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American economists Paul Milgrom and Robert Wilson are the winners of the Nobel Prize in Economics for the “improvements in auction theory and inventions of new auction formats, “announced the Royal Swedish Academy of Sciences.
This is the latest award to be announced, in addition to the Nobel Prize in Chemistry, Medicine, Physics, Literature and Peace that were announced during this week and that will be awarded on December 10.
The Academy noted that Milgrom and Wilson “have improved auction theory and invented new auction formats, benefiting sellers, buyers and taxpayers around the world“.
The economists “not only clarified how auctions work and why the bidders behave in a certain way, but instead used their theoretical findings to invent completely new auction formats for the sale of goods and services “, indicated the Academy.
BREAKING NEWS:
The 2020 Sveriges Riksbank Prize in Economics in Memory of Alfred Nobel has been awarded to Paul R. Milgrom and Robert B. Wilson “for improvements in auction theory and inventions of new auction formats.”#Nobel Prize pic.twitter.com/tBAblj1xf8– The Nobel Prize (@NobelPrize) October 12, 2020
“This year’s economics laureates started with fundamental theory and then used their results in practical applications, which have spread throughout the world. His discoveries are of great benefit to society “, declared for his part the president of the Prize Committee, Peter fredriksson.
The Swedish Academy indicated that in 1994, the US authorities first used one of the auction formats of the two winners now to sell radio frequencies to telecommunications operators and that, since then, many other countries have followed suit.
Using auction theory, the researchers try to understand the results of different bidding rules and final prices, the auction format.
The Academy said that “the analysis is difficult, because the bidders behave strategically, based on the information available. They take into consideration both what they know themselves and what they think other bidders know.”
Congratulations to our 2020 Economics Laureate, Robert Wilson!
Wilson woke up early this morning to the news of his award. This photo was taken during our telephone interview with him, soon.#Nobel Prize pic.twitter.com/UHtkG9PGbW
– The Nobel Prize (@NobelPrize) October 12, 2020
Wilson (Geneva, Nebraska, 1937) studied mathematics at Harvard and did a master’s and a doctorate in business; his teaching career began at Berkeley and continued at Stanford, where he met Milgrom.
Eleven years younger than his colleague, Milgrom (Detroit, Michigan) also studied Mathematics, at the University of Michigan, and then received his Ph.D. in Economics at Stanford, where he has been a professor since 1987.
Wilson is considered one of the first economists to use game theory to analyze market situations in which the actors do not have the same degree of information.
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