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Portrait of Paul R. Milgrom
Photo: Eva Meyersson Milgrom, Sent to me personally · Public domain via Wikimedia Commons

Sveriges Riksbank Prize in Economic Sciences · 2020

Paul R. Milgrom

He co-designed the auctions governments use to sell airwaves, raising billions for the public and putting spectrum to work for phone users.

The Nobel citation: “for improvements to auction theory and inventions of new auction formats”
Born
April 20, 1948, Detroit, MI, USA
Shared with
Robert B. Wilson
Affiliation at the time
Stanford University, USA

Economics prize

2020

Shared with 1 other laureate.

Age that year

72years

Born in 1948.

Headline credited impact

$26–45billion in economic value

Public revenue raised by government spectrum auctions using the formats he co-designed and their successors. How it was built

Sources cited

18

Fact-checked September 24, 2026.

  • He learned he had won the Nobel when his co-laureate and neighbor, Robert Wilson, rang his doorbell at 2:15 a.m.; his wife, who was in Stockholm, watched on the doorbell camera.
  • To convince skeptical FCC staff that his new auction would work, he built a working version of it in Excel spreadsheets.
  • The FCC order that set the rules for the first US spectrum auctions cited him by name more than 100 times.
  • He began his career as an actuary. A Stanford professor, impressed by one answer in class, urged him to drop his MBA for a PhD.
  • He met his wife, Eva Meyersson, at the 1996 Nobel dinner in Stockholm, where he had come to honor the late laureate William Vickrey.

The breakthrough

A general theory of auctions, and new auctions for selling many things at once

In an auction, everyone is guessing. Sometimes an item is worth different amounts to different people (a private value). Sometimes it is worth the same to everyone, but nobody knows exactly how much, like a raw diamond or the future value of a radio frequency (a common value). If you win a common-value item, it may be because you guessed too high, a trap called the winner's curse. Around 1980, Milgrom, partly with Robert Weber, built one theory that covers both kinds of value. It showed that auctions which let bidders learn from each other during the bidding, such as an open auction where prices rise and people drop out, ease the winner's curse and bring the seller more money. When the US decided in 1993 to auction radio licenses, Milgrom and Robert Wilson designed a new format, the simultaneous multiple round auction, drawing partly on similar ideas from Preston McAfee. His model was a charity silent auction, where every item sits on a table at once and people can switch to another item when one gets too pricey. In the new version, all licenses are sold at once in rounds, bidding continues until a round passes with no new bids, and an activity rule Milgrom invented stops bidders from hiding their interest until the last moment.[2],[3],[4],[5]

“In Columbus, I first discovered my inclination to do theoretical research on practical problems.”
Paul R. Milgrom, From his Nobel autobiography, recalling his years as an actuary in Ohio before graduate school.[2]

What it meant for humanity

Radio spectrum carries phone calls, mobile data and video chats. Before 1994, the US handed out licenses to use it through contests in which companies argued their case, and then through lotteries. Companies spent heavily on lobbying, the government raised little money, and licenses often went to speculators who resold them to phone companies. In 1993 Congress switched to auctions, and Milgrom and Wilson's design became the format the FCC used. In its first use, in July 1994, the FCC sold 10 licenses for $617 million, rights the government had once handed out almost for free. By the FCC's own table, winning bids in its spectrum auctions from 1994 to 2022 add up to about $259 billion. Many countries, from Canada and India to Germany and Sweden, copied the format, and the Nobel committee says it raised more than $200 billion worldwide. Milgrom later co-created the combinatorial clock auction, which lets phone companies bid on bundles of licenses and has been used in the UK and many other countries. He then led the team that designed the FCC's 2017 incentive auction. It bought airwaves back from TV stations that chose to sell, reorganized the stations that stayed on air, and resold the freed airwaves to mobile carriers. That was a problem with more than a million technical constraints, and it moved 84 megahertz of spectrum from TV to wireless and other new uses. The money is not the whole story. Auctions aim to put licenses in the hands of the companies that can make the best use of them, so that networks get built. Versions of his format have also been used to sell electricity and natural gas, and he has designed auctions for online advertising.

