Two American economists won the Nobel Prize for improving how auctions work, research that underlies much of today’s economy — from the way Google sells advertising to the way telecoms companies acquire airwaves from the government.
The discoveries of Paul R. Milgrom and Robert B. Wilson, both of Stanford University, “have benefitted sellers, buyers and taxpayers around the world,” the Nobel Committee said.
Wilson was once Milgrom’s Ph.D. adviser, and the two also happen to be neighbors. Reached by phone at his home in California, Milgrom said he received news of their win
For evidence that mainstream economists are taking the challenge of covid-19 seriously, look no further than the comments of Gabriela Ramos, chief of staff at the OECD, at a conference in April: “For many institutions, including the OECD, which has traditionally emphasized the need for efficiency, it is not easy to accept that we should build slack, buffers, and spare capacity into our systems…but as we now see this is literally a question of life or death.”
This is the first plank of the profession’s response to the pandemic: questioning whether national economies, individual companies, and markets should be optimized to maximize return on capital, or to ensure resilience in the face of a crisis.
The second clear trend concerns methodology and a willingness for economists to move away from strict mathematical models. “The pandemic has, in many cases, decreased our reliance on traditional economic metrics such as GDP,” says