What happens when economists think like engineers?

This year's Nobel Prize rewards two economists who developed cutting-edge theory and put it into practice

by transforming the humble auction.

You're listening to Money Talks on Economist Radio, our weekly podcast on the markets,

the economy and the world of business.

I'm Rachshan Bog, finance editor at The Economist. And coming up, the hundred billion dollar bet that didn't pay off. Why Soft Banks Vision Fund has failed to deliver.

There have been some pretty big chunky

losses on some of the investments and we work as the obvious example.

And Brace for Impact, how investors are hedging against the risk of post-election chaos in America.

Usually there's additional uncertainty pricing around events but the level that is pricing around this election

seems inordinately high. But first, as the Secretary of the Royal Swedish Academy of Sciences announced this year's winners of the Nobel Prize for economics,

he did something unusual.

He pulled out a small wooden gavel and wrapped it smartly on the table.

The first one of the three years. on the table. The table. Because this year's prize is all about auctions.

It goes to Robert Wilson and Paul Milgram, both of Stanford University. Together, they've expanded the

understanding of how auctions work and use that knowledge to design new kinds of auctions

for things that would otherwise be difficult to sell, such as radio frequencies.

I spoke to Paul Milgram just a few hours after he found out about the prize, alongside

his former student, Sylvia Consulate Battilana, together they run a company auction

which puts auction theory into practice.

Hi Paul, I'm Rachner from the Economist. Many congratulations.

Hello. Thank you. Tell us how you found out about the... Many congratulations. Hi. Hi.

...