They won for their work on Auction theory
This year’s Nobel Prize in Economic Sciences has been awarded to Stanford University economists Paul Milgrom and Robert Wilson. They won the award for their work in auction market design, pricing, negotiations and other topics concerning industrial organization and information economics.
The duo’s work changed the modern telecommunications industry. The auction format which they developed, along with American economist Preston McAfee, was used by the Federal Communications Commission for the 1994 radio spectrum auctions.
These auctions were for the frequencies ultimately used by mobile phone providers throughout the United States.
Paul Milgram said, “There are times that I have ideas and people think, ‘That’s too novel, that’s crazy, we’re not going to try that,’ ” said Milgrom, who holds the Shirley R. and Leonard W. Ely, Jr. Professorship in the School of Humanities and Sciences. “But I think that one of the effects of a prize like this is that people will pause before rejecting. They’ll take things more seriously, and that will help me make novel things happen.”
The Royal Swedish Academy of Sciences said of the two, “They have also used their insights to design new auction formats for goods and services that are difficult to sell in a traditional way, such as radio frequencies. Their discoveries have benefited sellers, buyers and taxpayers around the world.”
Stanford President Marc Tessier-Lavigne said, “Bob Wilson and Paul Milgrom’s path-breaking discoveries in auction theory opened up new possibilities in real-world transactions.
“Their insights into bidding and pricing have become integral to our modern economy. Their work is a shining example of the ways in which both fundamental discovery and its application to practical solutions make enormous contributions to modern society. All of us at Stanford are tremendously proud of their accomplishments.”
Congratulations to Professors Paul Milgrom and Robert Wilson, winners of the 2020 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for improvements to auction theory and inventions of new auction formats. #NobelPrize https://t.co/hIl0dsbp9V pic.twitter.com/Ywj3p1puDk
— Stanford University (@Stanford) October 12, 2020