2020 Nobel in Economics Is Awarded to Paul Milgrom and Robert Wilson – The New York Times

Paul R. Milgrom and Robert B. Wilson were awarded the Nobel in economic science on Monday for improvements to auction theory and inventions of new auction formats.

Auctions help to sell a variety of products, including art, minerals and advertising on the internet. Mr. Wilson developed a theory for auctions of items with a common value, explaining why bidders will offer less than they think the object or service is worth because they are afraid of overpaying — the winner’s curse. Mr. Milgrom came up with a theory in which private values vary from bidder to bidder in an auction.

Mr. Wilson and Mr. Milgrom have invented new formats for auctioning off many related objects at the same time — formats that have been used by governments to sell radio frequency.

The pair “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, chairman of the prize committee, said in a release accompanying the announcement.

Mr. Milgrom was born in 1948 in Detroit. He was educated at Stanford University, where he received a doctorate in 1979 and where he is now a professor.

Mr. Wilson was born in 1937 in Geneva, Neb., educated at Harvard University, and is now a professor emeritus at Stanford.

Abhijit Banerjee and Esther Duflo, both of M.I.T., and Michael Kremer of Harvard were honored for more than 20 years of economic research to develop new ways to study — and help — the world’s poor. Read more about them here.