2 Americans share 2020 Nobel Prize in economics for improving auctions, inventing new formats

(Image credit: Anders Wiklund/TT News Agency/AFP/Getty Images)

published 12 October 2020

The Royal Swedish Academy of Sciences on Monday awarded the 2020 Nobel Prize in economics to two American researchers at Stanford, Paul R. Milgrom and Robert B. Wilson, for "improvements to auction theory and inventions of new auction formats."

"People have always sold things to the highest bidder, or bought them from whoever makes the cheapest offer," the academy said. Milgrom and Wilson studied how auctions work, formulated different theories, then "used their insights to design new auction formats for goods and services that are difficult to sell in a traditional way, such as radio frequencies. Their discoveries have benefited sellers, buyers, and taxpayers around the world."

The U.S. government was one of the first to try out Milgrom and Wilson's theories, selling radio frequencies to telecoms in 1994. Their new formats allowed "auctioning off many interrelated objects simultaneously, on behalf of a seller motivated by broad societal benefit rather than maximal revenue," the Royal Swedish Academy wrote. This is the final Nobel prize of the year. The two economists will split the $1.1 million prize.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Explore More

Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.

Subscribe to The Week

Sign up for The Week's Free Newsletters

Sign up for Today's Best Articles in your inbox