“No doubt mechanism design, and the general problem of inducing truth-telling, will be with us forever. But how practical are these general results? Or have the theorists simply provided us with cautionary notes and left the real applications to the context-specific world of practice?
Did these guys get at the real reasons why we don't organize the entire economy as a second-price auction?
Part of me thinks: "Hey, let's say Natasha wants Yana to tell her the truth about when she will clean her room. This stuff isn't useful!"
Another part of me thinks: "It is most important to get theory right. These guys are brilliant. Only the philistines demand that all scientific contributions have immediate applications....
Some of you might argue: "These guys have already had a big impact on real world auctions and incentive schemes." In terms of the induced improvement in human
welfare, I find that a difficult case to make. The important progress has come from recognizing much simpler truths about incentives.”
It all shows how I have aged – 20 years ago I would have objected loudly to the negativity I display here. 'The bloody philistine!' I can imagine myself saying. Now I like congestion pricing and the economics of tobacco smoking. To totally bury my chances of ever being seen as having any sophistication I have to say that from my perspective a better choice for the Nobel gong would have been an economist like William Baumol.