RG

IN CONTEXT

FOCUS

Decision making

KEY THINKERS

William Vickrey (1914–96)

Paul Milgrom (1948–)

Roger Myerson (1951–)

BEFORE

1951 US mathematician John Nash develops a concept of equilibrium in games, which becomes a tenet of auction theory.

1961 Canadian economist William Vickrey uses game theory to analyze auctions.

AFTER

1971 It is shown that oil companies bidding for drilling leases may not be aware of the “winner’s curse.”

1982 US economists Paul Milgrom and Robert J. Weber show that when bidders know their competitors’ valuations, an “English auction” gives the best price for the seller.

Auctions have been around for a long time, but economists have only ...

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