Great Lakes Institute of Management hosts 2020 Nobel Laureate Robert Wilson at the Annual Finance Conference

Chennai. Great Lakes Institute of Management hosted its 11th Annual Finance Conference virtually on 17th December 2020 with Economics Nobel Laureate Prof. Robert Wilson as Chief Guest and Dr Rajat Kathuria as Keynote Speaker.

The conference began with an address from the chief guest, the 2020 Nobel Laureate in Economic Sciences, Prof. Robert Wilson, who is also the Adams Distinguished Professor of Management, Emeritus, Graduate School of Business, Stanford University followed by the address of the keynote speaker Dr Rajat Kathuria, Director and Chief Executive, Indian Council for Research on International Economic Relations, New Delhi. The theme of the conference was ‘Strategy of Auctions and the way forward for India’.

Students, faculty, staff, and other guests attended the virtual conference with the economic stalwarts. In his address, Prof Wilson said “In the early years of the initial spectrum auctions, it was uncertain if the technology would even work and uncertainty about what would be the market penetration.

At the time in the US the company we worked with estimated an upper cap of 30% market penetration. Look at the world now; there are more phones than there are households. So, this was a case of extreme estimation error for the sellers, but firms profited enormously over time.”

Prof Wilson while answering the questions of strategies in auctions, explained the ‘use it or lose it’ rule, exposure and problem. With a few real situations, he taught the students, how to tackle a ‘snake in the grass’ kind of bidder.

Further to that, he said, “Companies want to bid to win; they want the minimum bid that is sure to win. They are only concerned about the probability of winning, and rarely consider how that interacts with the value of actually having won.”

Prof. Wilson, easily explained winner curse by saying “It is important to look at the common value component of public goods on auctions, which are the features that affect everybody’s valuation. When oil companies bid for leases everybody is concerned with a few key attributes like: whether the oil is there, how much, at what price can the oil be sold.

All bidders are trying to estimate the same thing, and no matter how unbiased these estimates, will always be subject to error. In fact, these estimates are so imperfect that two companies can look at the same seismic output and come up with completely different estimates. The one who wins is the one with the highest estimate, even though ex-ante, the estimate appeared unbiased it is revealed after the fact to be biased.”

With Prof Wilson’s address, Prof Sanjoy Sircar (Professor of Finance, Great Lakes) set the tone for the keynote address. He explained the current auction trends in India with a few examples. With that, the Keynote address was delivered by Dr Kathuria on several aspects and spectrums including the allocation models, value determination, and spectrum scarcity of India.

While evaluating the spectrums of India, Dr Kathuria said “Spectrum is a quasi-public good which can provide substantial welfare and social benefits. So ultimately the challenge that the government faces is, how to manage the trade-off between its revenue objectives and social welfare objective.”

Dr Suresh Ramanathan, Dean & Principal at Great Lakes said, “Great Lakes Institute of Management has always tried to leverage its unique global network and bring the sharpest academic minds from around the world to our students.

The opportunity to interact with an eminent personality and a Nobel laureate like Professor Robert B. Wilson will challenge young minds to learn and experience what cutting edge knowledge is like. We are confident that this webinar spurred conversation and excitement in the inquisitive minds attending the finance and banking conference hosted by Great Lakes.