  • The first FCC auction using the Milgrom-Wilson design, in July 1994, sold 10 licenses in 47 rounds for $617 million.[4],[11]
  • The Nobel committee says the format raised more than $120 billion for the FCC from 1994 to 2014 and more than $200 billion from spectrum sales worldwide.[4]
  • The 2017 incentive auction his team designed paid TV stations $10.1 billion to give up spectrum, sold 70 MHz of wireless licenses for $19.8 billion and freed 84 MHz in all.[5],[13]
  • The combinatorial clock auction he co-created with Lawrence Ausubel and Peter Cramton was adopted in the UK in 2008 and then by countries including Australia, Canada, Denmark and Switzerland.[5]
  • His 1985 model of trading with Larry Glosten helped launch the modern study of how stock market rules shape prices, a field called market microstructure.[2]

Impact in numbers

Milgrom is unusual among economists in that he both proved the theorems and wrote the rules that governments then used. His auction formats became the standard way to run the open competitions that replaced lobbying and lotteries for the public's airwaves. Auctions using them have raised hundreds of billions of dollars for governments and helped mobile networks get the spectrum they needed. His formats have also been used to sell electricity and natural gas, and he has designed auctions for online advertising. He and Alvin Roth taught the first graduate course in market design, helping launch that field, and his papers on trading with private information shaped how economists study stock markets. Revenue is only a rough stand-in for this value. The deeper benefit, putting scarce resources to their best use, is real but has not been measured.

EconomyCommunicationTechnology

Each number is the laureate’s credited share of a real-world outcome, cumulative to 2025. The whole outcome, the share of credit, and the reasoning are shown so you can check the arithmetic. Outcomes shared with other laureates are counted once on the impact page.

  • Low confidenceDirectModeledEconomy

    Public revenue raised by government spectrum auctions using the formats he co-designed and their successors

    $26–45

    billion in economic value, credited share

    That is 10% of $260–450 billion in economic value since 1994.

    How this number was built

    Low: net winning bids in the FCC's 100 completed spectrum auctions (1994-2022) sum to $259.1B nominal, rounded to $260B; some bids went unpaid after defaults, but converting early bids to 2024 dollars more than offsets that. High: the Nobel committee says the format raised over $200B worldwide vs over $120B at the FCC to 2014, so at least $80B abroad; $260B + $80B = $340B, plus later non-US sales and inflation, rounded to $450B. Revenue is a transfer used as a proxy; efficiency gains are unmeasured. Share 0.1: he co-invented the SMR with Wilson (McAfee had similar ideas), created its activity rule, co-created the clock auction and led the incentive auction design. Congress mandated auctions before any format existed, so much revenue would have come anyway.[2],[4],[6],[11]

    Sources: Federal Communications Commission; NobelPrize.org (Royal Swedish Academy of Sciences); NobelPrize.org (Nobel Foundation); NobelPrize.org (Nobel Foundation)

The double edge

Milgrom's auctions are widely praised, but they have real weaknesses, and his role in them has been contested. Because every bid in the early FCC auctions was public, some bidders used the last digits of their bids to signal rivals where to back off. A handful of such bidders won about 40 percent of the spectrum in one auction at noticeably lower prices, until the FCC changed its rules. The Nobel committee notes other known flaws of the format. Big bidders can gain by asking for less than they want, which keeps prices down, and a bidder can get stuck with some licenses that are useless without the others it lost. The 2017 incentive auction, his most complex design, drew sharp criticism. Critics argued it freed less spectrum and raised less money than early forecasts, and that ties between academic designers and investors in TV stations deserved scrutiny. Milgrom rejected these claims in detail. Concerns were also raised that the money Congress set aside to move TV stations to new channels was too little. We assign no harm figure.

