Paul Milgrom was born on April 20, 1948 in Detroit,
Michigan. He attended the University of Michigan, and graduated from the
university in 1970 with a degree in Mathematics. Milgrom worked as an actuary
for several years and then in 1975 began an MBA program at Stanford University.
There he earned a M.S. in Statistics as well as a Ph.D. in business. He has
taught at Northwestern University, Yale University, and is currently the Shirley
and Leonard Ely Professor of Humanities and Sciences in the Department of
Economics at Stanford University as well as a professor at the Stanford
Graduate School of Business. Paul Milgrom won the Nemmers Prize in Economics in
2008, and the BBVA Frontiers of Knowledge award in 2012. He is affiliated with
the National Academy of Sciences, Econometrics Society, AEA, American Academy
of Arts and Sciences, and the Western Economics Association. In his 65-and-counting
years, Milgrom’s largest contributions to the economic community have been in microeconomic
theory, auction theory, and market design, with his best know work being in
auction theory. Milgrom’s accomplishments have also ranged in many other areas
of economics, including incentive theory, industrial economics, game theory,
economic history, and economics of manufacturing and organizations. According
to Google Scholar, Milgron’s works have been cited an incredible 56,627 times.
Paul Milgrom’s work is important because of his many
innovations in the theory of auctions. The design for the simultaneous
descending auction that Milgrom contributed to has been adapted for dozens of
auctions involving huge sums of money. He has advised Microsoft Networks,
Google, Yahoo!, the Oregon Public Utilities Commission, and Mexico in various
auctions. Even more personally relevant to us is Milgrom’s work in economics of
organizations. Milgrom coauthored with John Roberts one of the textbooks
required for this course, Economics,
Organization and Management. Although I had not heard of Paul Milgrom
before this course, I’m sure that I will have an understanding of his work with
economics of organizations after it.
While we won't spend a lot of time on auctions in the class - that's more about markets than about organizations - we will talk about procurement. When an organization goes out for bids, there is an auctions aspect to that. Much economic theory of auctions is about the pricing the winning bidder pays (in the case of an auction to sell something, like a work of art). In actual procurement there are many other dimensions to the proposal, and often price isn't one of them. It gets determined via negotiation after the winning bidder has been selected.
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