treatise on US tax policy, among experts
at least, is a book published by a law firm containing 80 pages
of equations and little more.

For a couple of years, this rarified world of math econ has
buzzed with talk of a legal battle between two of the three top
women in the field. It is a field whose upper reaches are
famously inhospitable to females, where any woman capable
of speaking the abstract language is thought to be remarkable
for an ability to ``run with the boys.'' (The reasons why this
should be the case are far from clear. Do biological factors
limit the ability of women to do the hardest math? Or
cultural?)

Graciela Chichilnisky, professor of economics at Columbia
University, in the summer of 1994 sued Myrna Wooders,
professor of economics at the University of Toronto, and
Frank Page, professor of finance at the University of Alabama,
charging them with stealing her ideas. A year later, Page and
Wooders countersued, alleging slander and asking $35million
in punitive and actual damages.

Since then, publication of scientific papers has been blocked,
reputations damaged and enormous quantities of time and
money spent on the issue of who deserves credit for some
work that is distinctly small-time stuff, at least according to
most experts. "There are lots of interesting issues in
economics, but the work that this is about is not one of them,"
says Oliver Hart of Harvard University.

A flare-up between rivalrous women near the top of a difficult
profession, then? No, it is something quite different from that
Late last month, Chichilnisky abandoned her complaint and
Page and Wooders withdrew their countersuit, amid mounting
suspicion in the field that the Columbia professor fabricated at
least some of the documents on which the case is based -
indeed, that she herself may have been the thief of ideas. (She
has been accused of backdating documents at least once
before). Caught in the backdraft is Nobel laureate Kenneth
Arrow, Chichilnisky's one-time sponsor and one of the top
figures in all of economics, who tried and failed to resolve the
dispute.

With the lawsuits withdrawn, restraints on talk have been
eased, and the profession is in the early stages of making sense
of the case. Only tentative and sometimes competing
constructions are possible at this point.

Scientific scandal is always interesting, because science is
probably the best ethical system human beings yet have been
able to devise: Imperfections in it often mirror the
opportunities for mischief in everyday life and offer a
magnifying lens with which to observe them. At least to a
certain kind of person, the allegations directed at AIDS
pioneer Robert Gallo are as interesting and significant as the
charges leveled against O.J. Simpson.

This case is especially revealing. It casts light on the power of
the old against the young; on the tension between departments
in famous universities and those in the less well-known; on the
relations between professional men and women; on the
stresses that have been tearing at Columbia University,
formerly one of the best in the nation, now struggling to
regain its prominence. Above all, the incident illustrates the
harm that flows when the law intrudes into science.

The story begins in Boston, in January 1994, in a stuffy hotel
conference room. What happened there is still hotly disputed
by eyewitnesses. Chichilnisky says that she presented a
mathematical argument for ``necessary and sufficient
conditions on the nonemptiness of the core'' - the core being
the states of an economy upon which no group of agents can
``improve.''

Nicolas Yannelis of the University of Illinois has said she did;
Lin Zhou of the Cowles Foundation has said she didn't. The
various parties can't agree on what handouts or papers were
offered (if any), or on what transparencies were used. (There
are allegations that Chichilnisky created and backdated a
second set of transparencies, and a paper as well.) What isn't
disputed is that a couple of days before the Boston meeting,
Chichilnisky sent to Economics Letters a paper in which there
was no mention of the "core" - while Wooders and Page sent
off a paper of their own substantially devoted to it a week
earlier.

The scene moves to Quebec City, to the North American
Meetings of the Econometric Society in June. Chichilnisky
disrupted a session in which Page and Wooders were
speaking, repeatedly interrupting to claim that their work was
her own. "Page and Wooders were a class act,":'
remembers one neutral observer who attented the session.
"They were simply trying to present a scientific paper." After
the presentation, Chichilnisky is said to have approached
Wooders as if to hit her - until a phalanx formed to protect
the Canadian. By the meeting of the Social Choice and
Welfare Society's in Rochester in mid-July, the affair had
moved well beyond shouting. Moments before Page and
Wooders were scheduled to present a paper to a meeting,
Chichilnisky's agents served them with notice of a suit
(another collaborator and a journal publisher were also
named). "I felt as though a gun had been put to my head,"
recalls Page. "I went home and a lawyer friend told me I
should be ready to declare bankruptcy to protect my house."'
Chichilnisky states, "Litigation was my last resort, and I tried
everything before I went that road.''

