Americans Paul R.Milgrom and Robert B. Wilson were honoured with the Nobel Prize in Economics for the year 2020.
They have been awarded the honour for ”improvements to auction theory and inventions of new auction formats.”
The Nobel Committee while announcing the award declared that the improved auction theory will benefit sellers, buyers and taxpayers around the world.
The committee noted Wilson’s work that showed why rational bidders tend to place bids below their own best estimate of the common value, as they worried about the winner’s curse (which means, paying too much and losing out).
Further, Milgram was honoured for formulating a general theory of auctions that allow for private values that vary from bidder to bidder along with common values.
Last year the award was won by two MIT researchers- Indian-American Abhijit Banerjee and Esther Duflo.
Photo Credit: CNN