Researcher

Paul Milgrom

Profile

Paul Milgrom is an American economist and Shirley and Leonard Elman Professor of Humanities and Sciences in Economics at Stanford University. He was awarded the 2020 Nobel Prize in Economic Sciences, shared with Robert Wilson, for improvements to auction theory and inventions of new auction formats. Milgrom is one of the founders of modern auction theory. His early research with Wilson developed the linkage principle and the theory of common-value auctions, explaining why bidders shade their bids and how auction design affects revenue and efficiency. With Robert Weber, he developed a general theory of ascending-bid auctions that established many properties of the widely used English auction. Beyond theory, Milgrom has had extraordinary practical impact on auction design. Together with Wilson, he designed the simultaneous multi-round ascending (SMRA) auction used by the FCC for its landmark 1994 spectrum auctions—widely regarded as one of the most successful economic policy implementations of theory, generating billions in government revenue and allocating spectrum efficiently to telecommunications companies. He also designed the incentive auction used by the FCC in 2017, a novel two-sided design for repurposing broadcast television spectrum for wireless broadband, and has advised on spectrum auction design in dozens of countries. Milgrom co-founded Auctionomics and Power Auctions to commercialize auction design consulting. His textbook Putting Auction Theory to Work has become a standard reference in mechanism design.

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