Video: Prices and Decentralization Without Convexity

“This groundbreaking book of practical economic theory by Milgrom, the world’s most accomplished designer of complex auctions, describes the design of the most complex auction yet: the FCC incentive auction for electromagnetic spectrum. The book also illuminates why the magic of the market doesn’t happen by magic, but sometimes needs to be designed. Every economist, and indeed anyone interested in how markets work, will find these wide-ranging reflections rewarding to read and ponder.”

—Alvin E. Roth, Stanford University, Nobel Laureate in Economics

Today’s AEA featured post is a video of Paul Milgrom’s 2014 Kenneth J. Arrow Lecture that inspired Discovering Prices: Auction Design in Markets with Complex Constraints. Paul Milgrom discusses how prices can guide decentralized resource allocations in environments with non-convexities. His work on auctions led the Royal Swedish Academy of Sciences to award him and Robert Wilson the Nobel Memorial Prize in Economic Sciences for improvement to auction theory and invention of new auction formats.

Watch Paul R. Milgrom deliver his Noble Prize Lecture on December 7, 2020. He was introduced by Professor Tore Ellingsen.

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