2020 Nobel Prize in Economics

On the 12th of October, American economists Paul Milgrom and Robert Wilson were awarded the 2020 Nobel Prize in economics. The two professors are based at the University of Stanford and were recognized for their work in auction theory. This new theory describes new formats for auctioning many interrelated objects on behalf of a seller motivated by doing good for society rather than simply achieving the highest price possible. These formats were used in 1994, when US authorities wanted to fairly privatize radio broadcasting stations throughout the country. The new development is all about avoiding the ‘winner’s curse’, this phenomenon has the tendency for the winning bid of an auction to exceed the true worth of the item.