Kreps, Milgrom, Wilson 2018 John J. Carty Award
David M. Kreps, Stanford University Graduate School of Business, Paul R. Milgrom, Stanford University Department of Economics, and Robert B. Wilson, Stanford University Graduate School of Business, jointly received the 2018 John J. Carty Award for the Advancement of Science.
Kreps and Wilson provided a framework, known as sequential equilibrium, for modeling dynamic effects in economics. All three of the award winners, together with other collaborators and in particular D. John Roberts, employed these techniques to model and study reputation and collusion, both of which have broad applications in macroeconomics, industrial organization, and labor economics.
Later, the entire modern telecommunications industry arose out of an auction format developed by Milgrom and Wilson, along with Preston McAfee, for the 1994 radio spectrum auctions by the Federal Communications Commission. The simultaneous ascending auction format, in which each bidder can bid for multiple licenses over a series of rounds so long as it remains “sufficiently active,” has since been used around the world to allocate hundreds of billions of dollars’ worth of wireless licenses. Variations of the format have also been applied to numerous other industries, including electricity markets and various commodity markets.
The three award winners, with collaborators and alone, have contributed broadly to other topics in economics: Kreps has done foundational work in choice theory and financial market theory; Milgrom, in the theories of market microstructure and the principal-agent problem; and Wilson, in nonlinear pricing and utility regulation, as well as the foundations of dynamic equilibria.
The John J. Carty Award for the Advancement of Science is awarded every two years, to recognize noteworthy and distinguished accomplishments. In 2018 the award is presented in the field of economics. The award is presented with a medal and a $25,000 prize.
