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.



Indonesia: Residents Wear Masks as Volcanic Ash Blankets Villages Near Erupting Volcano

A handout photo made available by Indonesia's Volcanology and Geological Hazard Mitigation Center (PVMBG) shows Mount Lewitobi Lake-laki spewing ash during its eruption in East Flores, Indonesia, 07 July 2025. EPA/PVMBG HANDOUT
A handout photo made available by Indonesia's Volcanology and Geological Hazard Mitigation Center (PVMBG) shows Mount Lewitobi Lake-laki spewing ash during its eruption in East Flores, Indonesia, 07 July 2025. EPA/PVMBG HANDOUT
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Indonesia: Residents Wear Masks as Volcanic Ash Blankets Villages Near Erupting Volcano

A handout photo made available by Indonesia's Volcanology and Geological Hazard Mitigation Center (PVMBG) shows Mount Lewitobi Lake-laki spewing ash during its eruption in East Flores, Indonesia, 07 July 2025. EPA/PVMBG HANDOUT
A handout photo made available by Indonesia's Volcanology and Geological Hazard Mitigation Center (PVMBG) shows Mount Lewitobi Lake-laki spewing ash during its eruption in East Flores, Indonesia, 07 July 2025. EPA/PVMBG HANDOUT

Residents wore masks to protect themselves from thick volcanic ash that blanketed roads and green rice fields in villages in south-central Indonesia as rumbling Mount Lewotobi Laki Laki erupted Tuesday for a second straight day.

The eruption at dawn sent lava and clouds of ash up to 4 kilometers (2.4 miles) high. That followed an eruption around midday Monday that sent a column of volcanic materials up to 18 kilometers (11 miles) into the sky and an evening burst that spewed lava and send volcanic ash as high as 13 kilometers (8 miles) into the air, The Associated Press reported.

Photos and videos circulating on social media showed terrified residents ran for their lives under the rain of ash and gravel and motorists struggled to drive motorbikes and cars in the reduced visibility as the ash clouds from Monday's eruption expanded into a mushroom shape.

No casualties have been reported from the latest eruptions of the volcano that has been at the highest alert level since June 18 when its no-go zone was expanded to a 7-kilometer (4.3-mile) radius, said Abdul Muhari, the National Disaster Mitigation Agency spokesperson.

“People around the volcano have increasingly understood how to minimize the impact of disaster risks as eruptions became more frequent since the end of 2023,” Muhari said in a statement.

The eruptions of the volcano on Flores Island affected more than 10,000 people in 10 villages in East Flores and Sikka districts, according to initial assessments by the local disaster management agency.

Thick volcanic ash and rocks were reported to have fallen in villages of Nawakote, Klantanio, Hokeng Jaya, Boru, Pululera and Wulanggitang, where roads and green rice fields were transformed into grey thick mud and rocks, said Very Awales, an public information official at Sikka district administration, adding that schools were closed in those affected areas since Monday to protect students and staff from various hazards due to volcanic activities.

“The smell of sulfur and ash hung so thickly in the air that breathing was painful,” Awales said.

Authorities distributed 50,000 masks and urged residents to limit outdoor activities to protect themselves from volcanic materials. Residents were also urged to be vigilant about heavy rainfall that could trigger lava flows in rivers originating from the volcano.

The eruption of Lewotobi Laki Laki followed its eruption in November 2024 that killed nine people and injured dozens.

The Geology Agency recorded an avalanche of searing gas clouds mixed with rocks and lava traveling up to 5 kilometers (3 miles) down the slopes of the 1,584-meter (5,197-foot) mountain Monday. Observations from drones showed lava filling the crater, indicating deep movement of magma that set off volcanic earthquakes. Volcanic materials, including hot thumb-size gravel, were thrown up to 8 kilometers (5 miles) from the crater.

Muhari said two airports in the cities of Maumere and Larantuka in East Nusa Tenggara province remained closed Tuesday.

Dozens of flights to and from the Ngurah Rai international airport on the resort island of Bali were delayed or canceled, but airport spokesperson Ahmad Syaugi Shahab said the airport was running normally despite the cancellations, as monitoring showed the volcanic ash had not affected Bali’s airspace.