Last night, the 2020 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (aka Nobel Prize in Economics) was announced as being awarded to Paul Milgrom and Robert Wilson (both Stanford), "for improvements to auction theory and inventions of new auction formats". Based on some informal conversations today, I wasn't the one in my corridor to raise an eyebrow and wonder whether Milgrom didn't already have a Nobel Prize. Needless to say then, the award is well deserved and probably overdue.
This prize is just the latest in a long run of awards for advances in game theory and related work, but this time at the intersection of theoretical and applied economics. Auction theory, as developed by Wilson and Milgrom, is the basis for allocating radio spectrum (for mobile phone signals, for example), for electricity spot markets, and for advertising on Google. It was interesting to note Wilson's original work on the "winner's curse", which is something I have blogged on before (see for example here and here).
Marginal Revolution has good coverage on their broader research, with separate posts for Milgrom and Wilson, pointing to their key contributions. A Fine Theorem also has an excellent post on the topic. The Nobel Committee's website also has a good overall summary.
Milgrom was Wilson's PhD student, but it is worth noting that Wilson was also the PhD advisor for two other earlier Nobel Prize winners, Bengt Holmstrom (2016 winner) and Alvin Roth (2012 winner). That is quite some achievement!
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