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Nobel Prize In Economics Goes To Paul R Milgrom, Robert B Wilson For Improvements To Auction Theory

STOCKHOLM — Americans Paul R. Milgrom and Robert B. Wilson have won the Nobel Prize in economics for “improvements to auction theory and inventions of new auction formats.”

The winners were announced Monday in Stockholm by Goran Hansson, secretary-general of the Royal Swedish Academy of Sciences.

The award caps a week of Nobel Prizes at a time when much of the world is experiencing the worst recession since World War II because of the impact of the coronavirus pandemic.

Technically known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, the award was established in 1969 and is now widely considered one of the Nobel prizes.

Last year’s award went to two researchers from the Massachusetts Institute of Technology and a third from Harvard University, for their groundbreaking research into efforts to reduce global poverty.

Few economists could have predicted last fall that the globe would come to a virtual standstill within months, as governments closed their borders, imposed lockdowns and ordered other measures to stop the spread of COVID-19, triggering a sharp dip in business activity worldwide.

The prestigious award comes with a 10-million krona ($1.1 million) cash prize and a gold medal.

On Monday, the Nobel Committee awarded the prize for physiology and medicine for discovering the liver-ravaging hepatitis C virus. Tuesday’s prize for physics honored breakthroughs in understanding the mysteries of cosmic black holes, and the chemistry prize on Wednesday went to scientists behind a powerful gene-editing tool.

The literature prize was awarded to American poet

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2 Americans win Nobel Prize in economics for improvements to auction theory

Two American economists won the Nobel Prize in Economic Sciences on Monday for improving the way auctions work and creating new auction formats that have benefited sellers, buyers and taxpayers around the world.

Paul Milgrom and Robert Wilson, who are based at Stanford University in California, designed new auction formats for good and services that are difficult to sell in a traditional way, including radio frequencies, airport landing slots and fishing quotas.

Their work resulted in crucial practical applications that have spread globally and “are of great benefit to society,” said Peter Fredriksson, chair of the Nobel committee.

Wilson, 83, developed the theory for auctions of objects with a common value, which is “uncertain beforehand but, in the end, is the same for everyone.”



a screenshot of a computer screen: Americans Paul R. Milgrom, left, and Robert B. Wilson have won the Nobel Prize in economics for 'improvements to auction theory and inventions of new auction formats.'


© Anders Wiklund
Americans Paul R. Milgrom, left, and Robert B. Wilson have won the Nobel Prize in economics for ‘improvements to auction theory and inventions of new auction formats.’

Americans Paul R. Milgrom, left, and Robert B. Wilson have won the Nobel Prize in economics for ‘improvements to auction theory and inventions of new auction formats.’ (Anders Wiklund/)

Video: U.S. auction theory pioneers win Nobel economics prize (Reuters)

U.S. auction theory pioneers win Nobel economics prize

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“Wilson showed why rational bidders tend to place bids below their own best estimate of the common value: they are worried about the winner’s curse — that is, about paying too much and losing out,” the committee said in a statement.

Milgrom, 72, formulated “a more general theory” that also allows for what is known as “private values.” His work demonstrates that “a format will give the seller higher expected revenue when bidders learn more about each other’s estimated values during bidding.”

Technically known as the Sveriges Riksbank Prize in Economic Sciences in Memory

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Economics Nobel goes to Paul R. Milgrom, Robert B. Wilson for their work on auction theory

This year’s Economic Sciences Laureates, Paul Milgrom and Robert Wilson, have improved auction theory and invented new auction formats, benefitting sellers, buyers and taxpayers around the world,” the academy said.

The 2020 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded to Paul R. Milgrom and Robert B. Wilson “for improvements to auction theory and inventions of new auction formats.”

“Auctions are everywhere and affect our everyday lives. This year’s Economic Sciences Laureates, Paul Milgrom and Robert Wilson, have improved auction theory and invented new auction formats, benefitting sellers, buyers and taxpayers around the world,” the academy said.

Robert Wilson developed the theory for auctions of objects with a common value – a value which is uncertain beforehand but, in the end, is the same for everyone. Mr. Wilson showed why rational bidders tend to place bids below their own best estimate of the common value: they are worried about the winner’s curse – that is, about paying too much and losing out.

Paul Milgrom formulated a more general theory of auctions that not only allows common values, but also private values that vary from bidder to bidder. He analysed the bidding strategies in a number of well-known auction formats, demonstrating that a format will give the seller higher expected revenue when bidders learn more about each other’s estimated values during bidding.

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A bust of Alfred Nobel at the Karolinska Institute in Stockholm on October 5, 2020.

 

The award caps a week of Nobel Prizes and is technically known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Since its establishment in 1969, it has been awarded 51 times and is now widely considered one of the Nobel prizes.

Last year’s award went to two researchers from the Massachusetts Institute of Technology and a third from Harvard University, for their groundbreaking research into efforts

Continue Reading

American duo win Nobel prize in economics for improvements to auction theory

A Nobel Prize medal
A Nobel Prize medal

Americans Paul R Milgrom and Robert B Wilson have won the Nobel Prize in economics for “improvements to auction theory and inventions of new auction formats”.

The winners were announced in Stockholm by Goran Hansson, secretary-general of the Royal Swedish Academy of Sciences.

The award caps a week of Nobel Prizes at a time when much of the world is experiencing the worst recession since the Second World War and because of the impact of the coronavirus pandemic.

Technically known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, the award was established in 1969 and is now widely considered one of the Nobel prizes.

Last year’s award went to two researchers from the Massachusetts Institute of Technology and a third from Harvard University, for their groundbreaking research into efforts to reduce global poverty.

Few economists could have predicted last autumn that the globe would come to a virtual standstill within months, as governments closed their borders, imposed lockdowns and ordered other measures to stop the spread of Covid-19, triggering a sharp dip in business activity worldwide.

The prestigious award comes with a 10 million krona (£840,000) cash prize and a gold medal.

Last week, the Nobel Committee awarded the prize for physiology

Continue Reading