The 2020 Nobel Prize in Economics: Explained | Economics Explained
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- Опубліковано 19 чер 2024
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The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, or simply the Nobel Prize in Economics is an award given every year to thought leaders in the field.
This is one of 6 prizes given out the others recognizing similarly high achievers in literature, physics, medicine, chemistry, and of course the peace prize awarded for furthering the betterment of humanity.
In and amongst all of the happenings in the world this year these awards have kind of flown under the radar which is unfortunate because they all recognized some very remarkable works.
And in the field of economics, it all had to do with auctions.
Auctions to the average person might sound like a pretty mundane thing, you hop on eBay and bid for a new RTX 3080 before crying yourself to sleep, or maybe you are bidding for a new house to live in at a property auction.
At the extreme end, we see auctions for works of art that sell for millions of dollars but even still the auction itself kind of just looks like a formality around which a transaction is done.
But this is far from true. Auctions and Auction Theory are one of the most important systems to understand in economics because they act as an efficient way to build markets and correctly determine how we value items.
Remember amongst everything economics is simply a study of how people interact with things of value.
So with that in mind
What should the average person or aspiring economist know about Auction Theory?
What did the winners of this year's Nobel prize contribute to this theory?
And how can this be utilized to build better and more efficient economies?
#Auctions #NobelPrize #Economics
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hi
@@AndrewMellor-darkphoton yubvk
Please do an Economics Explained video on the comic book market. The stuff you go over here with auctions is a small part of the craziness that is the comic market. There is so much to go over from how the industry is still supported by mom and pop shops. The fact that there is most duopoly between DC and Marvel, the fact the market crashed from a speculation bubble in the 90s, or even how there was and still kinda is a monopsony with the Diamond company over distribution of the comics to the mom and pop shops. DC is trying to break that monopsony now but isn't having an easy time doing it.
Sveriges riksbank = swedish central bank
Hi EE once again, please do an Economy of Nigeria episode... change is on the horizon, I'd love to have an idea what i can do to be of help
A super fun little fact about this year's prize that didn't make it into the video is that the two winners live right next door to one another. Wilson actually ran over to knock on Milgrom's door to tell him the good news.
hi
I saw their story on fb!!!!
I'm confused. if this was first used in 1995. why is the nobel prize just given out now?
@@truthwatcher1808 takes time to win a Nobel prize. Each year there are lots of candidates in a wide variety of topics, all falling under the umbrella of Economics. Also one solid test (like the US FCC 1995 auction) is not enough, usually there are several “proofs” (or auctions) needed. The Nobel committee has its own (slow) pace.
The other fun fact (impressive tbh) is that Robert B Wilson now has 3 former PhD students as Nobel laureates (one been his co-laureate)! Talk about been a genius who can also recognize and attract talent!
EE should discuss every Economy Nobel Prize and their work. Wow. I have never come up with an idea as good as this since forever.
That's the reason for their nobel prize
Great idea!! Just saw one on the related one from 1996. Can recommend it: ua-cam.com/video/eX0CtCQjSLE/v-deo.html
This guy is probably pension age now.
Trump won one
Yup yup yup yup
I know nothing about auction theory, but for some reason, when he started talking about an ‘English style system’, I just knew the alternative system had to be Dutch.
Thats because only the Dutch would look at something and say "how could we possibly do it backwards?"
the dutch actually use the english system for cars, art and other luxury items..
the dutch system is used for buying bulks of flowers and vegetables, it just goes faster that way
You must be a chess player
Why not French?
@@agrajmishra6128 Correct answer
"Bid on that new RTX 3080 before crying yourself to sleep"
too real... I need nap now...
Or alternatively you could just wait a few months.
@@insane_troll Not sleeping for a few months is pretty dangerous...
@@insane_troll So we have to cry every night before we go to sleep for the next few month? Meh... if you don't have anything nice to say...
:(
Was it in the video?
Can this be a series? Like, go through the Nobel prizes throughout the years? Or at least the fun ones?
Spoiler, a lot of them are all from the exact same school of economics.
yes pleaseeee
@@darkelwin02which one ?
