Paul R. Milgrom

Working as an economist, I study the ways in which limited resources are allocated by markets, governments and the internal processes of firms. For market processes, I study auctions and how they can be improved. The simultaneous multiple round auction, which I invented with my colleagues Robert Wilson and Preston McAfee, enables a more rational allocation of multiple items by enabling bidders to substitute among licenses based on the demand information that emerges during the course of the process. This performance of this design, which is now used around the world for the allocation of radio spectrum licenses, deteriorates when goods may sometimes be complements instead of substitutes. This may potentially be solved by a new combinatorial auction design, which I am developing in my current research. For organizations, I have studied how incentives for some tasks can unexpectedly affect the performance of others by causing people to divert resources and how improved communications that coordinate some activities sometimes also create new opportunities for people to influence unrelated decisions, leading to a waste of resources. I have also studied the emergence of private law and how restraints on medieval princes led to improved efficiency of trade.