William Vickrey

William Vickrey , (born on June 21st 1914, with Victoria in Colombia-British, and dead on October 11th 1996 in the State of New York) was an American economist. Professor with the University of Columbia, his career was crowned in 1996 by the “Nobel Prize” of economy. He died three days after its nomination is announced, and the handing-over of medal was thus done on a purely posthumous basis.

Work

Vickrey received the price with James Mirrlees for his research on the theory of the incentives under imperfect information. It described there situations with asymmetry of information, where for example, the policy-holder knows some more about his health than the insurer.

He also carried out important work on the phenomena of congestion. For him, the roads and other services would have, to correctly function, be indexed by a system of price, so that the users could take account of the consecutive increase in the production costs with an increase in demand. The indexing by the prices would give a signal to the consumers and to users of a service, so that they adjust their behaviors with the situation of saturation, but also to the investors, who would extend their investments with an aim of increasing their offer. Its theory was partly application in the town of London.

It also gave its name to the Enchère of Vickrey. It is a system of bidding which one can summarize as follows: in a process of bidding under envelope, the batch is allotted to the encherissor highest offerer, but to the price of the second encherissor. Vickrey showed, in game theory, the validity of this system of bidding.

A post-keynésien

Vickrey was the only economist Post-keynésien to have received the Prix of the Bank of Sweden in economic scenes in memory of Alfred Nobel, but it accepted the reward for former work which was of orthodoxe nature. Vickrey as a post-keynésien, affirmed that the contemporary economies suffered from an insufficiency of the total request. He preached broad public deficits in order to restore full employment. He was also opposed to the restrictions on the budget deficits imposed by the Traité of Maastricht.

Bonds

an explanation of the system of bidding of Vickrey.

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