William Spencer Vickrey (21 June 1914 – 11 October 1996) was a Canadian-American professor of economics and

Nobel Laureate The Nobel Prizes ( sv, Nobelpriset, no, Nobelprisen) are awarded annually by the Royal Swedish Academy of Sciences, the Swedish Academy, the Karolinska Institutet, and the Norwegian Nobel Committee to individuals and organizations who make o ...

. Vickrey was awarded the 1996

Nobel Memorial Prize in Economic Sciences The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...

with James Mirrlees for their research into the economic theory of

incentives In general, incentives are anything that persuade a person to alter their behaviour. It is emphasised that incentives matter by the basic law of economists and the laws of behaviour, which state that higher incentives amount to greater levels of ...

under

asymmetric information In contract theory and economics, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other. Information asymmetry creates an imbalance of power in transactions, which can ...

, becoming the only Nobel laureate born in

British Columbia British Columbia (commonly abbreviated as BC) is the westernmost province of Canada, situated between the Pacific Ocean and the Rocky Mountains. It has a diverse geography, with rugged landscapes that include rocky coastlines, sandy beaches, for ...

. The announcement of his Nobel Prize was made just three days prior to his death. Vickrey died while traveling to a conference of

Georgist Georgism, also called in modern times Geoism, and known historically as the single tax movement, is an economic ideology holding that, although people should own the value they produce themselves, the economic rent derived from Land (economics), ...

academics that he helped found and never missed once in 20 years. His

Columbia University Columbia University (also known as Columbia, and officially as Columbia University in the City of New York) is a private research university in New York City. Established in 1754 as King's College on the grounds of Trinity Church in Manhatt ...

economics department colleague C. Lowell Harriss accepted the posthumous prize on his behalf. There are only three other cases where a Nobel Prize has been presented posthumously.

Early years

Vickrey was born in

Victoria, British Columbia Victoria is the capital city of the Provinces and territories of Canada, Canadian province of British Columbia, on the southern tip of Vancouver Island off Canada's Pacific Ocean, Pacific coast. The city has a population of 91,867, and the Gre ...

and attended high school at

Phillips Academy ("Not for Self") la, Finis Origine Pendet ("The End Depends Upon the Beginning") Youth From Every Quarter Knowledge and Goodness , address = 180 Main Street , city = Andover, Massachusetts, Andover , stat ...

Andover, Massachusetts Andover is a town in Essex County, Massachusetts, United States. It was settled in 1642 and incorporated in 1646."Andover" in ''The New Encyclopædia Britannica''. Chicago: Encyclopædia Britannica Inc., 15th ed., 1992, Vol. 1, p. 387. As of th ...

. After obtaining his B.S. in Mathematics at

Yale University Yale University is a private research university in New Haven, Connecticut. Established in 1701 as the Collegiate School, it is the third-oldest institution of higher education in the United States and among the most prestigious in the w ...

in 1935, he went on to complete his M.A. in 1937 and

PhD PHD or PhD may refer to: * Doctor of Philosophy (PhD), an academic qualification Entertainment * '' PhD: Phantasy Degree'', a Korean comic series * '' Piled Higher and Deeper'', a web comic * Ph.D. (band), a 1980s British group ** Ph.D. (Ph.D. al ...

in 1948 at

, where he remained for most of his career.

Career

Vickrey was the first to use the tools of

game theory Game theory is the study of mathematical models of strategic interactions among rational agents. Myerson, Roger B. (1991). ''Game Theory: Analysis of Conflict,'' Harvard University Press, p.&nbs1 Chapter-preview links, ppvii–xi It has appli ...

to explain the dynamics of auctions.Vickrey, 1961 In his seminal paper, Vickrey derived several auction equilibria, and provided an early revenue-equivalence result. The

revenue equivalence theorem Revenue equivalence is a concept in auction theory that states that given certain conditions, any mechanism that results in the same outcomes (i.e. allocates items to the same bidders) also has the same expected revenue. Notation There is a set ...

remains the centrepiece of modern auction theory. The Vickrey auction is named after him. Vickrey worked on congestion pricing, the notion that roads and other services should be priced so that users see the costs that arise from the service being fully used when there is still demand. Congestion pricing gives a signal to users to adjust their behavior or to investors to expand the service in order to remove the constraint. The theory was later partially put into action in London. In

public economics Public economics ''(or economics of the public sector)'' is the study of government policy through the lens of economic efficiency and equity. Public economics builds on the theory of welfare economics and is ultimately used as a tool to improve ...