The three economists came to Rochester along very different
paths.

Chichilnisky, born in Argentina in 1946, came to the United
States in 1968. She received not one but two PhDs from the
University of California at Berkeley - one in mathematics in
1971, the other in economics in 1976. After four years at
Harvard, a couple more going back and forth between the
University of Essex in England and Morningside Heights in
New York City, she became a professor at Columbia in 1981.
She has been unusually prolific: Her vita lists five books and
nearly 150 articles. "She's deep, broad and imaginative," says
Stanford's Paul Millgrom. "There's not enough of that in
economics."

In partnership with Geoffrey Heal, another economist at
Columbia, Chichilnisky had a child and started a company,
according to the accounts of colleagues. The firm used
various options-pricing techniques to take advantage of
arbitrage opportunities in interest rate futures; Chichilnisky
and Heal are thought to have received something between
$10 million and $20 million when it was sold. They live in
old-world splendor in a townhouse on Riverside Drive.

Wooders, who declines to give her age, was born on a small
farm in Alberta, Canada, and came to economics somewhat
late - as a divorced mother of two small children. After
receiving her PHD from the University of Minnesota in 1976,
she taught at the State University of New York at Stony
Brook, then moved to the University of Toronto.
She stayed close to the frontiers of her field, knitting together
aspects of general equilibrium theory and game theory. Unlike
Chichilnisky, Wooders (and Page) has made no great claims
for the particular work that has been the subject of the
lawsuit. Wooders is as precise and modest as Chichilnisky is
mercurial and flamboyant.

Page, 47, is a Texas native who earned his PhD in economics
at the University of Illinois in 1980, after working extensively
with mathematicians. A bluff, plainspoken man of volcanic
enthusiasm, he once boasted to a judge who expressed
bewilderment at the mathematics that "he could teach
[general equilibrium theory] to uninterested frat boys and
make them get excited about it." Page's work on mechanism
design is widely viewed as deep and original; last month he
organized a conference in Alabama on decentralization for the
National Bureau of Economic Research.

Thus did all three eventually become citizens of the high realm
of math econ. They learned that economic science, like any
other science, is built upon openess, disinterestedness,
organized skepticism and collaborative trust. They learned
that no result can be meaningful until it is disclosed to others
and accepted by them. They participated in the intricate
system of peer review and refereed journals by which new
results slowly become public knowledge. In fact, it was
collaborative maneuvers that led to the lawsuit. Wooders and
Chichilnisky for a time in 1992 and 1993 mulled a possible
collaboration, according to Wooders. It was when it fell apart
that Chichilnisky became especially mindful of the overlap
between their areas of interest. Page and Wooders began a
collaboration in late 1993, on the eve of the dispute. Indeed,
a paper they sent off to a conference just before the Boston
meetings in 1994 is at the center of the clash.

Once the lawsuit was filed in mid-1994, however, the
character of the dispute began to change. Colleagues were
widely consulted, their memories searched, their recollections
recorded. The tools of legal investigation, depositions and
discovery, came into play.

Gradually the Page and Wooders team found themselves
engaged in what they call "forensic economics." As they
sought to understand Chichilnisky's assertions, they came to
believe that she had become aggressive only after she had
obtained their abstract from third parties to whom they had
sent it.

Wooders wrote in a widely circulated letter, "She apparently
wrote and backdated new papers, referenced these and other
papers that we have not been able to locate (and appear not
to exist), and backdated new revisions of older papers. This
seems to have all been an attempt to create a false paper trail,
claim priority for our results and use these backdated papers
to get her friends to write letters stating that Page and I
behaved unethically."

A key episode in the controversy occurred on the eve of the
Quebec meetings, when Chichilnisky told the production
office of the journal Economics Letters (to which she was an
advisory editor) to change the title of a paper that had been
accepted by the editor to include the word "core," citing a
paper with Stanford's Curtis Eaves (that cannot be located) -
all in such a way as to change its emphasis to include the
core. Still later, she added seven lines of text and a proof and
deleted the reference to Eaves. "Limited Arbitrage, Gains
from Trade and Arrow's Theorem'' became "Limited
Arbitrage is Necessary and Sufficient for the Existence of a
Competitive Equilibrium and the Core, and Limits Voting
Cycles."

