The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2020 has been awarded to Paul R. Milgrom and Robert B. Wilson for improvements to auction theory and inventions of new auction formats.
BREAKING NEWS:
The 2020 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded to Paul R. Milgrom and Robert B. Wilson “for improvements to auction theory and inventions of new auction formats.”#NobelPrize pic.twitter.com/tBAblj1xf8
The award was announced by Professor Göran K. Hansson, Secretary-General of the Royal Swedish Academy of Sciences, on 12 October 2020.
Auctions distribute astronomical values between buyers and sellers. This year’s Laureates discovery will benefit the sellers, buyers and taxpayers around the world.
Robert Wilson formulated a theory for the auctions of an object with a common value (uncertain beforehand but the final price is the same for everyone). He showed that the bidders are worried about the winner’s curse (paying too much and losing out) and hence place bids below their own best estimated common value. 
Source: The Royal Swedish Academy of Sciences
Paul Milgrom developed a general theory of auctions that not only allows common values but also private values that vary from bidder to bidder. For this, he analysed different bidding strategies in a number of well-known auction formats, demonstrating that a format will give the seller higher expected revenue when bidders learn more about each other’s estimated values during bidding.
Source: The Royal Swedish Academy of Sciences
Paul R. Milgrom
Paul R. Milgrom was born on April 20, 1948, in Detroit, Michigan. He attended the University of Michigan and received a BA degree. He further attended Stanford University and received an MS and PhD degree.
He is an American economist and is known for Auction theory, Incentive theory and Market design.
Robert B. Wilson
Robert B. Wilson was born on May 16, 1937, in Geneva, Nebraska. He received a BA degree from Harvard College. He further attended Harvard Business School and received an MBA and DBA degree.
He is known for Game theory in industrial organization and sequential quadratic programming
People have always sold things in the auction to the highest bidder and bought them from the person offering the cheapest rate.
Currently, not only household objects, art and antiquities, but also securities, minerals and energy are auctioned. Public procurements can also be conducted as auctions.
Source: The Royal Swedish Academy of Sciences
Auctions were used in Ancient Rome by the lenders to sell the assets they had confiscated from borrowers who were unable to pay their debts.
1- In 1994, the US authorities first used one of their auction formats to sell radio frequencies to telecom operators. Since then, many other countries have followed suit.
2- In the year 1674, the world’s oldest auction house was founded in Stockholms Auktionsverk.
The Royal Swedish Academy of Sciences has awarded the Nobel Prize for Economic Sciences 2020 with 10 million Swedish Kronor. One half of this to be received by Paul R. Milgrom and the other half by Robert B. Wilson.
The Royal Swedish Academy of Sciences
The Royal Swedish Academy of Sciences was founded in 1739. It is an independent organisation with the aim to promote the sciences and strengthen their influence in society. The Academy takes special responsibility for the natural sciences and mathematics, but endeavours to promote the exchange of ideas between various disciplines.
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