The Nobel prize for economics was awarded on Monday to Americans Paul R. Milgrom and Robert B. Wilson. The two game theory specilaists won for their designs of mathematical models that promote “improvements to auction theory and inventions of new auction formats,” said Göran K Hansson, secretary-general of the Royal Swedish Academy of Sciences.

Milgrom, 72, is the Shirley and Leonard Ely professor of humanities and sciences at Stanford University. Wilson, 83, is a professor emeritus at Stanford.

Milgrom found solutions relating to bidders who start with an undervalued price to avoid the so-called winner's curse of overpaying. While the winner's curse issue has long been acknowledged, Milgrom and Wilson "built a theory that explains how it occurs, under what conditions, and how to make it less of a problem," notes Bloomberg. (Read more about their work from the Nobel Prize committee.) 

The pair has been noted for their contributions in designing new auction formats for complex situations across industries.