Stanford Graduate School of Business faculty members David M. Kreps and Robert B. Wilson, with Stanford economist Paul R. Milgrom, have been honored with the 2018 John J. Carty Award for the Advancement of Science.
Kreps, Adams Distinguished Professor of Management, and Wilson, Adams Distinguished Professor of Management, Emeritus, provided a framework, known as sequential equilibrium, for modeling dynamic effects in economics.
According to the National Academy of Sciences announcement today, all three of the award winners, together with other collaborators and in particular D. John Roberts, John H. Scully Professor of Economics, Strategic Management, and International Business, Emeritus, employed these techniques to model and study reputation and collusion, both of which have broad applications in macroeconomics, industrial organization, and labor economics.
Wilson and Milgrom, Shirley R. and Leonard W. Ely Jr. Professor of Humanities and Sciences at Stanford University, are credited with shaping the entire modern telecommunications industry, which arose from an auction format they developed, along with Preston McAfee, for the 1994 radio spectrum auctions by the Federal Communications Commission.
The three award winners, with collaborators and alone, have contributed broadly to other topics in economics: Kreps has done foundational work in choice theory and financial market theory; Milgrom, in the theories of market microstructure and the principal-agent problem; and Wilson, in nonlinear pricing and utility regulation, as well as the foundations of dynamic equilibria.
The John J. Carty Award for the Advancement of Science is awarded every two years to recognize noteworthy and distinguished accomplishments. The award is presented with a medal and a $25,000 prize. Several past recipients have subsequently been honored with a Nobel Prize, including 2009 economics laureate Elinor Ostrom who won the Carty Award in 2004.