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.



Billy Crystal, Mandy Moore Among Those who Lost Homes in Los Angeles Fires

A blackened US flag flies above a charred structure after the passage of the Palisades Fire in Pacific Palisades, California, on January 8, 2025. (Photo by AGUSTIN PAULLIER / AFP)
A blackened US flag flies above a charred structure after the passage of the Palisades Fire in Pacific Palisades, California, on January 8, 2025. (Photo by AGUSTIN PAULLIER / AFP)
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Billy Crystal, Mandy Moore Among Those who Lost Homes in Los Angeles Fires

A blackened US flag flies above a charred structure after the passage of the Palisades Fire in Pacific Palisades, California, on January 8, 2025. (Photo by AGUSTIN PAULLIER / AFP)
A blackened US flag flies above a charred structure after the passage of the Palisades Fire in Pacific Palisades, California, on January 8, 2025. (Photo by AGUSTIN PAULLIER / AFP)

Fires burning in and around Los Angeles have claimed the homes of numerous celebrities, including Billy Crystal, Mandy Moore and Paris Hilton and led to sweeping disruptions of entertainment events.
Three awards ceremonies planned for this weekend have been postponed. Next week's Oscar nominations have been delayed. And tens of thousands of Angelenos are displaced and awaiting word Thursday on whether their homes survived the flames — some of them the city's most famous denizens, The Associated Press reported.
More than 1,900 structures have been destroyed and the number is expected to increase. More than 130,000 people are also under evacuation orders in the metropolitan area, from the Pacific Coast inland to Pasadena, a number that continues to shift as new fires erupt.
Late Wednesday, a fire in the Hollywood Hills was scorching the hills near the famed Hollywood Bowl and Dolby Theatre, which is the home of the Academy Awards.
Here are how the fires are impacting celebrities and the Los Angeles entertainment industry:
Stars whose homes have burned in the fires Celebrities like Crystal and his wife, Janice, were sharing memories of the homes they lost.
The Crystals lost the home in the Pacific Palisades neighborhood that they lived in for 45 years.
“Janice and I lived in our home since 1979. We raised our children and grandchildren here. Every inch of our house was filled with love. Beautiful memories that can’t be taken away. We are heartbroken of course but with the love of our children and friends we will get through this,” the Crystals wrote in the statement.
Mandy Moore lost her home in the Altadena neighborhood roughly 30 miles east of the Palisades.
“Honestly, I’m in shock and feeling numb for all so many have lost, including my family. My children’s school is gone. Our favorite restaurants, leveled. So many friends and loved ones have lost everything too,” Moore wrote on Instagram in a post that included video of devastated streets in the foothill suburb.
“Our community is broken but we will be here to rebuild together. Sending love to all affected and on the front lines trying to get this under control,” Moore wrote.
Hilton posted a news video clip on Instagram and said it included footage of her destroyed home in Malibu. “This home was where we built so many precious memories. It’s where Phoenix took his first steps and where we dreamed of building a lifetime of memories with London,” she said, referencing her young children."
Elwes, the star of “The Princess Bride” and numerous other films, wrote on Instagram Wednesday that his family was safe but their home had burned in the coastal Palisades fire. “Sadly we did lose our home but we are grateful to have survived this truly devastating fire,” Elwes wrote.
The blazes have thrown Hollywood's carefully orchestrated awards season into disarray.
Awards ceremonies planned for this weekend have been postponed due to the fires. The AFI Awards, which were set to honor “Wicked,” “Anora” and other awards season contenders, had been scheduled for Friday.
The AARP Movies for Grownups Awards, which honor movies and television shows that resonate with older audiences, were set for Friday but have been postponed.
The Critics Choice Awards, originally scheduled for Sunday, have been postponed until Feb. 26.
Each of the shows feature projects that are looking for any advantage they can get in the Oscar race and were scheduled during the Academy Awards voting window.
The Oscar nominations are also being delayed two days to Jan. 19 and the film academy has extended the voting window to accommodate members affected by the fires.