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Award for auctions

This year's Nobel is for actual economic policy design

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Nobel Prize | Nobel prize for Economics | auction

Business Standard Editorial Comment  |  New Delhi 



The 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 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 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 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.

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First Published: Mon, October 12 2020. 23:49 IST

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