The chemestry footage cracked me up 0:16 😂
lol
yep, looking for this one, to the top you should go
I came to the comment section to find this comment. :p
Only reason I came to the comment section
cracked...I see what you did there
12:50 "In most nations this is still illegal"
Whispers "But..."
That made me laugh, I thought a property developer was trying to collude with me over my shoulder.
Get in looser, we are fixing prices!
Every year I’m very curious about who and what is the Nobel prize winner in every field. I read the work rewarded, looks complicated, dig deeper in the subject, still complicated but I feel I could understand if someone explains to me the context. That’s what you did in the video, thanks you. Great work as always.
yeah .
i don't know what else to type.
Dig a little deeper into the 'Nobel' prize for economics specifically. It's interesting. Apparently, the actual Nobel family did not recognise or credit the award as a true Nobel prize. The story goes that at the time of the prize's conception, the central bank of Sweden wanted to be free from oversight from the democratic government of Sweden. So, the bank sought an institution to give them academic and social legitimacy, hence justifying their independence. Since then, it's been argues that the prize serves to legitimise the fallible theories of limited branches of economic thought to an otherwise unknowing public.
I think this series will do exactly that: ua-cam.com/video/eX0CtCQjSLE/v-deo.html
"Economics is a study of how people interact with things of value" - I really like how you said that.
It’s funny, every econ professor I’ve had has described it a different way. My personal favorite is “economics is the study of how humanity minimizes the effects of scarcity”.
Please do an Economics Explained video on the comic book market. The stuff you go over here is part of the craziness that is the comic market. There is so much to go over from how the industry is still supported by mom and pop shops. The fact that there is most duopoly between DC and Marvel, the fact the market crashed from a speculation bubble in the 90s, or even how there was and still kinda is monopsony with the Diamond company over distribution of the comics to the mom and pop shops. DC is trying to break that monopsony now but isn't having an easy time doing it.
@WorldFlex the fact that you consider comics as nothing but an irrelevant market shows your igneous. EE has gone over even Beanie Baby's collecting so no the comic book market is not irrelevant to the context done on this channel. No go off and continue to think everything on UA-cam is just propaganda with your tin foil hat.
Heard the intro and heard ocshuns, and I was so confused until about 10 seconds in lol.
I thought he was saying option until it came up on the screen
Why do I feel like I'm about to find out the American alternative pronunciation is something horrific like "our-k-tea-ohn"?
What other pronunciations are there?
@@yukionna1649 I am American and I prnouce it Auck-shun.
@@RockWontDie14 people in the north east US say something like 'action' and people in the southeast say it with emphasize on the 'au' part like aüction
Alfred Nobel did not want a Nobel prize in economics and he had his reasons. It remains an insult to him that the Swedish central bank just names the prize after him. Not to honour him of course, he didn't want it, but to get the esteem and reputation that the other, in Alfred Nobels mind most important, sciences get.
It's disgraceful. Call it something else. Mathematicians have their Fields medal. Establish an Adam Smith prize or Friedrich Hayek, if you like. But leave out Nobel's name.
I agree completely. The economics prize isn't as prestigious as the one in physics - I'd say most of the cachet comes from appropriating the name.
The Nobel Prize in Economics has many controversies around it.
It has an obvious political bias, prefering mainstream economists like Milton Friedman and Friedrich Hayek, while leaving keynesian economists like Joan Robinson without an award.
Economics Nobel Prize winner Gunnar Myrdal said that the prize is reactionary and should be abolished.
Even Hayek said it gives economists an authority in their field that no man should have.
also you get frauds like Krugman, who is wrong with most of what he says but rides on the prices fame for the last decades
: Fun Fact: There is no Nobel Prize in Economics. The Prize refered to in the video(but of course not in the titel) is a sad/cheap substitute which economists gave themselves.
There’s also no prize in mathematics. It’s been rumored (falsely) that Nobel’s wife ran off with a mathematician
As a student of international politics and economics I couldn't be more thankful for the amazing videos you put out.
Thanks for the video - Economics undergrad here! Please do Nobel coverage every year in Layman's terms! Very helpful and much appreciated!
