Economy

Stanford economists win Nobel prize for auction theory

Stanford economists win Nobel prize for auction theory”

"Their discoveries are of great benefit to the society", Peter Fredriksson, chair of the Prize Committee said.

This year's Laureates in Economic Sciences have made auction theory more applicable in practice through the creation of new, bespoke auction formats.

Wilson's work led to the theory of a common value, which is the best estimate of what an item is worth that bidders then try to set their offers below to avoid overpaying. Public procurements can also be conducted as auctions.

In the 1990s, the U.S. Federal Communications Commission put this theory to work to better allocate radio frequency bands to telecom and media companies.

Milgrom complemented that with theories on "private values", when the perceived value of something differs from bidder to bidder. By using Milgrom and Wilson's auction format, created to counter the problems of uncertain values and the winner's curse, the new FCC spectrum auctions drove billions of dollars in sales over the next twenty years.

The winners were announced in Stockholm by Goran Hansson, secretary-general of the Royal Swedish Academy of Sciences, rounding off a week of Nobel Prizes. He became the Shirley and Leonard Ely Professor of Humanities and Sciences at Stanford University, and frequently lectures at Israeli universities.

More news: Int'l Day of Girl Child: Ogun gov, stakeholders advocate gender equality, empowerment

But he said adverts on search engines were usually sold at auction, and noted his wife had recently bought some ski boots on eBay. "I've never actively participated in an auction personally", he replied.

Using auction theory, it is possible to explain how these three factors govern the bidders' strategic behaviour and thus the auction's outcome.

Last year, Indian-American economist Abhijit Banerjee and Esther Duflo, both of MIT, and Michael Kremer of Harvard were honored for more than 20 years of economic research to develop new ways to study and help in alleviating global poverty. Since its establishment in 1969, it has been awarded 51 times and is now widely considered one of the Nobel prizes.

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 the novel coronavirus, triggering a sharp drop in business activity worldwide.

Wilson and and his fellow victor Milgrom will share prize money of 10 million kronor ($1.1 million), up from 9 million kronor awarded previously. The World Food Program won the peace prize for its effort to combat hunger.

Two American professors have been awarded the Nobel Prize for economic sciences for their work on how auctions function, a field that affects everything from high-end art prices to consumers' electricity bills.



Like this

loading...
loading...

Latest


12 October 2020
Americans Milgrom, Wilson win Nobel Prize for economics
On Friday, the Nobel Peace Prize for 2020 has been awarded to the Nobel Peace Prize 2020 awarded to World Food Programme (WFP). "Their discoveries are of great benefit to the society", Peter Fredriksson, chair of the Prize Committee said.

12 October 2020
Americans Win Nobel Prize in Economics
Women have been more prevalent than usual this year, with American poet Louise Gluck winning the literature prize. The World Food Programme won the Nobel Peace Prize on Friday for its effort to combat hunger worldwide .

12 October 2020
China joins WHO-led COVAX for fair access to Covid-19 vaccines
Meanwhile, the main hurdle for COVAX, according to Ding, was the wait for one of the first vaccines to be declared a success. Woods said: "Pfizer have said they are making good progress with the development of a Covid-19 vaccine ".

12 October 2020
Mexico Makes Nearly $160 Million Down Payment For COVAX Vaccine Plan
He explained the U.S.is now working on producing all six potential vaccines across more than 23 manufacturing facilities. The move could also help China in pushing its own vaccines through the COVAX facility.

12 October 2020
Waymo begins full driverless public service in Phoenix
Those who are lucky enough to have access to the app will now be able to ride in any of Waymo's 300-plus autonomous minivans. Barriers between the front row and rear passenger cabin for safety will be added to the cars later this year.

12 October 2020
Fauci Says Quote in New Trump Ad Was Taken Out of Context
"President Trump tackled the virus head on, as leaders should", the narrator says before cutting to the clip of Fauci. A lot of things have happened since March that have soured Fauci's views of how Trump has handled the pandemic .

12 October 2020
India Inc welcomes govt stimulus to boost demand
To aid the economy, bruised by the coronavirus pandemic, the Centre on Monday announced a few measures for government employees. On its part, the Centre has also chose to allocate ₹25,000 crore over and above the capital expenditure of ₹4.13-lakh crore.

12 October 2020
NI registered 1,066 cases of Covid-19
With this major surge, Northern Ireland has recorded more cases than the Republic in the last week despite its smaller population. Northern Ireland's Deputy First Minister is self-isolating after a family member tested positive for Covid-19.

12 October 2020
Michigan AG Says White Supremacist Groups Behind Plot To Kidnap Gov. Whitmer
There is no indication in the criminal complaint, however, that the men were inspired by Trump. Radical groups have no doubt targeted her as a direct result of the president's rhetoric.

12 October 2020
Benrahma: West Ham United agree deal to sign Brentford forward
However, according to The Athletic , the Hammers have agreed a fee with Brentford , which could rise to £30m including add-ons. Bournemouth have turned down a West Ham bid for Joshua King, but the forward could still move before Friday.