Americans Milgrom and Wilson win the Nobel Prize in Economics for “improvements in auction theory”

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Americans Milgrom and Wilson win the Nobel Prize in Economics for




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Both “not only clarified how auctions work and why bidders behave in certain ways, but they used their theoretical insights to invent entirely new auction formats for the sale of goods and services.”






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Copenhagen, Denmark, October 12 (EFE) .- American economists Paul Milgrom Y Robert Wilson they won today the Nobel Prize in Economics by “improvements in auction theory and inventions of new auction formats, ”the Royal Swedish Academy of Sciences reported today.

The award is the last of the Nobel Prizes announced and will be delivered, like the others, on December 10.

“Auctions are everywhere and affect our daily lives,” explained the Academy when announcing the names of the winners.

Milgrom and Wilson “have improved auction theory and invented new auction formats, benefiting sellers, buyers and taxpayers around the world,” added the Academy.

Of Wilson the Academy noted that his work “showed why rational bidders tend to place bids below their best estimate of common value: they are concerned about the winner’s curse, that is, paying too much and losing.”

As for Milgrom, “he formulated a more general theory of auctions that not only allows common values, but also private values ​​that vary from one bidder to another.”



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Both “not only clarified how auctions work and why bidders behave in certain ways, but they used their theoretical insights to invent entirely new auction formats for the sale of goods and services.”

“This year’s economics honorees started with fundamental theory and then used their results in practical applications, which have spread around the world. Their discoveries are of great benefit to society ”, declared the Chairman of the Prize Committee, Peter Fredriksson.

The Swedish Academy indicated that in 1994, the US authorities first used one of the auction formats of the two winners now to sell radio frequencies to telecommunications operators and that, since then, many other countries have followed suit.

The Swedish Academy recalled that “currently, at auctions, objects worth astronomical sums of money change hands every day, not only household objects, art and antiques, but also securities, minerals and energy” and that public acquisitions “They can also be held as auctions.”



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Using auction theory, researchers try to understand the results of different bidding rules and final prices, the auction format.

The Academy said that “the analysis is difficult, because the bidders behave strategically, based on the information available. They take into consideration both what they know themselves and what they think other bidders know. “

The Nobel Prize in Economics, whose real name is the Alfred Nobel Memorial Prize in Economic Sciences, is the only one of the six awards not created in its day by the Swedish magnate, but was instituted in 1968 from a donation to the Foundation Nobel Prize from the Swedish National Bank on the occasion of its 300th anniversary.

The Medicine award opened last Monday the round of announcements of the present edition of these prestigious awards, followed by those of Physics, Chemistry, Peace and Literature.

Both the announcements of the prizes and the delivery of this edition of the Nobel are in a reduced format due to the coronavirus pandemic.



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