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Two US economists win Nobel economics prize for 'improvements to auction theory'

Jonathan NACKSTRAND The prizes named after Alfred Nobel have been awarded since 1901

That's Bob Wilson, ringing Paul Milgrom's doorbell and knocking on his door.

STOCKHOLM (AP) - Americans Paul R. Milgrom and Robert B. Wilson won the Nobel Prize in economics on Monday for "improvements to auction theory and inventions of new auction formats".

Wilson, 83, and Milgrom, 72, happened to be neighbours. "She got to watch live as Wilson told Milgrom he'd won the #NobelPrize", the tweet read.

That was when fellow victor Robert Wilson made a decision to take the matter into his own hands.

New auction formats have been used for radio spectra, fishing quotas, aircraft landing slots and emissions allowances.

They also tackled the "snake in the grass strategy", Wilson said. "You've won the Nobel Prize".

Since its establishment in 1969, it has been awarded 51 times and is now widely considered one of the Nobel prizes.

Before Wilson's work in the 1960s and 1970s, research on auctions focused on each person's private or subjective evaluation of the goods or services for sale.

According to the Royal Swedish Academy of Sciences, the economists invented new formats for auctioning many interrelated objects on behalf of a seller motivated by doing good for society rather than simply achieving the highest price possible.

"The committee acknowledged Wilson's work revealed" why logical bidders are inclined to put bids below their best estimate of the frequent worth", that's, "the worth that's uncertain ahead however, in the long run, is the same for everybody".

Speaking to reporters in Stockholm by phone after learning of his win, Wilson struggled to think of a recent auction he himself had participated in. But then added: "My wife points out to me that we bought ski boots on eBay".

It's not the first time the call from Stockholm has been missed by an American victor. The pair will cut up an award of 10 million Swedish krona, or about $1.1 million.

The Stanford University duo received the Nobel prize in economics for helping make auctions run more efficiently.

They were awarded for their experimental approach to alleviating global poverty.

The literature prize was awarded to American poet Louise Gluck on Thursday for her "candid and uncompromising" work. The Norwegian Nobel Committee has made a decision to award the 2020 Nobel Peace Prize to the World Food Programme (WFP) on Friday Oct. 9, 2020.