Most people appreciate having their expertise and work acknowledged, but exponentially so when the praise comes from a highly respected Nobel Prize winner.
“I was both thrilled and humbled to have professor Paul Milgrom highlight our joint work in his recent Nobel Prize lecture,” said Bob Day, associate dean for undergraduate programs in the School of Business and a professor of Operations and Information Management.
Milgrom and his colleague, professor Robert Wilson, both of Stanford University, were co-recipients of the Nobel Memorial Prize in Economic Sciences in October 2020. The laureates have studied how auctions work and used their insights to design new auction formats for goods and services that are challenging to sell in traditional ways, such as radio frequencies, securities, minerals, and energy. They are credited with discoveries that have served sellers, buyers, and taxpayers around the globe.
A mutual acquaintance introduced Day to Milgrom years ago, after they separately presented closely related research at various conferences. They soon became collaborators.
“Paul is incredibly supportive of the research community, and really the touching story is how he organized his Nobel Lecture around all the people he worked with through the years,” Day said. “Research is a team sport. I hope that his humble and giving attitude inspires more young researchers to do cutting-edge work, and especially to be bold enough to put theoretical contributions to work in the real world, as Paul has consistently done throughout his career.”
“The paper that Paul and I produced became part of the foundational work on ‘core-selecting’ auctions that balance incentives for truth-telling with revenue considerations when bidders have complex preferences for several interrelated goods,” Day said. “The ideas became part of the ‘Combinatorial Clock Auction’ which has been used in spectrum auctions around the world, where government regulators sell access to bandwidth for cellphone communications.
“We introduced the paper in 2007, and by 2014 auctions using our core-selecting rules had made the governments of the world approximately $20 billion,” he said. “Canada alone made over $5 billion in 2014.”
When Day helped create an Auctions and Market Design research group through the INFORMS international research institute, Milgrom joined the Board of Advisors and gave an online research seminar for the group last month.
Day continues to research new questions in the design of auctions and other market mechanisms, but his work with Milgrom will be hard to match in terms of real-world impact.
“I help organize conferences and journal publications for a small but growing community in auctions and market design, and I feel like we were all winners when the Nobel committee announced Milgrom and Wilson’s award this year,” Day said.