Two American economists, 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 — innovations that have had huge practical applications when it comes to allocating scarce resources.
The pair, close collaborators who are both affiliated with Stanford University, have pioneered new auction formats that governments have since used to auction off radio frequency.
“They haven’t just profoundly changed the way we understand auctions — they have changed how things are auctioned,” said Alvin E. Roth, a Nobel laureate himself who was one of Mr. Wilson’s doctoral students. “The two of them are some of the greatest theorists living in economics today.”
Auctions help to sell a variety of products, including art, minerals and online advertising. They can also take on various characteristics: Objects can have a shared, common value for all bidders