Vickrey remained at Columbia for his entire career. His students included the economists
Jacques Drèze,
Harvey J. Levin, and Lynn Turgeon.
Contributions Vickrey was the first to use the tools of
game theory to explain the
dynamics of auctions. In his seminal paper, Vickrey derived several auction equilibria, and provided an early revenue-equivalence result. The
revenue equivalence theorem remains the centrepiece of modern auction theory. The
Vickrey auction is named after him. 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, Vickrey extended the
marginal cost pricing approach of
Harold Hotelling and showed how public goods should be provided at marginal cost. He contended that efficient funding for public utilities and transportation systems required short-run marginal pricing, or pricing responsive to current demand. 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
Georgist 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 philosophy was influenced by
John Maynard Keynes and
Henry George. He was sharply critical of the
Chicago school of economics and was vocal in opposing the political focus on achieving
balanced budgets and fighting
inflation, especially in times of high
unemployment. Working under
General MacArthur, Vickrey helped accomplish radical land reform in Japan.
Nobel Prize award and death Vickrey's Nobel Prize in Economics was announced on October 8, 1996. He became the only Nobel laureate born in
British Columbia. Vickrey died three days later while traveling to a conference of
Georgist academics that he helped found. His
Columbia University 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:
Erik Axel Karlfeldt (Literature 1931),
Dag Hammarskjöld (Peace 1961) and
Ralph Steinman (Physiology or Medicine 2011). == Personal life ==