The theory written by Paul Milgrom and Robert Wilson exposes the impact of auctions and the behavior of bidders, having won the Nobel Prize in Economics in 2020.
The Americans Milgrom and Wilson won the Nobel Prize for Economics 2020, in Copenhagen, which distinguished the improvements in auction theory and the invention of new bidding formats. The winning theory brought findings that benefited sellers and buyers alike, highlighting the impact auctions have on people, to varying degrees, in their daily routines.
The outcome of an auction depends on several factors: the auction rules; the auctioned object; and, finally, the uncertainty about what other bidders know about this one. The great difficulty in analyzing these processes lies in the fact that the best strategy for a bidder depends on the perception of the behavior that others will have.