Americans Paul R. Milgrom and Robert B. Wilson won the Nobel Prize in Economics on Monday for “improvements to auction theory and inventions of new auction formats.”

“Their discoveries have benefitted sellers, buyers and taxpayers around the world,” the Nobel Committee said, noting that the auction formats developed by the winners have been used to sell radio frequencies, fishing quotas and airport landing slots.

The winners were announced in Stockholm by Goran Hansson, secretary-general of the Royal Swedish Academy of Sciences.

The award caps a week of Nobel Prizes at a time when much of the world is experiencing the worst recession since World War II because of the impact of the coronavirus pandemic.

Technically known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, the award was established in 1969 and is now widely considered one of the Nobel prizes.

The committee said Wilson's work showed “why rational bidders tend to place bids below their own best estimate of the common value,” that is, “the value which is uncertain beforehand but, in the end, is the same for everyone.”

“(Bidders) are worried about the winner’s curse – that is, about paying too much and losing out,” the committee said.

Milgrom developed a more general theory of auctions that takes into account was is known as the “private value” of what's being sold that can vary greatly from bidder to bidder.

Speaking to reporters in Stockholm by phone after learning of his win, Wilson struggled to think of an auction he himself had participated in. But then added: “My wife points out to me that we bought ski boots on eBay. I guess that was an auction.”

Last year’s award went to two researchers from the Massachusetts Institute of Technology and a third from Harvard University, for their groundbreaking research into efforts to reduce global poverty.

Few economists could have predicted last fall that the globe would come to a virtual standstill within months, as governments closed their borders, imposed lockdowns and ordered other measures to stop the spread of COVID-19, triggering a sharp dip in business activity worldwide.

The prestigious award comes with a 10 million krona ($1.1 million) cash prize and a gold medal.

Last week, the Nobel Committee awarded the prize for physiology and medicine for discovering the liver-ravaging hepatitis C virus. The prize for physics honored breakthroughs in understanding the mysteries of cosmic black holes and the chemistry prize went to scientists behind a powerful gene-editing tool.

The literature prize was awarded to American poet Louise Gluck for her “candid and uncompromising” work. The World Food Programme won the Nobel Peace Prize for its effort to combat hunger worldwide.