William Spenser Vickrey


William Spenser Vickrey
(1914 - 1996)


Canadian-born American economist who was credited with innovations in the analysis of the problems of incomplete, or asymmetrical, information. He shared the 1996 Nobel Prize for Economics with James A. Mirrlees of Great Britain.
Vickrey's family moved to New York when he was only three months old. He was educated at Yale University (B.S., 1935) and Columbia University (M.A., 1937; Ph.D., 1947), where he taught throughout his career. A Quaker, he was a conscientious objector during World War II and spent those years doing public service and working on a new inheritance tax for Puerto Rico.

Vickrey had a keen interest in human welfare and often chose projects that had practical applications. His studies of traffic congestion concluded that pricing on commuter trains and toll roads should vary according to usage, with higher fees during peak-use periods. This congestion pricing was later adopted by electric and telephone utilities and airlines. In his doctoral thesis, published as Agenda for Progressive Taxation (1947), he advocated an "optimal income tax" that would be based on long-term earnings rather than yearly income.

In naming him for the 1996 Nobel Prize, the selection committee specifically cited his novel approach to auctioneering (now known as a Vickrey auction), which, through sealed bidding, awards the auctioned item to the highest bidder but at the sum bid by the second-highest bidder. According to Vickrey, in guaranteeing the lower price, both buyers and sellers benefit from bids that more accurately reflect the value of the item.

Vickrey, perhaps strained under the flurry of activity and scrutiny that followed the Nobel announcement, died of a heart attack just three days after being named.


 


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