The Sveriges Riks bank Prize in Economic Sciences in Memory of Alfred Nobel 2020 was awarded jointly to Paul R. Milgrom and Robert B. Wilson “for improvements to auction theory and inventions of new auction formats.
About:
It was established by Sweden’s central bank and has been awarded since 1969 in memory of industrialist Alfred Nobel.
Auction theory
It is about how auctions lead to the discovery of the price of a commodity. Auction theory studies-
How auctions are designed
What rules govern them
How bidders behave
What outcomes are achieved
The nature of every commodity differs sharply. For instance-
A bankrupt person’s property is starkly different from the spectrum for radio or telecom use.
Similarly, carbon dioxide emission credits are quite different from the spot market for buying electricity, which, in turn, is quite different from choosing which company should get the right to collect the local garbage.
In other words, no one auction design fits all types of commodities or sellers.
The key variables that determine the outcome of an auction
Three key variables need to be understood while designing an auction.
context:
The Sveriges Riks bank Prize in Economic Sciences in Memory of Alfred Nobel 2020 was awarded jointly to Paul R. Milgrom and Robert B. Wilson “for improvements to auction theory and inventions of new auction formats.
About:
It was established by Sweden’s central bank and has been awarded since 1969 in memory of industrialist Alfred Nobel.
Auction theory
The key variables that determine the outcome of an auction