Robert Wilson (left) and Paul Milgrom
TWO ECONOMISTS FROM Stanford University in California have won the 2020 Nobel Prize in Economic Sciences handed out by the Royal Swedish Academy of Sciences. Robert Wilson is the Adams Distinguished Professor of Management, Emeritus, at Stanford Graduate School of Business, and Paul Milgrom holds the Shirley R. and Leonard W. Ely Jr. Professorship in the School of Humanities and Sciences. They were given the award, officially known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, for “improvements to auction theory and inventions of new auction formats.”
Wilson and Milgrom are known for their research and teaching on auction market design, pricing, negotiations, and other topics concerning industrial organization and information economics. Together and individually, they have helped create auction designs and competitive bidding strategies for the communications, oil, and power industries; their work also has influenced the design of innovative pricing schemes.
“Bob Wilson and Paul Milgrom’s path-breaking discoveries in auction theory opened up new possibilities in real-world transactions,” says Marc Tessier-Lavigne, president of Stanford. “Their insights into bidding and pricing have become integral to our modern economy.”
Milgrom is the third of Wilson’s students to win a Nobel Prize, after Alvin Roth, a professor of economics at Stanford, and Bengt Holmström, a professor of economics at the Massachusetts Institute of Technology. In fact, Wilson—who is Milgrom’s neighbor as well as colleague—was the one who woke Milgrom up to tell him the prize committee was trying to reach him to tell him of the award. The encounter was captured on Milgrom’s doorbell camera. They will split the prize money of $10 million Swedish kronor (about 1 million USD).