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Thursday, October 29, 2020

On Auction Theory

 A favorite topic we used for supply chain decision modeling.   Nicely overviewed here in Kellogg.  Below a good reminder to me of its outline , and there follows a good overview.   Well worth understanding. Reviewing now:  

What Is “Auction Theory,” and What Kinds of Questions Can It Answer?

The recent Nobel put the field in the spotlight. An economist explains how it works, using his own research as a guide.

Auction theory—which studies different auction formats and attempts to predict how people will behave in them—is having its moment in the spotlight.

The attention stems from the recent awarding of the Nobel in economics to two pioneers of auction theory research, Paul Milgrom and Robert Wilson, both at Stanford University. (Milgrom is a former Kellogg School professor.) Their work is both theoretical and practical: in the 1990s the Federal Communications Commission used their research to create a new way of auctioning off radio frequencies, resulting in billions of dollars in sales.

Kellogg’s Joshua Mollner started collaborating with Milgrom while Mollner was a Ph.D. student at Stanford. The two have a new paper out on auction theory. Kellogg Insight talked with Mollner, an associate professor of managerial economics and decision sciences, about the research and the Nobel announcement.  ...  '

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