Robert B. Wilson
Encyclopedia
Robert Butler "Bob" Wilson, Jr. (born May 16, 1937) is an American
economist
and the Adams Distinguished Professor of Management, Emeritus at Stanford University
. He is known for his contributions to management science
and business economics
. His doctoral thesis introduced sequential quadratic programming
, which became a leading iterative method
for nonlinear programming
. With other mathematical economists at the Stanford Business School, he helped to reformulate the economics of industrial organization
and organization theory using non-cooperative game theory. His research on nonlinear pricing
has influenced policies for large firms, particularly in the energy industry, especially electricity.
. He graduated from a high school in Nebraska and earned a full ride scholarship to Harvard University
. He received his A.B.
from Harvard College
in 1959. He then completed his M.B.A.
in 1961 and his D.B.A
. in 1963 from the Harvard Business School
. He worked at the University of California, Los Angeles
for a very brief time and then joined the faculty at Stanford University
. He has been on the faculty of the Stanford Business School since 1964. He was also an affiliated faculty member of Harvard Law School
from 1993 to 2001.
Wilson's paper “The Theory of the Syndicates,” which was published in Econometrica
in 1968 influenced a whole generation of students from economics, finance, and accounting. The paper poses a fundamental question: Under what conditions does the expected utility representation describe the behavior of a group of individuals who choose lotteries and share risk in a Pareto-optimal way?
He has published about a hundred articles in professional journals and books since completing his education. He has been an associate editor of several journals, and delivered several public lectures.
On problems of pricing strategy, he has advised the United States Department of the Interior and oil companies on bidding for offshore leases; the Electric Power Research Institute on pricing of electric power, design of priority service systems, design of wholesale markets, funding of basic research, and risk analysis of environmental hazards and climate change; and the Xerox Palo Alto Research Center on pricing product lines in high technology industries. With Paul Milgrom he designed for Pacific Bell the auction of spectrum licenses adopted by the FCC, and subsequently worked on the bidding strategy team, and later for other firms. He also contributed to the designs of the power exchange and auctions of ancillary services in California, and he has continued to advise EPRI, the California Power Exchange, the California, New England, and Ontario System Operators, the Canadian Competition Bureau, Energy Ministries of several countries, and others involved in the design of auctions for electricity, power and gas transmission, and telecommunications in the United States and elsewhere. His designs of other auctions have been adopted by private firms. He has been an expert witness on antitrust and securities matters.
He also published the book on Nonlinear Pricing (Oxford Press, 1993). It is an encyclopedic analysis of tariff design and related topics for public utilities, including power, communications, and transport and the book won the 1995 Leo Melamed Prize, a prize awarded biannually by the University of Chicago for “outstanding scholarship by a business professor.” His contributions on game theory includes wage bargaining and strikes, and in legal contexts, settlement negotiations. He has authored some of the basic studies of reputational effects in predatory pricing
, price wars, and other competitive battles.
.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
and the Adams Distinguished Professor of Management, Emeritus at Stanford University
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
. He is known for his contributions to management science
Operations research
Operations research is an interdisciplinary mathematical science that focuses on the effective use of technology by organizations...
and business economics
Business economics
Business economics as a field in applied economics uses economic theory and quantitative methods to analyze business enterprises and the factors contributing to the diversity of organizational structures and the relationships of firms with labour, capital and product markets...
. His doctoral thesis introduced sequential quadratic programming
Sequential quadratic programming
Sequential quadratic programming is an iterative method for nonlinear optimization. SQP methods are used on problems for which the objective function and the constraints are twice continuously differentiable....
, which became a leading iterative method
Iterative method
In computational mathematics, an iterative method is a mathematical procedure that generates a sequence of improving approximate solutions for a class of problems. A specific implementation of an iterative method, including the termination criteria, is an algorithm of the iterative method...
for nonlinear programming
Nonlinear programming
In mathematics, nonlinear programming is the process of solving a system of equalities and inequalities, collectively termed constraints, over a set of unknown real variables, along with an objective function to be maximized or minimized, where some of the constraints or the objective function are...
. With other mathematical economists at the Stanford Business School, he helped to reformulate the economics of industrial organization
Industrial organization
Industrial organization is the field of economics that builds on the theory of the firm in examining the structure of, and boundaries between, firms and markets....
and organization theory using non-cooperative game theory. His research on nonlinear pricing
Nonlinear pricing
Nonlinear pricing is a broad term that covers any kind of price structure in which there is a nonlinear relationship between price and the quantity of goods. An example is affine pricing.- References and links :...
has influenced policies for large firms, particularly in the energy industry, especially electricity.
Academic career
Wilson was born on May 16, 1937 in NebraskaNebraska
Nebraska is a state on the Great Plains of the Midwestern United States. The state's capital is Lincoln and its largest city is Omaha, on the Missouri River....
