2020 Nobel Prize: Paul Milgrom and Robert Wilson awarded prize for work on auction theory

Image Source: nobelprize.org

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

The two academicians have done pioneering research on how auctions work, using their profound knowledge to formulate new auction formats for those goods and services such as landing slots and radio frequencies that are difficult to sell in conventional ways. Their research into this subject has helped buyers and sellers across the world and bas developed better real-world transactions.

The economists also postulated new formats for auctioning many interrelated objects on behalf of a seller who is motivated by doing good for society rather than simply achieving the highest price possible.

The two have done extensive research on the behaviour of auction participants and used those insights into designing better auction processes.

While Robert Wilson was born in 1937 in Geneva in the United States, Paul Milgrom was born in 1948 in Detroit. Milgrom told Reuters that Wilson, who lives across the street from his residence in Stanford, California, came to knock on his door in the pre-dawn hours to tell him of their shared prize because his phone had been on silent mode so he could sleep.

Professor Göran K. Hansson, Secretary General of the Royal Swedish Academy of Sciences, announced the recipients of the prestigious prize. The two researchers will share the prize money of 10 million Swedish knoner.

The Nobel Prize in Economic Sciences was established in 1968 by the Sveriges Riksbank, Sweden’s central bank, to mark its 300th anniversary. It was first awarded in the year 1969, joining the five original prizes for Physics, Chemistry, Peace, Literature, and Medicine established by Alfred Nobel in his 1895 will.

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