Alumnus Robert B. Wilson Shares Economics Nobel

A scholar and his student share their field’s best-known honor.

The Harvard University Seal

Robert B. Wilson ’59, M.B.A. ’61, D.B.A. ’63, and his former Stanford doctoral student Paul R. Milgrom have been awarded the 2020 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel “for improvements to auction theory and inventions of new auction formats.” Wilson is Adams Distinguished Professor of management emeritus at Stanford, where he joined the faculty in 1964. Milgrom is Ely professor of humanities and sciences at Stanford. 

In its press release, the Nobel committee stated: “This year’s Laureates, Paul Milgrom and Robert Wilson, have studied how auctions work. They have also used their insights to design new auction formats for goods and services that are difficult to sell in a traditional way, such as radio frequencies. Their discoveries have benefitted sellers, buyers and taxpayers around the world.”

Robert Wilson developed the theory for auctions of objects with a common value – a value which is uncertain beforehand but, in the end, is the same for everyone. Examples include the future value of radio frequencies or the volume of minerals in a particular area. Wilson showed why rational bidders tend to place bids below their own best estimate of the common value: they are worried about the winner’s curse – that is, about paying too much and losing out.

Paul Milgrom formulated a more general theory of auctions that not only allows common values, but also private values that vary from bidder to bidder. He analysed the 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.

Wilson is the second member of the University community to receive Nobel honors this year, after Jennifer Doudna, Ph.D. ’89, shared the Nobel Prize in chemistry last week. Among his other credentials, he has served as an affiliated faculty member of Harvard Law School’s Program on Negotiation. Williston professor of law Robert Mnookin, director of the Harvard Negotiation Research Project, worked with Wilson at Stanford years ago and has described him as someone from whom he learned “how the insights of economics, social psychology, cognitive psychology, and game theory could all provide useful prisms for better understanding negotiation.”

Read more articles by Jean Martin

You might also like

Harvard Football: Harvard 59, Holy Cross 24

Another week, another blowout, this one against an in-state rival

Trump Says a Deal with Harvard Is Close

Administration squeezes Harvard finances, and a federal judge blasts deportation efforts as unconstitutional.

Harvard Football: Harvard 41, Brown 7

The Crimson assertively avenge last year’s loss to their Ivy rival.

Most popular

What Trump Means for John Roberts’s Legacy

Executive power is on the docket at the Supreme Court.

“AI Anxiety”

The Undergraduate on the uneasy collision of technology and writing

How Maga Went Mainstream at Harvard

Trump, TikTok, and the pandemic are reshaping Gen Z politics.

Explore More From Current Issue

Illustration of scientists injecting large syringe with mitochondria into human heart.

Do Mitochondria Hold the Power to Heal?

From Alzheimer’s to cancer, this tiny organelle might expand treatment options. 

David McCord in suit reading a book at cluttered wooden desk in office filled with framed art and shelves.

The Pump Celebrates Its 85th Birthday

Giving Harvard traditions their due 

Colorful illustration of woman multitasking with laptop, baby bottle, toy, and checklist.

Motherhood and Ambition In a Pronatalist World

Gen Z is confronting the age-old question of balance—with a new twist.