Mr. Milgrom and Mr. Wilson came up with a new format that allowed the simultaneous auctioning of the many geographic areas of the radio spectrum across various bidders, starting with low prices and allowing repeated bids. The F.C.C. adopted the approach in 1994, and found that it allowed them to dole out the radio space while also raising far more money.
The Milgrom and Wilson approach met with such success that many other countries, including Britain, Canada, and Spain, went on to adopt it.
The economists “started out with fundamental theory and later used their results in practical applications, which have spread globally,” Peter Fredriksson, chairman of the prize committee, said in a release accompanying the announcement. “Their discoveries are of great benefit to society.”
Auction theory can have even broader application, the winners said during a Stanford news conference on Monday. Mr. Wilson cited his work on diamond pricing, among other examples, while Mr. Milgrom pointed to the challenge in allocating respirators early in the pandemic crisis. He said that the bottleneck, which forced states to chaotically bid against one another without expanding the supply of ventilators, illustrated how market design matters.
“We need well-thought out systems, and part of what we do in market design is try to think about all of the aspects of systems — competition, distribution, solving hard complex problems,” Mr. Milgrom said during a news conference held by Stanford.
Who are the winners?
Mr. Wilson was born in 1937 in Geneva, Neb., earned both his bachelor’s and graduate degrees from Harvard University, and he is now a professor emeritus at Stanford University.
Mr. Milgrom was born in 1948 in Detroit. He completed his bachelor’s at the University of Michigan and his graduate education at Stanford, where he received a doctorate in 1979 and where he is now a professor. He, like Mr. Roth, was a doctoral student of Mr. Wilson’s.