I have noted in various places that I could not make a forecast this year on the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel because of all the turbulence on so many fronts going on. So it occurred to me that the committee might avoid political controversy by going technical, although I thought it more likely they would give it for something in econometrics. But this year's award was clearlyi in the works after Jean Tirole and Alvin Roth got theirs. The real question for this one was which of the "Gang of Four," David Kreps, Paul Milgrom, John Roberts, and Robert B. Wilson, who coauthored the super important game theory paper on reputation effects, allowing for cooperation over time in prisoner's dilemma and other games, would get it.
In the end it was Milgrom and his major professor Wilson, leaving Kreps and Roberts in the dust. It is given for their work on helping set up the FCC spectrum auctions, something practical for these theoreticians to do. Milgrom is the giant of this group, withover 100,000 google scholar citations and a long list of other major accomplishments, such as the no-trade theorem, and things even in macro and economic history. But Wilson has substantially fewer google scholar citations than either Kreps or Roberts. They both have about 50,000 while Wilson is just over half that, despite being older than any of these others. So it was Wilson's work with Milgrom on the spectrum auction that got him to join Milgrom for the trip to Stockholm.
This is a non-controversial, almost boring, and certainly apolitical award, the committee playing it safe in this tumultuous year.
This is upsetting for the same reason that the award to Diamond et.al.was. Just as Diamond did so much more than just search theory, and is really one of the greatest theorists ever, so with the Gang of Four -- they did much more than auction theory. The paper Barkley mentions is hugely important, showing how cooperation can be achieved in a finitely-repeated, with the number of repetitions sufficiently high, PD, when we add just a dollop of incomplete information.
By the way, Milgrom and Roberts did a textbook, Economics, Organization and Markets -- I may have the title wrong - in 1990 (never a new edition, unfortunately) that may be the best single thing to read to see the huge implications of taking incomplete information into account -- how it changes everything!
Ps: its nearest rival (the M+R text)--even today--, and a nice complement, is Sam Bowles' micro text.
So, if you are ever think you might get a Nobel prize, it might be a good idea to keep your cell phone on and charged. Here is a link that shows Milgrom learning that he won the Nobel from Wilson in the early morning hours - on a video of sorts:
Oct. 12, 2020, 6:17 PM EDT / Updated Oct. 13, 2020, 4:46 AM EDT
By Doha Madani
The reaction of a Stanford professor who was named a Nobel Prize-winner in economics was captured early Monday for the world thanks to a doorbell camera and a persistent colleague.
The Nobel Committee apparently had some trouble contacting Paul Milgrom to let him know the winning news, so his neighbor and fellow winner, Robert Wilson, took matters into his own hands. Wilson knocked on Milgrom’s door about 2:15 a.m. to get his colleague’s attention, according to Stanford University.
The prestigious California school posted a video from Milgrom’s Nest doorbell camera to its Twitter account Monday. Wilson knocked and rang the bell several times before Milgrom seemingly woke up. The exchange is heard through the doorbell's intercom.
“Paul? It’s Bob Wilson,” he said. “You’ve won the Nobel.”
“Wow,” Milgrom responded.
Milgrom's wife, who is currently in Stockholm, got the notification on her phone when Wilson rang their doorbell and was able to see it live, the university said.
Milgrom and Wilson were both honored for improvements to auction theory and inventions of new auction formats, Secretary General Göran Hansson of the Royal Swedish Academy of Sciences said Monday.
Milgrom's work included the analysis of bidding strategies to determine how the format of an auction can give the seller higher expected revenue as bidders gauge the private value others place on the item on sale.
Wilson's work led to the theory of a common value, which is the best estimate of what an item is worth that bidders then try to set their offers below to avoid overpaying.
Fake economics great again
Comment on Barkley Rosser on ‘In The Face Of Total Turbulence, Go Totally Conventional For The Nobel Prize’
Barkley Rosser gives his assessment: “But this year's award was clearly in the works after Jean Tirole and Alvin Roth got theirs. The real question for this one was which of the ‘Gang of Four,’ David Kreps, Paul Milgrom, John Roberts, and Robert B. Wilson, who coauthored the super important game theory paper on reputation effects, allowing for cooperation over time in prisoner's dilemma and other games, would get it.”
Clearly, the EconNobel is something economists in U.S. academe feel entitled to. They feel betrayed and even hang themselves if things do not turn out as expected. This happened in 2019 with Martin Weitzman: “Marty Weitzman was the pre-eminent environmental economist of the modern era, which is to say of all times,” (Nordhaus) and he committed suicide ― “depressed at his not getting the Nobel Prize” (Rosser).
There is, obviously, a strong tendency of self-aggrandizement in academic economics. And it seems that the main purpose of the creation of the EconNobel has been to satisfy an urgent personal/national PR need.#1
There would be no problem at all if economics were some nutty sort of talk show and the Swedish monarch would annually proclaim a winner in a glitzy ceremony because he/she has collected more than 100,000 google scholar citations. The problem is that economics claims to be a science, but is NOT.
The lethal defect of economics is that the main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and ALL get the foundational economic concept of profit wrong.#2 Economics is a heap of proto-scientific garbage.
To put improvements of auction theory on the same level with achievements like quantum physics proves a serious lack of scientific sense. Note that economists are supposed to explain how the economy works and they come up with a proposal of how to improve the auction of radio frequency bands.
The EconNobel has always been a fake prize for fake scientists. It has nothing to do with science but is a reward for loyal services in the propagation of oligarchy-approved economics.#3
#1 Philip Mirowski, The Neoliberal Ersatz Nobel Prize
#3 Scrap the EconNobel
Do you want to claim that there should be no spectrum auctions by the US government? Or if you accept that maybe there should be do you deny that the work and input of Milgrom and Wilson was extremely useful both theoretically and practically in getting them set up? Your profit theory would contribute zero to such an effort.
BTW, non-reciipient David Kreps, whom many think should have been included, has put out a statement praising the work of Wilson.
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