Putting Auction Theory to Work - 2020 Nobel Prize in Economic Sciences

Abstract

This year’s Nobel Prize in Economic Sciences went to Paul MILGROM and Robert WILSON “for improvements to auction theory and inventions of new auction formats” —  to quote the Prize committee. Why do auctions matter? — Because auctions are everywhere, and they are behind the sale of all sorts of things from everyday goods (eBay), Leonardo da Vinci’s mysterious masterpiece (Christie’s), to billion-dollar worth of online advertising slots (Google) and public properties like lands, treasury bonds, and radio spectrum frequencies. Milgrom and Wilson have made groundbreaking contributions to developing auction theory. Most prominently, they identified the paradoxical “Winner’s Curse” in auctions, analyzed how the Curse could affect an auction’s performance, and proposed ways to alleviate or even lift the Curse. Going beyond pure theory, Milgrom and Wilson have also made significant contributions to improving auctions in the real world. Most remarkably, they designed the Simultaneous Multiple Round Auction for the US Federal Communications Commission's to sell radio spectrum frequencies. Their design worked so well that the spectrum auctions generated some $78 billion for the US government in 1994-2012, far beyond the initial estimates.

About the speakers

Prof. Huang Yangguang obtained his BA in Economics from Sun Yat-sen University, MA in Economic Policy from Boston University and PhD in Economics from the University of Washington in 2009, 2011 and 2016 respectively. He then joined the Hong Kong University of Science and Technology and is currently an Assistant Professor in the Department of Economics. He is also the Faculty Associate in the Division of Public Policy and the Institute for Emerging Market Studies.

Prof. Huang’s research interests include industrial organization, applied microeconomics, applied econometrics and digital economy.

Prof. Wu Qinggong received his BA in Mathematics from Dartmouth College in 2009 and his PhD in Economics from the University of Michigan in 2016. Prior to joining the Hong Kong University of Science and Technology (HKUST), he was a faculty at the Chinese University of Hong Kong in 2016-2019. He is currently an Assistant Professor in the Department of Economics at HKUST.

Prof. Wu’s works focus on microeconomics, game theory and political economy.