At the recent meeting of the American Economic Association, Paul Milgrom was featured alongside Atila Abdulkadiroglu explaining the role of the "Economist as Engineer." His videotaped presentation about the engineering challenges in designing the US incentive auction is featured here on the AEA website.
Professor Robert Wilson (Paul's PhD advisor) has been selected as the winner of the 8th BBVA Foundation "Frontiers of Knowledge" Award, in the category of Economics, Finance and Management. The award carries a monetary prize of €400,000. In the short version, Wilson was honored for "pioneering contributions to the analysis of strategic interactions when economic agents have limited and different information about their environment.” In the view of the jury, “his research on auctions, electricity pricing, reputation and dynamic interactions under such informational circumstances was groundbreaking and pervades economic analysis to this day.” A full description of his contribution can be found here.
Douglass North, who died on November 23, 1995, was one of the great economists of modern times. Despite being a careful empirical research, Doug was impatient with what he considered to be the excessive reliance of many economists on formal mathematical models. I was honored to be Doug's collaborator on a joint paper with Barry Weingast, which used formal formal modeling to study the institutions that supported trade before the emergence of states that could enforce contracts. (See "The Role of Institutions in the Revival of Trade: The Medieval Law Merchant" in the publications section of this website.) In our collaboration, I emphasized that the role of formalisms was to highlight the assumptions in any argument and to be sure that the conclusions followed from those. Along with Barry Weingast, we sought to write a paper that was simple, stayed focused on what was important, and made arguments that were clear and tight.
Barry Weingast and Margaret Levi have written an obituary about Doug for the Washington Post. It includes a friendly paragraph about Doug's interactions with me, which I quote below:
"Doug revealed yet again at Stanford his rare knack for listening to the ideas of others. Never a fan of the growing mathematization of economics, Doug admitted that he didn’t like all the game theory being used at Stanford, but since Stanford was known for it, he wanted to learn more. They met with Paul Milgrom to discuss these issues. Paul impressed Doug, not only for his brilliance, but for his attitude about economics and research. In discussing the role of mathematics in economics, Paul said, “first we get the economics right, then we build the models.” This suited Doug’s philosophy, and the three collaborated to produce a paper on the medieval “Law Merchant” (1990). This paper sought to understand the role of law and judges prior to the rise of the nation state with an ability to enforce laws across a larger territory; it also demonstrated how institutions could be emerge endogenously as part of the equilibrium of a game."
He will be sorely missed.
On November 18, 2014, Paul Milgrom delivered the Arrow Lecture at Columbia University in honor of Columbia’s most famous graduate: Kenneth Arrow. A book series in Arrow’s honor was also launched, with books written by some of the greatest economic theorists of the modern era. All in the room acknowledged their intellectual debts to Kenneth Arrow, whose foundational contributions to social choice theory, general equilibrium theory, health economics, and the economics of innovation, to name just a few, have forever changed the form of economic analysis.
Paul videotaped lectured about “Prices and Decentralization without Convexity,” and was lucky to have Arrow, along with another Nobel laureate, Joseph Stiglitz and operations research Jay Sethuraman, provide discussions afterwards. The presentation emphasized some of the theoretical advances that provide the foundation for design innovations for the US “incentive auction,” which will organize to the reassignment of the 600MHz band from its current use in television broadcasting to a new use in mobile broadband.