Description
Book SynopsisPaul Milgrom describes how auctions can be used to discover prices and guide efficient resource allocations. Milgrom roots his new theories in real-world examples (including the ambitious U.S. incentive auction of radio frequencies, whose design he led) and provides economists with crucial new tools for solving complex resource allocation problems.
Trade ReviewIn
Discovering Prices, Paul Milgrom shows how innovative systems of price discovery can help solve vexing problems of reallocation, long thought to be intractable and made particularly challenging by the complexity and interconnectedness of new technologies. Milgrom's revolutionary advance in price theory is a most fitting tribute to Kenneth Arrow, who laid the foundation for understanding the traditional price system. A brilliant, fascinating book. -- Bengt Holmstrom, Massachusetts Institute of Technology, Nobel Laureate in Economics
With deep theoretical insights and broad practical experience, Milgrom presents a systematic analysis of the challenges of pricing in complex resource-allocation problems, and in doing so he helps us to better understand the foundations of price theory in economics. -- Roger Myerson, University of Chicago, Nobel Laureate in Economics
The elegant theory and mathematics in Milgrom’s
Discovering Prices are at the foundation of the FCC’s Broadcast Incentive Auction. I can confirm the successful real-world application of the same, with Milgrom’s active participation during every step of the design and implementation of an auction that will repurpose 84 MHz worth of prime spectrum and generate almost $20 billion in proceeds. -- Gary M. Epstein, Chair of the FCC's Incentive Auction Task Force
This groundbreaking book of practical economic theory by Milgrom, the world’s most accomplished designer of complex auctions, describes the design of the most complex auction yet: the FCC incentive auction for electromagnetic spectrum. The book also illuminates why the magic of the market doesn’t happen by magic, but sometimes needs to be designed. Every economist, and indeed anyone interested in how markets work, will find these wide-ranging reflections rewarding to read and ponder. -- Alvin E. Roth, Stanford University, Nobel Laureate in Economics
No one has greater knowledge or, perhaps more importantly, more reliable instincts when it comes to incentive auction design. Milgrom's excellent monograph should be made available to economists as soon as possible. -- Leslie Marx, Duke University
Table of ContentsPreface
1. Introduction
2. (Near-)Substitutes, Prices, and Stability
3. Vickrey Auctions and Substitution
4. Deferred-Acceptance Auctions and Near-Substitutes
5. Conclusion
Notes
References
Index
