American Duo Wins Nobel Economics Prize for Work on Auctions

US economists Paul Milgrom and Robert Wilson won the Nobel Economics Prize. (AFP)
US economists Paul Milgrom and Robert Wilson won the Nobel Economics Prize. (AFP)
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American Duo Wins Nobel Economics Prize for Work on Auctions

US economists Paul Milgrom and Robert Wilson won the Nobel Economics Prize. (AFP)
US economists Paul Milgrom and Robert Wilson won the Nobel Economics Prize. (AFP)

US economists Paul Milgrom and Robert Wilson won the Nobel Economics Prize on Monday for work on commercial auctions, including for goods and services difficult to sell in traditional ways such as radio frequencies, the Nobel Committee said.

The Royal Swedish Academy of Sciences noted that the discoveries by Milgrom, 72, and Wilson, 83, "have benefitted sellers, buyers and taxpayers around the world," it said in a statement.

"Auctions affect all of us at every level. Moreover, they are becoming increasingly common and increasingly complicated," the academy said, listing examples such as flexible electricity prices set by daily auctions and countries raising funds through government bond auctions.

Milgrom and Wilson's work "gives us a better understanding of how we should design auctions," jury member Peter Fredriksson told AFP.

‘Winner's curse’
Wilson was spotlighted for developing a theory on auctions focusing on a common value, such as the future value of radio frequencies, or the rights to extract minerals in a particular area.

This common value "is uncertain beforehand but, in the end, is the same for everyone," according to the academy.

Wilson's work during 1960s and 1970s showed why bidders tended to bid under what they actually thought the good was worth.

The answer was that they feared the "winner's curse," or winning the auction but paying too much.

Milgrom then came up with a more general theory of auctions by analyzing bidding strategies in different auction forms, publishing his seminal papers around 1980.

Both professors at Stanford in the United States, Wilson was Milgrom's thesis advisor and they also live on the same street.

The academy noted that while "people have always sold things to the highest bidder," societies have also had to allocate "ever more complex objects... such as landing slots and radio frequencies" among users.

"In response, Milgrom and Wilson invented new formats for auctioning off many interrelated objects simultaneously, on behalf of a seller motivated by broad societal benefit rather than maximal revenue," the academy said.

They used their theories to create a new auction model that was put into practice by US authorities in 1994 to sell radio frequencies to telecom operators, and are applied by governments around the world in the current rollout of 5G networks.

The winners will share the prize sum of 10 million Swedish kronor (about $1.1 million, 950,000 euros).

Speaking to reporters in Stockholm via a telephone link, Wilson said the announcement had been "very happy news," conceding that despite his research focus he himself had "never participated in an auction".

However, he quickly had to retract his statement. "My wife is pointing out that we bought ski boots on eBay, I guess that was an auction," Wilson said.

David Ettinger, a professor of economics at the Paris Dauphine University, told AFP that while the word auction might conjure up images of auction houses like Sotheby's and Christie's, they are in fact ubiquitous, found in everything from online advertising to government contracts.

"Auctions have fascinated game theorists because it's rare to have applications in economic life where the terms are so clearly laid out. Negotiation is fuzzy, whereas in an auction... you make a bid and the best one wins," Ettinger said.



7 California Men Charged in 'Largest Jewelry Heist' in US History

One of the rings stolen in the heist (FBI handout)
One of the rings stolen in the heist (FBI handout)
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7 California Men Charged in 'Largest Jewelry Heist' in US History

One of the rings stolen in the heist (FBI handout)
One of the rings stolen in the heist (FBI handout)

Seven men from California have been charged in the "largest jewelry heist in US history,” involving the theft of $100 million worth of gold, gems, and luxury watches, according to BBC.

The heist has been a mystery in California for nearly three years after a Brinks company truck transporting the jewelry was robbed at a remote stop as one driver slept inside, and another was having a meal.

The suspects tracked the truck as it left a jewelry show near San Francisco with 73 bags, officials said.

The next morning, they stole 24 bags when the truck was at a rest stop in Lebec, California, according to court documents.

The indictment does not say how they gained access to the truck.

Announcing the charges on Tuesday, the Department of Justice (DOJ) alleged that one of the suspects scouted a jewelry show near San Francisco for several days in 2022 and then robbed the truck with his accomplices in the early hours of 11 July.

A copy of the indictment says the defendants watched as a Brinks truck was loaded with jewels and then followed the truck for approximately 300 miles (485 km) from San Mateo to Lebec, California.

While the truck was parked at a stop in Lebec, the suspects allegedly stole 24 bags containing about $100 million in jewelry, the court document says.

Officials said the robbers did not use any weapons during the heist.

The robbery was discovered when the driver returned to the vehicle and saw that the exterior padlock was missing. Authorities believe it was sawed off.

The truck was on its way to another jewelry show in Pasadena, California.

Some of the jewels were recovered during the execution of search warrants on 16 June, according to a DOJ statement.

Jerry Kroll, an attorney who represents some of the jewelers whose merchandise was stolen, told the BBC he did not know how much had been recovered.