Daily Inspiration Quote by George Stigler

Stigler is confessing a kind of productive heresy: he got hooked not on elegant theory, but on the embarrassing places where it didn’t behave. Economic models love clean endings. Under “perfect” conditions - full information, frictionless trade, lots of buyers and sellers - the price should collapse into one number. Stigler’s fascination with “dispersion” is a pointed reminder that the world keeps smearing that number into a range, and that the smear itself is the story.

The phrasing is tellingly modest, almost offhand: “had gotten interested,” “existence of dispersion.” It’s the tone of a scientist noticing a stain on the lab coat and deciding the stain matters more than the brochure. Subtext: economists were too comfortable treating deviation as noise. Stigler is signaling a methodological pivot: take the deviation seriously enough to build theory around it.

Contextually, this is Chicago before it becomes a brand name for market fundamentalism in popular caricature. Stigler, a core Chicago figure, isn’t saying markets fail; he’s saying markets are costly to operate. Price dispersion is the fingerprint of search costs, imperfect information, time, geography, and bargaining - the mundane mechanics that standard theory hand-waves away. His later work on the economics of information turns this curiosity into a weapon: if information is expensive, then “one price” isn’t the default; it’s an achievement.

There’s also a quiet institutional critique embedded here. If the textbook predicts a single price and the data stubbornly refuses, the problem isn’t necessarily the market. It may be the textbook’s refusal to price the act of finding the price.