The Nobel prize for economics rewards advances in auction theory

中标 Winning bids-书迷号

IN 1991 ALVIN ROTH, who in 2012 would share the Nobel prize for economics, was asked how the discipline might change over the century to come. “In the long term”, he wrote, “the real test of our success will be not merely how well we understand the general principles which govern economic interactions, but how well we can bring this knowledge to bear on practical questions of microeconomic engineering.” Sweden’s Royal Academy of Science seems to agree. On October 12th it gave this year’s Nobel prize to Paul Milgrom and Robert Wilson, both of Stanford University, for their work on auction theory and design. Their work epitomises economics as engineering.
一九九一年,阿尔文·罗斯(Alvin Roth,2012年诺贝尔经济学奖得主之一)被问起未来一个世纪经济学将如何变化。“长远看来,”他写道,“对成功的真正考验不仅在于我们能在多大程度上理解支配经济相互作用的一般性原则,还在于我们能在多大程度上把这些知识运用到微观经济工程的实际问题上。”瑞典皇家科学院似乎认同这一点。10月12日,它把今年的诺贝尔经济学奖颁给了斯坦福大学的保罗·米尔格罗姆(Paul Milgrom)和罗伯特·威尔逊(Robert Wilson),以表彰他们在拍卖理论和设计上的研究。这一研究成果代表了经济学的工程学视角。

Auctions are an ancient mechanism for selling valuable commodities, from fine art to a fisherman’s catch. A few, simple forms of auction have been dominant over time. In an English auction, ascending bids are made until a winner remains; in the Dutch variety, a high opening price is set and is reduced until a bidder is found. Yet as their use has expanded, auctions have become more complex, and economists have taken a keener interest. In the 1960s William Vickrey, who shared the Nobel in 1996, developed what became known as auction theory. He assessed bidders’ optimal strategies and studied the revenue and efficiency properties of different auction formats. But Vickrey concentrated on a relatively narrow set of cases, in which each bidder’s valuation of the good being sold is unrelated to those of the other bidders. In practice, however, what one person believes an auctioned item to be worth often depends on the valuations of other bidders or the seller. Each may have private information about its value, clues to which are revealed in the course of the auction.
拍卖是出售艺术品乃至渔获等珍贵商品的一种古老机制。少数简单的拍卖形式逐渐成为主流。在英式拍卖中,竞拍者逐步提高出价,直至剩下一个出价最高的;荷兰式拍卖设定较高的起拍价,然后逐轮递减,直到有一个竞拍者应价。但随着运用范围扩大,拍卖已变得更加复杂,引发了经济学家更浓厚的兴趣。上世纪60年代,威廉·维克里(William Vickrey,1996年诺贝尔经济学奖得主之一)发展出了一套后来被称为拍卖理论的学说。他评估了竞拍者的最优策略,研究了不同拍卖形式的收益和效率。但维克里研究的拍卖案例范围比较狭窄,其中的每个竞拍者对拍卖品的估价互不相关。而实际上,人们对于拍卖品的估价往往取决于其他竞拍者或卖家的估价。各方都可能拥有关于拍卖品价值的私人信息,这些信息的线索会在拍卖过程中显现。

Mr Wilson began analysing such cases in the 1960s. He first tackled scenarios where the item for sale has a “common value”—a value that is uncertain beforehand but, in the end, is the same for everyone. An example might be a plot of land with oil beneath it, where participants may have different estimations of its value, perhaps because each has varying estimates of the quantity of oil. In such cases, the winner often discovers that the information others had about the common value led them to make lower bids. This may mean that the winner overestimated the worth of the item and paid too much, a phenomenon known as the winner’s curse.

Mr Wilson’s work in this vein laid the groundwork for the analysis of yet more complex scenarios, which take both bidders’ unique private valuations and estimates of an item’s common value into consideration. The value of an oilfield, for instance, might depend on both the quantity of oil in the ground and how cheaply each bidder can extract it. Mr Milgrom (whose doctoral thesis was supervised by Mr Wilson) derived a number of important lessons from his analyses. Auction structures that elicit more private information from bidders—such as English auctions, where every participant observes who bids what and who drops out—reduce the winner’s curse problem compared with formats where very little private information is divulged. In some cases, it may be in the seller’s interest to provide bidders with more information about the item under the hammer.

Much like Mr Roth, who helped design market mechanisms to match sick patients with kidney donors, Messrs Milgrom and Wilson put the knowledge gained from their theoretical work to practical use. Before the early 1990s, America’s government used unwieldy methods to allocate portions of the radio spectrum to interested telecoms companies. Bidders either explained why they deserved a slice of spectrum more than others (and spent vast sums of money on lobbying), or were allocated slices through lotteries. Neither led to an efficient allocation. In 1993 Congress allowed the Federal Communications Commission to use auctions instead. Yet it was not clear how these might work. Bidders had wildly varying assessments of how slices of spectrum might be used, and the value of one piece of spectrum often depended critically on what other parts an owner also controlled. The laureates worked with another economist, Preston McAfee, now at Google, to invent a new format, known as the “simultaneous multiple-round auction” (SMRA). Participants may bid on all items in a number of rounds, after each of which some information about bids and prices is revealed to the bidders. When first used in 1994, SMRA raised $617m for an American government that had previously earned almost nothing from its distributions of spectrum rights.
和罗斯帮助设计匹配肾脏捐赠者和患者的市场机制一样,米尔格罗姆和威尔逊也把理论研究成果应用于实践。在90年代初以前,美国政府用笨拙的方法把无线电频段分配给有意经营的电信公司:要么要求竞标方解释为何自己比对手更值得获得频段(并花费大量金钱游说),要么通过抽签分配。这都没有带来高效的配置。1993年,美国国会允许联邦通信委员会(FCC)改用拍卖形式分配。但当时大家都不清楚该怎么操作。竞拍者对频段用途的评估千差万别,而且一个被拍卖频段的价值往往取决于买家还控制着哪些频段。这两位诺奖得主与另一位经济学家普雷斯顿·迈克菲(Preston McAfee,现任职于谷歌)合作发明了一种新的拍卖形式——“同步多轮拍卖”(以下简称SMRA)。竞拍者可以在多轮竞拍中对所有标的出价,每轮竞拍后,有关竞拍和出价的部分信息会向所有竞拍者公开。美国政府在1994年首次采用SMRA拍卖频段,获得6.17亿美元,而此前它几乎没有从分配频段使用权上获得任何收益。

SMRA-style auctions are now used routinely in many countries and in contexts other than spectrum sales—in selling electricity, for instance. Questions of distribution have continued to motivate the prizewinners’ research and led to the development of other specialised auction formats. Messrs Milgrom and Wilson became the embodiment of the economist as engineer, using theory to devise a solution to a practical problem. It is an approach Sweden’s Royal Academy of Science seems to admire. This year’s award is the third since 2007 to honour “mechanism design”, or the use of economic principles to design markets to solve real-world problems.

The economist’s lot

The pursuit of economics as a form of engineering means that Messrs Milgrom and Wilson are more enmeshed in the real world than the typical academic. Both have consulted for regulators and firms. Mr Milgrom advised Time Warner and Comcast on their participation in radio-spectrum auctions in 2006; his efforts helped save his clients more than $1bn. In 2009 he co-founded a firm, Auctionomics, that provides consulting services to those looking to operate and to bid in auctions (many of the sort designed by the prizewinners).

It is a different sort of work from that which many aspiring scholars imagine themselves to be pursuing. But the rewards the laureates have reaped in academia and beyond certainly advertise the power wielded by economic engineers. ■