When he learned about the changes in July, the journal's
editor, Harvard professor Eric Maskin, directed that the
heavily amended paper not be printed until it again be
refereed - its emendations had turned it into a different paper.

When it mysteriously was printed anyway, and the journal
appeared in his offices in December with the unrefereed
article, Maskin ordered that a new issue be reprinted, without
the Chichilnisky paper - and that libraries be requested to
dispose of the unauthorized version. The Dutch publisher -
Elsevier Science - removed Chichilnisky from the editorial
board. The sanctions were virtually unprecedented in modern
technical economics. Since then, Chichilnisky's friends and
lawyers have attacked the decision, arguing that her changes
were inoffensive and within the range of ordinary practice.

Facing a battery of Chichilnisky's lawyers, isolated by the
legally enforced silence surrounding the matter, editor Maskin
and publisher Elsevier have steadily retreated from their earlier
decisions until they appear to be on the verge of caving in to
Chichilnisky's demands. The "amended" paper has been made
into another, separate contribution to the literature; it may be
published soon. Chichilnisky's friends say she is about to be
reinstated as a member of the advisory board. Those who are
knowledgeable about the episode are anxious to get back to
their work.

Meanwhile, witnesses to Chichilnisky's long history of
fractious behavior have begun to come forward, hestitantly
venturing accounts of one battle royal or another.

An inferential guide to Chichilnisky's scraps may be found in
her 12-page entry in a recent book called "Rejected: Leading
Economists Ponder the Publication Process." In it, she offers
a rambling chronicle of her history of disputes, rejections,
priority disputes and other allegations of impropriety that
could make a Jackie Collins novel. (Most other authors took
a single page.)

Omitted for the most part is an account of her long-running
battles with her colleagues at Columbia University, which
culminated in a sex-discrimination suit against the university.
Columbia settled on terms that many of her economist
colleagues considered ignominious - giving her a
well-endowed institute of her own and refusing to discuss the
circumstances. Afterward, Chichilnisky and Heal are
understood to have held discussions with several other
universities, seeking to endow chairs that they themselves
would hold. They were turned down by several. Earlier this
spring, Chichilnisky was named to a largely unexplained
"UNESCO Chair" at Columbia. University president George
Rupp called it "an important honor for the university."

Wooders has been involved in at least one priority dispute
herself. In a letter circulated widely by Chichilnisky's friends,
she was accused of duplicating - in an unreferred book - the
results of University of California economists Greg Engl and
Suzanne Scotchmer - in effect, depriving her colleagues of
credit due. Wooders has replied indirectly, writing of her
"impression ... that most claims of misappropriation begin
with insufficient knowledge and/or appreciation of the
literature."

Among the most curious aspects of the affair has been the role
of Kenneth Arrow as a mediator - of sorts. "Nobody else was
going to step forward," he says, quite correctly. And both
sides were willing to let him make a try. But Arrow - still
contributing to economics at 75 - was reluctant to take the
time to investigate deeply. An early compromise he suggested
was refused. And his close historic ties to Chichilnisky - he has
been among her most prominent boosters since mid 1970s -
undercut his credibility. "Ken doesn't like to say `no," says
Stanford economist Victor Fuchs.

(Another investigation, by economist Leo Hurwicz of
University of Minnesota - he had been Wooders' dissertation
adviser - has had a wider impact among economists, even
though it is in its preliminary version. He calls it "utterly
implausible" that they had been influenced by Chichilnisky's
work.)

Where does the matter stand now? Much remains to be seen.
Several of the disputed papers are steadily going forward,
their conflicting claims to credit being resolved for the most
part by the usual means of spreading credit around. The larger,
darker question is completely unresolved: Who gains from
resorting to lawyers? Chichilnisky may have lost the original
offensive - it seems fairly clear she folded her suit rather than
go forward with sworn testimony and document discovery
entailed by Wooders' counterclaim.

But lawyers seem to have won her an institute at Columbia.
They may be on the verge of restoring her membership on
Economics Letters' advisory board. The cost of litigating may
be the disapproval of her colleagues, but the gains are real _
and ominous. "I've been trying without success to find
someone to replace me for the last four years," says the editor
of one top journal. "They're all afraid of getting sued."

This story ran on page 41 of the Boston Globe on

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