I have been remiss in not offering public congratulations to Stanford economist Jon Levin, who recently became the latest recipient of the John Bates Clark Medal, given annually by the American Economic Association to the most promising economist under the age of 40.
Levin is best known for his contributions to economic theory, but my favorite paper of his is one that is quite applied. Levin and co-authors describe their efforts to help a wireless carrier bid more effectively in a government-run spectrum auction.
As noted in a blog post I wrote at the time, the strategies engineered by Levin’s team generated $1 billion in surplus for the company that hired them. The economists did, however, make one dreadful mistake: they agreed to be paid by the hour instead of getting a share of the surplus.