Marco Ottaviani, Bocconi Professor of Economics | Courier TV
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The story of the two American professors who won the Nobel Prize in Economics 2020 with auction theory and market benefits. It all started when Wilson, in the 1960s, was a “researcher in applied mathematics and in that field worked on information in auctions. Together with his student, Paul Milgrom, they analyzed the phenomenon of curse of the winnerHe explains Marco Ottaviani, economics professor ofBocconi University. «According to this phenomenon, when you win an auction it means that the others who competed did not consider it appropriate to offer more. This means that the good was probably not worth what the winner thought it was worth. This aspect must be taken into account ». This is a fundamental observation that Wilson and Milgrom then applied to market of radio frequencies. Thanks to the market rules that have helped to design «the market has become more efficient. They are truly schoolmasters who have shown the world howmathematical analysis rigorous can be combined with an important real problem ».