US economists Paul Milgrom and Robert Wilson have won the Nobel Prize in economics "for improvements to auction theory and inventions of new auction formats," the Nobel Committee announced Monday.
"Auctions are everywhere and affect our everyday lives," the committee said in a statement, adding that the laureates' innovations had benefitted "sellers, buyers and taxpayers around the world."
"The new auction formats are a beautiful example of how basic research can subsequently generate inventions that benefit society," the statement added.
Auctions are used to buy and sell a variety of goods and services, including electricity, financial assets, fishing quotas and emissions allowances.
The prestigious award comes with a 10-million krona ($1.1 million; €932,000) cash prize and a gold medal. It is the last of the Nobel Prizes to be announced and comes after awards for medicine, physics, chemistry, literature and peace were announced.
Both, Milgrom and Wilson, are based at Stanford University in California
Milgrom said he received news of their win "in a strange way.''
"I got a knock at my door from Bob Wilson,'' he told a news agency. "He was my PhD advisor, and he lives right across the street from me.''
Milgrom said students, friends and colleagues had long suggested he and Wilson might be due for the prize.
"It's really sweet actually,'' he said. "It's nice to have their respect but their affection as well.''
Not created by Alfred Nobel
Nobel economics prize — technically known as Sveriges Riksbank Prize in Economic Sciences — was created by the Swedish central bank "in memory of Alfred Nobel."
The award, the only Nobel Prize not established by the Swedish inventor and philanthropist, is based on a donation received by the Nobel Foundation in 1968 from Sveriges Riksbank on the occasion of the bank's 300th anniversary.
Last year, the Royal Swedish Academy of Sciences awarded the prize to Abhijit Banerjee, Esther Duflo and Michael Kremer for their research to help alleviate global poverty. Duflo, who was 46 years old then, became the youngest and only the second female to win the award.
A total of 86 individuals, mostly from the US, have won the award since its inception in 1969.