New Delhi (NVI): The 2020 Nobel Prize in Economic Sciences was awarded to Paul R Milgrom and Robert B Wilson, both of Stanford University, for their work in developing the theory of auctions.
“This year’s Laureates, Paul Milgrom and Robert Wilson, have studied how auctions work. They have also 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,” the Nobel Prize Committee said in a release.
Robert Wilson, developed the theory for auctions of objects with a common value – a value which is uncertain beforehand but, in the end, is the same for everyone.
He was awarded this year’s Prize in Economic Sciences, showed why rational bidders tend to place bids below their own best estimate of the common value: they are worried about the winner’s curse – that is, about paying too much and losing out, the release added.
On the other hand, Laureate Paul Milgrom formulated a more general theory of auctions that not only allows common values, but also private values that vary from bidder to bidder.
The prize for economics is officially known as the Sveriges Riksbank Prize in Economic Sciences. It was established by Sweden’s central bank and has been awarded since 1969 in memory of industrialist Alfred Nobel.
The Nobel prize, which consists of a gold medal, a diploma and a cheque for 10 million Swedish kronor will be shared equally between the Laureates.
Earlier on October 9, the World Food Programme was awarded the 2020 Nobel Peace Prize for its efforts to combat hunger and its “contribution to bettering conditions for peace in conflict-affected areas.”