"People are behaving illigically" is the most logical thing you can come up after observing "The people" for a while
Well, the price is probably not the only thing that starts really _high_ at a Dutch auction...
Heh heh
I see what you did there...
like snoop dogg rolling a cannabis weed blunt joint
The dutchies already knew that if they hold the bids in Amsterdam, all the bidders would be a bunch of stoners with a lot of money.
Surprised this comment hasn't been flooded already
This is exactly the video I was wanting. Thank you so much!
“Okshuns” is triggering me so hard. TIL how auctions is said in Australia.
I got it too, but this is not how even the majority of Australians pronounce it, I work in energy trading, so we use the term a lot in daily business, but I have never heard an Australian colleague pronounce it this way. at least it doesnt sound as obtuse as saying "Nitch" for Niche :D
@@sjwbond2 he means the word Australia I think lol
@@sjwbond2 weird, as I don't think I have heard an Australian say auction in any other way.
@@lancejohnson8388 Vic/NSW thing? My colleagues are all from there...
I am Australian and yes i also say "okshun"
I am supermarket worker. So I am not the smartest person but your videos makes so much sense and they are like music to my ears.
i just love how EE showed that Walter White van for Chemistry. Heisenburg surely be proud "You're god damned right"
I'd be interested to see how well this works for reverse auctions, since those are very common in the engineering and service sector (bidding to build a bridge or administer a hospital for example). Intuitively it seems like it would work just as well, but perhaps there's something that might be different.
One of my favorite classes I took covered a lot of auction theory and I thought it was super interesting. Auctions are such a complex but elegant solution to match buyers and sellers. It's also so interesting learning about how auctions shape the world at the scale of government contracts or fixed allocations.
The ad transitions are just so well timed! It makes my marketing heart melt ❤️
It looks great and it's comforting since people might be still working on the weekends. 😅
It's almost as if this video was made in a supporting way around this advert! : O
Fun fact: Robert Wilson has supervised the dissertations of three other Nobel price winners: Alvin Roth, Bengt Holmstrom and Paul Milgrom.
I feel that the blade of the windmill at 6:38 tracks the point of intersection on a curve showing ‘price’ and ‘reluctance to bid’.
I also feel that wasn’t by accident.
Thank you for explaining this!! i watched a lecture explaining this, but still was unable to understand. Now, while i still don't understand it all, but this helps a lot! Auctioning is one of the most important and in my case, my primary way of selling things (stamps & postages). So i was interested in this.
You mentioned the graphics card in this episode, hopefully that tech company is listening as the “new” auction would have actually done a lot of work for them
Maybe not the most exciting of topics, but very ,very important ,I needed that.
If I see the Seamless ad on EE videos one more time...
Speaking of which, someone should raise the topic of Ad Tech and it’s impact on the economy.
This is a great video. I also hoped you would add the negatives of the simultaneous auctions as well. Read about how it totally failed in India and caused many more problems than it solved. I can see the effects first hand
I am studying auctions in my undergrad economics course. This video was a great revision!
I’m becoming your patron sir!!! You make economics fun. Thanks a bunch!
Awesome video! I think a really interesting video would be on banks and financial instruments moving away from LIBOR as the reference rate, the scandals' involved and the effect it will have on the economy would be incredible. interesting.
This channel is awesome. Congrats. I think most people will learn more here than going to school and college together
Always look further independently though. A UA-cam video that gives the full story with both sides of the coin and enough context and details AND be entertaining is pretty rare.
Idk why everyone's hating on the way you say auction it sounds fine to me
Don’t hear it either... 🤷♂️
Some people don’t realise that people have different accents lol
I see everyone complaining but no one is offering their version of the “correct” pronunciation. I’m American and I pronounce it the same way.
Yeah.
I just don't care how it is pronounced. It's understandable and that's all matters.
Amazing work as always! Can you do a video on The Fair Tax Law? Explaining what fair tax will do by replacing income tax for the country (pros and cons perhaps)?
Yes you are struggling with , Skåne...
Sk-or-neh?
