• Fri. Oct 30th, 2020

Receiving an unexpected knock on the front door in the early hours of the morning does not usually bring good news – but it is how one man found out he had won a Nobel Prize.Economist Paul Milgrom has won the prize for economics, alongside his colleague Robert Wilson.

The prize’s organizers had been unable to reach Mr. Milgrom, so Mr. Wilson took it upon himself to let his colleague know about their win.

“You know, I was asleep and my phone is set not to take calls from unknown numbers,” Mr. Milgrom said. “So, they never got through to me.I heard a knock at my door and apparently it was Bob Wilson, my next door neighbor. ‘Paul, wake up! You’ve won the Nobel Prize!'”

Mr. Milgrom was overjoyed to an extent he lacked words. Both men are based at Stanford University in the US and won for improving the theory of how auctions work and inventing new and better formats that are now woven into the economy.

Their work has been used to sell radio frequencies, fishing quotas and airport landing slots. “This is economics. It’s not the Nobel Peace Prize or something, it’s not like I’ve gone out there and helped people settle a war,” he said.

Their win was announced in Stockholm by Goran Hansson, secretary-general of the Royal Swedish Academy of Sciences, rounding off a week of Nobel Prizes.

The committee said their work showed “why rational bidders tend to place bids below their own best estimate of the common value,” that is, “the value which is uncertain beforehand but, in the end, is the same for everyone”. It also featured an explanation of how bidders try to avoid the so-called “winner’s curse” of overpaying.

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