The Nobel prize for economics is typically awarded to economists who have broken new ground in a particular sector of the discipline, or who have pioneered specific methods of investigation or analysis. The 2020 iteration of the award does this, but in fact also rewards a specific, incredibly influential act of policy design: The 1993-94 auction by the United States Federal Communications Commission (FCC) of telecommunications spectrum. The FCC picked up the suggestion made by the 2020 laureates, Paul Milgrom and Robert Wilson, and created a specific auction design based on then-recent advances in game theory that provided an efficient distribution of spectrum and also delivered considerable revenue to the government. The FCC telecom auction has been modified and adapted by multiple countries around the world — including, of course, India, where telecom spectrum allocation has been both a politically salient issue in the past and a major source of government revenue more recently. In other words, this economics Nobel is more than anything else an award for a specific and successful policy intervention, vanishingly rare in the economics field — unlike, say, in physics, where inventors, such as in 2014 the Japanese developers of the LED, are honoured as often as theoreticians or those who make discoveries.
TO READ THE FULL STORY, SUBSCRIBE NOW NOW AT JUST RS 249 A MONTH.
Already a premium subscriber? LOGIN NOW
What you get on Business Standard Premium?
- Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
- Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
- Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.
- Pick your 5 favourite companies, get a daily email with all news updates on them.
- 26 years of website archives.
- Preferential invites to Business Standard events.
Subscribe to Business Standard Premium
Exclusive Stories, Curated Newsletters, 26 years of Archives, E-paper, and more!
First Published: Mon, October 12 2020. 23:49 IST