@@Croz89 or go with the English name, Scania.
I’m confused with everyone’s confusion. How do you say auctions? I’m not some Aussie here I’m from the mid west I understand him just fine 🤷♂️..... maybe I am an Aussie 🤔
It would be great if you did this every year for the winner in economics , as you break it down very well
Here is one on the 1996 one that also went to auction theory. ua-cam.com/video/eX0CtCQjSLE/v-deo.html
There is some overlap. But, it's a start :)
Interesting theme. Good work Economics Explained
Stock video at 18:23 is simply hilarious
You say auction so weird and I absolutely love it!
Learning Economics that actually works, kudos!!!
This is awesome. Good on these guys!
Excellent explanation. Thank you so much!
In Ireland college places are given out in a massive auction. You get grades in your leaving cert which add up to points (H1 = 100, H2 = 88, H3 = 77 etc, max points = 625) and you basically bid on courses and the points go up and down each year for different courses. Depending on demand there can be up to 5 rounds of bidding on college places. There is no interview, no application essay, just a straight up auction.
Dammit your economic videos are too good. You earned my subscription! Not to merit but still!
Wow what a great format, thnx for informing
You mentioned Mcaffee, yes, that Mcaffee. You should do a video on him! It's the most fascinating story about money I've ever heard. His whole story is just way stranger than fiction. And there's so much that he did that you can learn about on what you should, and especially should not do with money.
You could probably make this a series. Learing what nobel ecomomists contriubuted would be quite interesting.
Love your vids man!
👊
@@EconomicsExplained ni vid ;). Question: if that new type of auction was invented before 1996 why are they reciveing the price now?
I hear oligopsony. Just remebered that EE thought us about monopsony a view videos earlier, so we all directly understand.
That butchering of "Sveriges riksbank" hit me differently
...och Skåne.
Seeing a Swedish person online hits differently 😞
Kansje det hadde vært bedre å bare oversette til engelsk
@@fdumbass inte en dansk 😭
@@EmmaWithoutOrgans Jeg er norsk 😢
that new auction format...its kinda elegant if you look more into it...
Super interesting, thanks for making
Chemistry nobel price reference at the begining...well played, got my upvote righ there
Good timing for auctions theory with the Show Me The Monet selling for almost 10 million at auction
Will you upload all your episodes on Google Podcast? I would be nice as you can download there and listen offline
I want to know how do you get all these videos and pictures? Where can we get them?
This was an excellent video.
Nice vid. Never knew about Dutch auctions or that Aussies spell 'competitive', 'competative' ;)
Hi man, i love your videos, but i'm not a native english speaker myself, and i don't know if that's the case for many other people that see your videos, so i just was wondering if you were planning to put subtitles on your videos, it would be great to have english sub cause i have a decent knoledge of english but i'm still perfecting my listening habilities, so not everytime i'm able to understand everything and it could the case for many others, i dont know.
It would be great if you consider it and keep up the good work man 😁✌
This is realy good channel..i never guess that some Aussi can be smart
Very good explanation!
I love you videos....wish you provide with Indonesian language subtitle, I believe a lot of my colleague will benefit from your contents
do economics of past Nobel prizes... I recommend: 2002 (behavioral economics), 2018 (climate economics), 1993 (cliometrics), 1991 (Coase), 1998 (welfare economics), 1997 (Black-Scholes-Merton model)
or
economics of Patreon
They aren’t Nobel prizes though
Thanks so much for the informative video. I’ve been thinking a lot about auctions in relation to the Jackson Pollock painting Blue Poles, which is currently owned by our Australian government. Do you think it would be worth it to cash in on this valuable asset in the midst of the coronavirus recession? Thank you
Great video! Really interesting to learn about nobel prize winning theories.
Ain't no real Nobel prize uh
How don’t remember if it was you or jake Tran who did an “in depth” about us government contracts for weapon distribution for the military... either way you should do an economics explained for bids for weapons contracts, I feel like that would be an interesting video idea
All the resources for sale at once is not a real possability without a seller with a monopoly on all the resources. It's basically applicable to non-capitalist ventures, because a capitalist venture would do better fixing prices than introducing fairness or competition where there is none. You mentioned this in the first minute of the video! Study of value indeed.
