Nobel Prize In Economics Awarded To Paul And Robert For Their Contribution In Auction Theory
Paul Milgrom And Robert Wilson Awarded Nobel Prize In Economics: American economists Paul Milgrom and Robert Wilson were awarded the 2020 Nobel Prize in economics. The Royal Swedish Academy of Sciences said on Monday.
Milgrom and Wilson, professors at California’s Stanford University, were honoured for theoretical findings. It enhanced the way auctions work. They also developed auction formats for products and services that are difficult to sell in conventional forms. Such as radio frequencies, according to the Royal Swedish Academy of Sciences.
“This year’s Laureates in Economic Sciences started out with fundamental theory and later used their results in practical applications, which have spread globally. Their discoveries are of great benefit to society,” Peter Fredriksson, chair of the prize committee, said in a statement.
On behalf of a seller driven by the more significant social value of the item rather than making the most money out of its selling, Wilson and Milgrom developed new formats for auctioning off multiple interrelated items simultaneously. The pair researched and announced the effects of various bidding and final pricing rules, known as the auction format.
“The analysis is difficult, because bidders behave strategically, based on the available information. They take into consideration both what they know themselves and what they believe other bidders to know,” the release adds, about the complexity involved in picking an auction format.
According to the Royal Swedish Academy of Sciences, on behalf of a seller inspired by doing good for society. Economists developed new formats for auctioning multiple interrelated items. Rather than merely obtaining the highest possible price.
Radio Spectrum Bands
Organisational ideas around the auction process have inspired new formats for auctioning off similar items at the same time. As per the release, these formats have also been used by governments to sell radio frequencies.
The US authorities first used one of their formats for the sale of radio spectrum bands in 1994. It helped ensure that taxpayers benefited from the sale to mobile network operators of radio frequencies. Owned by the government but were of immense value.
The Sveriges Riksbank Prize in Economic Sciences is officially recognised as the prize for economics. The central bank of Sweden founded it. It is awarded in memory of the industrialist Alfred Nobel since 1969.