Stanford Pair Win Nobel For Economic Ideas Driving Ebay, Cellphone Spectrum Sales

by Erik Sherman

Going once, going twice—the winners of this year’s Nobel Prize in Economic Sciences are two Stanford economists whose work lets the world make mobile phone calls, switch on a light, and buy and sell on eBay.

Robert Wilson and Paul Milgrom, are famous for their groundbreaking work on auction theory. They took the 2,500-year-old practice of selling goods to the highest bidder and transformed how they worked and how the world looked at a result.

One of the major areas they developed was analysis of how the rules that govern auctions affect the efficiency of the outcomes—how bidders get the value they want, sellers maximize their income, and the process can happen more easily and quickly. Then they found ways to move beyond the fast-talking and gavel-banging stereotype of an auction and into many new types that new rules could enable.

“Sometimes the invisible hand of the

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The $120 Billion Idea Behind This Year’s Nobel Prize in Economics

(Bloomberg Businessweek) — You know that feeling of elation when you win an auction—say, a bidding war for a house—and how it’s immediately followed by that sinking feeling that you overpaid? That’s the winner’s curse. It’s a real thing. Once you stop to think, you realize there’s probably a good reason other people weren’t willing to pay as much as you did. By winning, you just lost.

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Understanding the winner’s curse, and how to avoid it, is part of the reason Stanford University economists Robert Wilson and Paul Milgrom won this year’s Nobel Prize in economics—formally called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (PDF).

Wilson’s and Milgrom’s work is unusual in that it’s both theoretical and highly practical. The U.S. Federal Communications Commission raised more than $120 billion for taxpayers from 1994 through 2014 by selling off wireless frequencies using an auction

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Nobel Prize in Economics awarded to Paul Milgrom and Robert B Wilson of Stanford University

“Their discoveries have benefited sellers, buyers and taxpayers around the world,” the prize committee said.

The two men will receive a cash award of 10 million Swedish kronor, worth a bit more than $1.1 million.

Today’s announcement comes as the global economy is battling to emerge from a painful recession caused by the coronavirus pandemic.

The International Monetary Fund expects “a partial and uneven recovery” next year. Finance ministers and central bank chiefs from 189 member nations will gather virtually this week for the annual meetings of the fund and its sister institution, the World Bank.

Last year, a trio of economists shared the prize, which they received in recognition of their pioneering work developing new methods to fight global poverty. Abhijit Banerjee and Esther Duflo, both from the Massachusetts Institute of Technology, and Michael Kremer of Harvard University were honored for practical research insights that the academy said had

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Economics Award Caps Week of Nobel Prizes | Business News

STOCKHOLM (AP) — The winner of this year’s Nobel Prize in economics will be announced Monday, coming as much of the world experiences the worst recession since World War II because of the impact of the coronavirus pandemic.

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 fall 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

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