  • Minor

    Bidders used open bids to signal and punish rivals

    In the FCC's early auctions, some bidders put market codes in the last digits of their bids to warn rivals off. In the 1996-97 DEF-block auction, the handful of bidders that often signaled or retaliated won about 40 percent of the spectrum and paid significantly lower prices. From 1997 the FCC required fixed bid increments to stop it.[12]

  • Minor

    Known weaknesses of the format

    The Nobel committee notes that the simultaneous auction lets large bidders gain by reducing demand to keep prices low, and exposes bidders to winning only part of a set of licenses they need. It adds that not every spectrum auction lived up to its promise.[5]

  • Moderate

    Dispute over the 2017 incentive auction

    Economist Glen Weyl argued the auction cleared only 84 of a possible 126 MHz and raised under $20 billion, against early projections of up to $60 billion. Weyl and journalist Stefano Feltri also questioned links between market-design academics and investors that bought TV stations before the auction. Milgrom, its principal designer, rejected the claims point by point.[5],[14],[15]

  • Minor

    Nearly 1,000 TV stations had to move

    Nearly 1,000 TV stations that stayed on the air had to move to new channels after the incentive auction. Concerns were raised that the $1.75 billion Congress set aside to pay for their moves was too little.[13]

Against the odds

Milgrom grew up in a secure, well-organized Jewish community, and his sources describe no major barrier he faced for being Jewish. But the Detroit his grandparents settled in had a harsh record. In the 1920s the carmaker Henry Ford published a series of antisemitic articles in his Dearborn Independent newspaper, later sold as the four-volume book The International Jew, which was translated into more than a dozen languages and spread widely in Germany. In the 1930s Father Charles Coughlin preached on the radio from his church in Royal Oak, a Detroit suburb, to as many as 30 million listeners, and by the late 1930s he and his newspaper were openly antisemitic. As late as 1960, real estate brokers in the Detroit suburb of Grosse Pointe screened home buyers with a point system. Jewish buyers needed 85 points out of 100 to pass, compared with 55 for Poles and 65 for southern Europeans, and Black and Asian buyers were barred outright. His own closest brush with hostility came on a 1964 bus trip out West with a Jewish youth group, when kids in the mountains threw rocks at the bus. He later said the moment cemented his Jewish identity. His great setbacks were personal instead. In 1995 his wife suffered a brain injury that ended their marriage, and he rebuilt his research afterward.

  • 1938

    Discrimination

    Context: in the decades before his birth, Detroit was a center of American antisemitism, from Henry Ford's Dearborn Independent (1920-27) to Father Coughlin, the radio priest of suburban Royal Oak, whose broadcasts and newspaper were openly antisemitic by the late 1930s.[16],[17]

  • 1964

    Other

    On a USY on Wheels youth trip out West, kids in the mountains threw rocks at the Jewish youth group's bus. Milgrom says the episode cemented his Jewish identity.[8]

  • 1960

    Discrimination

    Context: until 1960, Grosse Pointe real estate brokers used a point system that required Jewish home buyers to score 85 of 100 points, against 55 for Poles and 65 for southern Europeans, and barred Black and Asian buyers outright.[18]

  • 1995

    Other

    His first wife suffered a brain injury that left her seriously disabled. The marriage ended, his research slowed for several years, and he continued to manage her care.[2]

Jewish background

Both parents JewishIdentified as Jewish, secular

Milgrom was born in Detroit to Abraham and Anne Milgrom. His father was born in Canada to Polish Jewish immigrants and his mother in Detroit to Ukrainian Jewish immigrants. He grew up in Oak Park, Michigan, walked to Saturday services at B'nai Moshe, had his bar mitzvah at Congregation Beth Yehudah in 1961, graduated from the United Hebrew Schools high school in 1965 and was active in Jewish youth groups. He says a 1964 youth bus trip out West cemented his Jewish identity. As an adult he hosts his son and grandson for Shabbat dinner every week, and he often lectures at Israeli universities.[2],[7],[8],[9]

Key dates

  1. April 20, 1948

    Born in Detroit, Michigan, the second of four sons of Abraham and Anne Milgrom; raised in suburban Oak Park.[1],[2]

  2. March 1961

    Has his bar mitzvah at Congregation Beth Yehudah in Detroit.[7]

  3. 1970

    Earns an AB in mathematics at the University of Michigan, then works as an actuary in San Francisco and Columbus, Ohio.[2]

