Nobel Prize for economics awarded to US pair Paul Milgrom and Robert Wilson
- The Nobel economics prize completes the 2020 awards
- Award ceremonies scaled down due to the pandemic
US economists Paul Milgrom and Robert Wilson won the Nobel Prize for economics on Monday for work on commercial auctions, including for goods and services difficult to sell in traditional ways such as radio frequencies, the Nobel Committee said.
The duo was honoured “for improvements to auction theory and inventions of new auction formats,” the jury said.
The Royal Swedish Academy of Sciences noted that the discoveries by Milgrom, 72, and Wilson, 83, “have benefitted sellers, buyers and taxpayers around the world,” it said in a statement.
The committee said Wilson’s work showed “why rational bidders tend to place bids below their own best estimate of the common value”, that is, “the value which is uncertain beforehand but, in the end, is the same for everyone”.
“[Bidders] are worried about the winner’s curse – that is, about paying too much and losing out,” the committee said.
Milgrom developed a more general theory of auctions that takes into account what is known as the “private value” of what’s being sold that can vary greatly from bidder to bidder.
Speaking to reporters in Stockholm by phone after learning of his win, Wilson struggled to think of an auction he himself had participated in. But then added: “My wife points out to me that we bought ski boots on eBay. I guess that was an auction.”
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 to reduce global poverty.
Few economists could have predicted last year 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 (US$1.1 million) cash prize and a gold medal.
