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- The Nobel Prize in Economics goes to Americans Paul R. Milgrom and Robert B. Wilson for improvements in auction theory and inventions of new auction formats.
- This was announced by the Royal Swedish Academy of Sciences in Stockholm.
Auctions are important to be able to set prices for goods and services in the economy, for example, fishing rights, trade in CO2 emission rights, electricity prices and take-off and landing rights at airports.
Astronomical values move between buyers and sellers every day. They affect us all, perhaps more than we think.
The chairman of the committee responsible for the Nobel Prize in economics, Peter Fredriksson, said that auctions move astronomical values between buyers and sellers every day. “They affect all of us, maybe more than we think,” Fredriksson said. Auctions influence home purchases, electricity prices and much more.
Benefits for companies around the world
Milgrom and Wilson’s work allows for the design of better auctions, Fredriksson said. The two would have adapted auction theory to more realistic settings. Your research allows you to invent completely new auction formats. Societies around the world could benefit from this.
Wilson was born in Geneva, Nebraska, in 1937, and Milgrom in Detroit in 1948. News of the award reached him early in the morning because of the time difference.
My wife points out that we buy ski boots on Ebay. I think it was an auction.
“This is very good news,” Wilson said when called by the Stockholm Academy when the announcement was made. He admitted that he had never participated in an auction himself. However, he corrected his statement when his wife pointed out that they had bought ski boots on Ebay.
The award is endowed with SEK 10 million (about CHF 1,022 million) per category, which is SEK 1 million more than the previous year. At the time, the business award went to economists Esther Duflo, Abhijit Banerjee and Michael Kremer, who were honored for their services in fighting global poverty. With the award of the Nobel Prize in Economics, all of this year’s Nobel Prize winners have been announced.
The Nobel Prize in Economics is the only one of the prizes that does not go back to the will of the inventor of dynamite and donor of the Alfred Nobel Prize. It has been donated by the Swedish Reichsbank since the late 1960s and is therefore not, strictly speaking, a classic Nobel Prize. However, it will be awarded along with the other prizes on the anniversary of Nobel’s death, December 10.
