Economics Nobel shows that economists are starting to think like engineers

Most economic theories are basically mathematical parables. Although they're written in equations, the variables in those equations only loosely correspond to real-world things that we can measure

The Nobel-prize-winning work of economic theorists Paul Milgrom and Robert Wilson of Stanford University on how to set up auctions shows how the field is evolving. No longer is economic theory merely a glorified way of using mathematics to tell allegories about the world -- now it has practical engineering applications.

As my Bloomberg Opinion colleague Scott Kominers notes, this year’s award is well-deserved and long-awaited. In fact, I had predicted Milgrom to win last year; he’s such a virtuoso that it was only a matter of time (Wilson, Milgrom’s thesis advisor, is certainly no slouch either). Milgrom’s work in finance