. He graduated from a high school in Nebraska and earned a full ride scholarship to Harvard University
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
. He received his A.B.
Bachelor of Arts
A Bachelor of Arts , from the Latin artium baccalaureus, is a bachelor's degree awarded for an undergraduate course or program in either the liberal arts, the sciences, or both...
from Harvard College
Harvard College
Harvard College, in Cambridge, Massachusetts, is one of two schools within Harvard University granting undergraduate degrees...
in 1959. He then completed his M.B.A.
Master of Business Administration
The Master of Business Administration is a :master's degree in business administration, which attracts people from a wide range of academic disciplines. The MBA designation originated in the United States, emerging from the late 19th century as the country industrialized and companies sought out...
in 1961 and his D.B.A
Doctor of Business Administration
The degree of Doctor of Business Administration, abbreviated, or and equivalent to , is a research doctorate in business administration. The D.B.A...
. in 1963 from the Harvard Business School
Harvard Business School
Harvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
. He worked at the University of California, Los Angeles
University of California, Los Angeles
The University of California, Los Angeles is a public research university located in the Westwood neighborhood of Los Angeles, California, USA. It was founded in 1919 as the "Southern Branch" of the University of California and is the second oldest of the ten campuses...
for a very brief time and then joined the faculty at Stanford University
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
. He has been on the faculty of the Stanford Business School since 1964. He was also an affiliated faculty member of Harvard Law School
Harvard Law School
Harvard Law School is one of the professional graduate schools of Harvard University. Located in Cambridge, Massachusetts, it is the oldest continually-operating law school in the United States and is home to the largest academic law library in the world. The school is routinely ranked by the U.S...
from 1993 to 2001.
Research
Wilson is known for research and teaching on market design, pricing, negotiation, and related topics concerning industrial organization and information economics. He is an expert on game theory and its applications. He has been a major contributor to auction designs and competitive bidding strategies in the oil, communication, and power industries, and to the design of innovative pricing schemes. His work on pricing of priority service for electric power has been implemented in the utility industry.Wilson's paper “The Theory of the Syndicates,” which was published in Econometrica
Econometrica
Econometrica is a peer-reviewed academic journal of economics, publishing articles not only in econometrics but in many areas of economics. It is published by the Econometric Society and distributed by Wiley-Blackwell. Econometrica is one of the most highly ranked economics journals in the world...
in 1968 influenced a whole generation of students from economics, finance, and accounting. The paper poses a fundamental question: Under what conditions does the expected utility representation describe the behavior of a group of individuals who choose lotteries and share risk in a Pareto-optimal way?
He has published about a hundred articles in professional journals and books since completing his education. He has been an associate editor of several journals, and delivered several public lectures.
On problems of pricing strategy, he has advised the United States Department of the Interior and oil companies on bidding for offshore leases; the Electric Power Research Institute on pricing of electric power, design of priority service systems, design of wholesale markets, funding of basic research, and risk analysis of environmental hazards and climate change; and the Xerox Palo Alto Research Center on pricing product lines in high technology industries. With Paul Milgrom he designed for Pacific Bell the auction of spectrum licenses adopted by the FCC, and subsequently worked on the bidding strategy team, and later for other firms. He also contributed to the designs of the power exchange and auctions of ancillary services in California, and he has continued to advise EPRI, the California Power Exchange, the California, New England, and Ontario System Operators, the Canadian Competition Bureau, Energy Ministries of several countries, and others involved in the design of auctions for electricity, power and gas transmission, and telecommunications in the United States and elsewhere. His designs of other auctions have been adopted by private firms. He has been an expert witness on antitrust and securities matters.
He also published the book on Nonlinear Pricing (Oxford Press, 1993). It is an encyclopedic analysis of tariff design and related topics for public utilities, including power, communications, and transport and the book won the 1995 Leo Melamed Prize, a prize awarded biannually by the University of Chicago for “outstanding scholarship by a business professor.” His contributions on game theory includes wage bargaining and strikes, and in legal contexts, settlement negotiations. He has authored some of the basic studies of reputational effects in predatory pricing
Predatory pricing
In business and economics, predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors. If competitors or potential competitors cannot sustain equal or lower prices...
, price wars, and other competitive battles.
Honors
Wilson has received many honors for his work. He is a member of the National Academy of Sciences, a designated ‘distinguished fellow’ of the American Economic Association, and a fellow, former officer and Council member of the Econometric Society. He was conferred an honorary Doctor of Economics degree in 1986 by the Norwegian School of Economics and Business Administration. In 1995, he was conferred an honorary Doctor of Laws degree by the University of ChicagoUniversity of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
.