  4. 1975

    Enters Stanford's MBA program and soon switches to a PhD under Robert Wilson.[2]

  5. 1979

    Receives his Stanford PhD, having already started teaching at Northwestern's Kellogg School of Management.[2]

  6. 1982

    Publishes the Milgrom-Weber general theory of auctions and moves to a tenured chair at Yale.[2],[4]

  7. 1987

    Returns to Stanford as a professor.[2]

  8. July 1994

    The FCC runs its first auction using the simultaneous multiple round design he created with Wilson, selling 10 licenses for $617 million.[2],[4],[11]

  9. 1996

    Lectures in Stockholm to honor the late laureate William Vickrey and meets Eva Meyersson, whom he marries in 2000.[2]

  10. 2012

    Congress authorizes a broadcast incentive auction, and the FCC asks him to assemble a team, through his firm Auctionomics, to design it.[2]

  11. March 2017

    The incentive auction closes, moving 84 MHz of airwaves from TV broadcasting to new uses.[5],[13]

  12. October 12, 2020

    Shares the Nobel Memorial Prize in Economic Sciences with Robert Wilson for improvements to auction theory and new auction formats.[1],[3],[10]

Sources

  1. 1.Paul R. Milgrom - Facts · NobelPrize.org (Nobel Prize Outreach)
  2. 2.Paul R. Milgrom - Biographical · NobelPrize.org (Nobel Foundation), 2021
  3. 3.The Prize in Economic Sciences 2020 - Press release · NobelPrize.org (Royal Swedish Academy of Sciences), 2020
  4. 4.The Prize in Economic Sciences 2020 - Popular information: The quest for the perfect auction · NobelPrize.org (Royal Swedish Academy of Sciences), 2020
  5. 5.Scientific Background: Improvements to auction theory and inventions of new auction formats · Committee for the Prize in Economic Sciences, Royal Swedish Academy of Sciences, via NobelPrize.org, 2020
  6. 6.Auction Research Evolving: Theorems and Market Designs (Prize Lecture, December 7, 2020) · NobelPrize.org (Nobel Foundation), 2020
  7. 7.Jewish Economist with Detroit Roots Awarded 2020 Nobel Prize in Economic Sciences (Danny Schwartz) · The Detroit Jewish News, 2020
  8. 8.The Roots of Genius: Brilliant Oak Park Math Student Went on to Earn a Nobel Prize (Steve Raphael) · The Detroit Jewish News, 2020
  9. 9.American Jewish economist Paul Milgrom shares Nobel for auction theory work · The Times of Israel, 2020
  10. 10.Knock on the door late at night was a professor's Nobel co-winner notifying him of their win · CNN, 2020
  11. 11.Auctions Summary: Completed Spectrum Auctions (Wayback Machine copy, November 2025) · Federal Communications Commission, 2025
  12. 12.Collusive Bidding: Lessons from the FCC Spectrum Auctions (Peter Cramton and Jesse A. Schwartz), Journal of Regulatory Economics 17:229-252 · University of Maryland (author copy), 2000
  13. 13.TV Broadcast Incentive Auction: Results and Repacking (Angele A. Gilroy), CRS In Focus IF10751 · Congressional Research Service (via EveryCRSReport.com), 2017
  14. 14.How Market Design Economists Helped Engineer a Mass Privatization of Public Resources (Glen Weyl) · ProMarket (Stigler Center, University of Chicago Booth School of Business), 2020
  15. 15.Was the 2017 FCC Spectrum Auction a Success or a Disappointing Failure? (Asher Schechter) · ProMarket (Stigler Center, University of Chicago Booth School of Business), 2020
  16. 16.Antisemitism and Henry Ford's "The International Jew" · United States Holocaust Memorial Museum, Holocaust Encyclopedia
  17. 17.The Radio Priest: Charles E. Coughlin and American Antisemitism · United States Holocaust Memorial Museum, Holocaust Encyclopedia
  18. 18.The Grosse Pointe Gross Point System (William Thompson) · History News Network, 2003

Fact-checked on September 24, 2026 by a separate AI fact-checking pass that re-opened the sources, with 13 corrections made. How we check

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