The BBVA Foundation announced in Madrid today that Paul Milgrom has won the 2012 Frontiers of Knowledge Award in the area of economics, finance and management. According to the prize jury, the prize was awarded “for his seminal contributions to an unusually wide range of fields of economics including auctions, market design, contracts and incentives, industrial economics, economics of organizations, finance, and game theory.” BBVA’s award announcement can be found on their website in Spanish or English and its interview with Paul is available online here.
The prize ceremony will take place on June 20, 2013, in Madrid, Spain.
The Frontiers of Knowledge and Culture Awards have been given since 2008. Each award comes with a €400,000 cash prize, a diploma and commemorative artwork. Past winners in this category of economics, finance and management include Jean Tirole, Andreu Mas-Colell, Hugo Sonnenschein, Lars Peter Hansen, and Angus Deaton.
The jury in this category was chaired by Kenneth J. Arrow, Nobel laureate in Economics and Professor of Economics and of Management Science and Engineering, Emeritus, at Stanford University (United States), with José Manuel González-Páramo, Visiting Professor at IESE Business School (Spain), acting as secretary. Remaining members were Andreu Mas-Colell, Professor of Economics at Pompeu Fabra University (Spain); Joel Mokyr, Robert H. Strotz Professor of Arts and Sciences and Professor of Economics at Northwestern University (United States); Albrecht Ritschl, Professor of Economic History at the London School of Economics (United Kingdom); and Jean Tirole, Chairman of the Board of the Fondation Jean-Jacques Laffont at Toulouse School of Economics (TSE)and Scientific Director of Toulouse University’s Institute for Industrial Economics (France).
The full jury citation reads as follows:
Paul Milgrom has made seminal contributions to an unusually wide range of fields of economics including auctions, market design, contracts and incentives, industrial economics, economics of organizations, finance, and game theory.
His work on auction theory is probably his best-known. He has explored issues of design, bidding and outcomes for auctions with different rules. He designed auctions for multiple complementary items, with an eye towards practical applications such as frequency spectrum auctions. Professor Milgrom’s research in industrial organization includes influential studies on limit pricing, entry deterrence, predation, and advertising. In addition, Milgrom has added important novel insights to finance, particularly in connection to speculative trading and market micro-structure. The common theme of his works on auctions, industrial strategies, and financial markets is that economic actors infer from prices and other observables information about the fundamental market values.
He has also contributed to agency theory by describing conditions under which linear incentives are optimal, and by developing a tractable model of multitask agency relationships. His work on contract and organization theory has been very influential in management science. Finally, Professor Milgrom has contributed to mathematical economics and game theory, with studies on reputation and adaptive learning.