While auctions are dictating a swathe of façades on modern-era economic landscape ranging from Google’s ad sales to consumers’ bids for certain products to governments’ approaches for allotting subsidiaries, two American Stanford scholars had won this year’s Nobel prize in economics to help auctions run effortlessly.
In point of fact, citing the discoveries of Paul R. Milgrom and Robert B. Wilson, both Stanford scholars hailing from the Untied States, the Novel Committee was quoted saying followed by Monday’s announcement that the aforementioned scholars’ innovations in auctions had benefitted buyers, sellers alongside taxpayers all over the world.
Wilson, 83, and Milgrom, 72, happened to be neighbours.
Two Americans share ‘20 Nobel Prize in economics
In tandem, referring to Wilson’s and Milgrom’s efforts that successfully tackled even the trickiest problems in an auction, the Committee said on Monday, “Wilson’s work showed why rational bidders tend to place bids below their own best estimate of the common value,” pointing towards a slew of incidents where items or services went for less than their valuations and apparently to the buyers who might not want them the most.
Meanwhile, a former student of Wilson and an economist at the University of Maryland, Peter Cramton said following the declaration, “The Nobel winners’ work had offered an elaborative guidance on How to price and allocate scarce goods -- radio spectrum, electricity, financial securities, and many more as auctions ask and answer the most fundamental questions in economics: Who should get the goods and at what prices?” Apart from that, adding that the winners’ work had not been limited to money, since a number of Governments had been auctioning off the rights in hopes of reducing emissions, a Nobel Committee member Ingrid Werner said, “The objective is not always to maximize the revenue for the seller but also can have a societal objective. ”