, Vickrey extended the

marginal cost pricing approach of

Harold Hotelling Harold Hotelling (; September 29, 1895 – December 26, 1973) was an American mathematical statistician and an influential economic theorist, known for Hotelling's law, Hotelling's lemma, and Hotelling's rule in economics, as well as Hotelling's ...

and showed how public goods should be provided at marginal cost and capital investment outlays financed with land value tax. Vickrey wrote that replacing taxes on production and labor ("including property taxes on improvements") with fees for holding valuable land sites "would substantially improve the economic efficiency of the jurisdiction". Vickrey further argued that land value tax had no adverse effects and that replacing existing taxes in this way would increase local productivity enough that land prices would rise instead of fall. He also made an ethical argument for

value capture, noting that owners of valuable locations still take (exclude others from) local public goods, even if they choose not to use them, so without land value tax, land users have to pay twice for those public services (once in tax to government and once in rent to holders of land title). Vickrey's

economic An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with th ...

philosophy was influenced by

John Maynard Keynes John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in ...

and

Henry George Henry George (September 2, 1839 – October 29, 1897) was an American political economist and journalist. His writing was immensely popular in 19th-century America and sparked several reform movements of the Progressive Era. He inspired the eco ...

. He was sharply critical of the

Chicago school of economics The Chicago school of economics is a neoclassical school of economic thought associated with the work of the faculty at the University of Chicago, some of whom have constructed and popularized its principles. Milton Friedman and George Stig ...

and was vocal in opposing the political focus on achieving balanced budgets and fighting

inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduct ...

, especially in times of high

unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the refe ...

. Working under

General MacArthur Douglas MacArthur (26 January 18805 April 1964) was an American military leader who served as General of the Army for the United States, as well as a field marshal to the Philippine Army. He had served with distinction in World War I, was ...

, Vickrey helped accomplish radical land reform in Japan. Vickrey had many graduate students and protegés at Columbia University, including the economists Jacques Drèze,

Harvey J. Levin Harvey Joshua Levin (July 1, 1924 – April 30, 1992) was an American economist. He was university research professor in the Department of Economics at Hofstra University (1989–92), Augustus B. Weller Professor of Economics at Hofstra (1964� ...

, and Lynn Turgeon.

Personal life

Vickrey married Cecile Thompson in 1951. He was a

Quaker Quakers are people who belong to a historically Protestant Christian set of denominations known formally as the Religious Society of Friends. Members of these movements ("theFriends") are generally united by a belief in each human's abili ...

and a member of Scarsdale

Friends Meeting A Friends meeting house is a meeting house of the Religious Society of Friends (Quakers), where meeting for worship is usually held. Typically, Friends meeting houses are simple and resemble local residential buildings. Steeples, spires, and ...

. He died in

Harrison, New York Harrison is a town in Westchester County, New York, United States, northeast of Manhattan. The population was 28,218 at the 2020 census. History Harrison was established in 1696 by a patent granted by the British government to John Harrison ...

in 1996 from heart failure.

Selected works

*
Counterspeculation, Auctions, and Competitive Sealed Tenders
, '' Journal of Finance'', 1961. The paper originated auction theory, a subfield of

. * * * *

References

External links

*
IDEAS/RePEc
* *
Jacques H. Dreze, "William S. Vickrey", Biographical Memoirs of the National Academy of Sciences (1998)
{{DEFAULTSORT:Vickrey, William 1914 births 1996 deaths Economists from New York (state) Georgist economists American Quakers American Protestants Canadian economists Canadian emigrants to the United States Nobel laureates in Economics Columbia University faculty Columbia University alumni Yale College alumni People from Victoria, British Columbia Canadian Nobel laureates Posthumous Nobel laureates People from Hastings-on-Hudson, New York 20th-century American economists 20th-century Quakers Fellows of the Econometric Society Presidents of the American Economic Association Distinguished Fellows of the American Economic Association Members of the United States National Academy of Sciences