Paul Milgrom has made seminal contributions to an unusually wide range of fields of economics including auctions, market design, contracts and incentives, industrial economics, economics of organizations, finance, and game theory. His work on auction theory is probably his best known. He has explored issues of design, bidding and outcomes for auctions with different rules. He designed auctions for multiple complementary items, with an eye towards practical applications such as frequency spectrum auctions.
Professor Milgrom’s research in industrial organization includes influential studies on limit pricing, entry deterrence, predation, and advertising. In addition, Milgrom has added important novel insights to finance, particularly in connection to speculative trading and market micro-structure. The common theme of his works on auctions, industrial strategies, and financial markets is that economic actors infer from prices and other observables information about the fundamental market values.
He has also contributed to agency theory by describing conditions under which linear incentives are optimal, and by developing a tractable model of multitask agency relationships. His work on contract and organization theory has been very influential in management science. Finally, Professor Milgrom has contributed to mathematical economics and game theory, with studies on reputation and adaptive learning.