The video length of 22:22 is aestheticly pleasing to me for some reason.
I'd be interested in a video of the merits of a property market based primarily on auctions, vs one based primarily on listed prices and private offers
The A with a single ring or dot above it is pronounced as an O. So Skone. The actual Swedish pronunciation has more nuance to it but as a rule of thumb å=o . Thank you for the video, a lot of new information.
11:26 *competitive... Sorry for being that guy. Great video.
Interesting overview of the work behind this year's Nobel prize. I'd like to recommend it to my class, but the misspelled "competative" at 11:26 (should be competitive) is kind of a deal-breaker. Any way it could be fixed?
It doesn't matter. Or, you can do some minor basic editing yourself.
I’m trying to find if this style of auction has been picked up for individual property sales. It seems like just a government thing so far, in Australia,
Mostly first price auctions are popular for property. Just saw this in a related video: ua-cam.com/video/eX0CtCQjSLE/v-deo.html
Great Content Thank you!
I think my business team bid our biggest contract under this format. Didn’t realise it was cutting edge.
Stock exchanges, commodities exchanges, etc. also are auctions. Potential buyers and sellers are bidding.
Does ebay uses the english auction format or the nobel price winning one?
Great video! Just remember
11:26 It is *competitive* , not compet-a-tive
That's a surprisingly simple and obvious auction system in retrospect
i would love more nobel prize in economics videos
I would love any at all. ba-dum-chh
The dutch auction is not meant for laypersons, it is used as a means to distribute a certain reservoir of goods to merchants who know the market, and its prices, very well. They use it especially for selling the daily lot of flowers that had been delivered to Rotterdam, to wholesalers.
The initial problem and resulting solution reminds me alot of RISKS initial troop deployment strategies. Collusion, betrayal, and speculation included 😆
Your videos are really good because when you explain something I feel really stupid for not thinking of it on my own, but then I realize I do not have ANY background knowledge needed to even fanthom that something like that could exist. Well done!
Question: Do you think the new auction format the two Nobel Prize winners you mentioned created could be applied to the simple example of real estate developer vs home-shopping family bidding for a house? The developer wants two properties compared to the family wanting one. Would it then become a bidding war between only developers and not families wanting to buy a single property? Would the two parties selling their properties even want to be "bundled up" into a single offer?
Did I miss something or am I just overthinking?
The Nobel award winning examples applies to complex auctions. No need to complicate simpler types of auctions. Now if there was an auction, say, for government buildings (where price may not be the only requirement bu the seller) across the land, simultaneously, then I can see this “new” method been applied.
@@chilenozo Ah so I misunderstood the video, thanks!
Oi! Stop calling it a 'Nobel' prize.
The Dutch auction, especially in Aalsmeer, is made to sell off a great many products quickly. There's simply no time to haggle about the prices of individual, or even packs of flowers. There are so many sellers and so many buyers that the turnaround time of the products on auction must be extremely low.
Is Acorn available in Europe ? I can only see that its available only for US residents
So simple it’s brilliant
could you attach the research paper for the SMRA in the description?
Just a newbie question - if the SMRs have been around for so long, why are they only getting recognised this year for the prize?
Do we know what city is shown at 19:14? I've never seen that building before
Thank you for recognizing the achievements of Dr. Walter White
In a videogame I've seen a teeerrrrible auction that's still very intriguing.
You pay your bid. You don't get it back.
This means that it won't sell for a price that's anywhere near it's value, so the buyer gets a bargain. However the seller gets a heap-load of money from all bidders combined that didn't make it.
In this game it worked fine, although it was quite frustrating as a buyer to lose, but I wonder how this would be in real
That's a lottery.
It s also called poker
Not really an auction
I feel like the collusion behind the previous FCC auctions should've been talked about further.
11:08, and if you account for complex zoning laws and NIMBYism which also constrain the Value of a property (both Private and Common)
those roof tiles do be shaking doe 15:40
The chemistry prize is spot on...