2 Yanks will share Nobel in economics

Two Americans won the 2020 Nobel Prize in Economic Sciences on Monday for improving the way auctions work, and creating new formats that have helped sellers, buyers and taxpayers around the world.

Economists Paul Milgrom and Robert Wilson, of Stanford University in California, designed new auction formats for goods and services that are difficult to sell in a traditional way — including radio frequencies, airport landing slots and fishing quotas.

Their work resulted in crucial practical applications that have spread around the world and “are of great benefit to society,” said Peter Fredriksson, chair of the Nobel economics committee.

Wilson, 83, developed the theory for auctions of objects with a common value, which is “uncertain beforehand but, in the end, is the same for everyone.”

“Wilson 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 committee said.

Milgrom, 72, formulated “a more general theory” that also allows for what’s known as “private values.” His work demonstrated that “a format will give the seller higher expected revenue when bidders learn more about each other’s estimated values during bidding.”

Technically known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, the award caps a six-day series of Nobel prizes.

Wilson and Milgrom, who will share an estimated $1.1 million cash prize, join seven Americans who won Nobel prizes this year.

One of the 11 laureates was the United Nations’ World Food Program, which received the peace prize on Friday.