View source for William Vickrey

{{Short description|Canadian-American economist and Nobel Laureate (1914–1996)}}
{{For|the art dealer|William Kingston Vickery}}
{{Infobox economist
| name              = William Vickrey
| image             = William Vickrey.gif
| image_size        = 180px
| caption           =
| birth_date        = {{birth date|1914|06|21|df=y}}
| birth_place       = [[Victoria, British Columbia]], Canada
| death_date        = {{death date and age|1996|10|11|1914|06|21|df=y}}
| death_place       = [[Harrison, New York]], [[United States|U.S.]]
| nationality       = Canadian
| institution       = [[Columbia University]]
| field             = [[Social choice theory]] and [[mechanism design]]
| school_tradition  = [[Georgism|Georgist]]
| doctoral_advisor  = [[Carl Shoup]]<br>[[Robert M. Haig]]
| academic_advisors =
| doctoral_students = [[David Colander]]<br>[[Jacques Drèze]]
| notable_students  =
| influences        = [[Henry George]]<br>[[Harold Hotelling]]<br>[[John Maynard Keynes]]
| contributions     = [[Vickrey auction]]<br>[[Revenue equivalence theorem]]<br>[[Congestion pricing]]
| awards            = {{unbulleted list|[[Nobel Memorial Prize in Economics]] (1996)|[[Guggenheim Fellowship]] (1955)}}
| signature         = <!-- File name only. -->
| repec_prefix      = e
| repec_id          = pvi9
|education=[[Yale University]] ([[Bachelor of Science|BS]])<br />[[Columbia University]] ([[Master of Arts|MA]], [[PhD]])}}
{{Template:Georgism|intellectuals}}
'''William Spencer Vickrey''' (21 June 1914 – 11 October 1996) was a Canadian-American professor of economics. He was a lifelong faculty member at [[Columbia University]]. A theorist who worked on [[public economics]] and mechanism design, Vickrey primarily discussed public policy problems. He originated the [[Vickrey auction]], introduced the concept of [[congestion pricing]] in networks, formalized arguments for [[marginal cost pricing]], and contributed to optimal income taxation. [[James Tobin]] described him as "an applied economist's theorist, as well as a theorist's applied economist."<ref name = "Arnott">{{cite journal|title=William Vickrey; Contributions to Public Policy|first=Richard|last=Arnott|url=http://fmwww.bc.edu/ec-p/wp387.pdf|date=February 1998 |journal=International Tax and Public Finance |volume=5 |pages=95–113|doi=10.1023/A:1008672627120 }}</ref>

Vickrey was awarded the 1996 [[Nobel Memorial Prize in Economic Sciences]] with [[James Mirrlees]] for their research into the economic theory of [[incentives]] under [[asymmetric information]]. Vickrey never personally received the Prize; it was announced just three days prior to his death.

== Early years ==
Vickrey was born in [[Victoria, British Columbia]] to Charles Vernon Vickrey, a Congregationalist minister, and Ada Eliza Spencer. The family moved to New York City in William's childhood, where his father was General Secretary of the [[Near East Foundation|American Committee for Armenian and Syrian Relief]], one of the nation's first humanitarian assistance organizations.<ref name="Read">{{cite book |last=Read |first=Colin |title=The Public Financiers: Ricardo, George, Clark, Ramsey, Mirrlees, Vickrey, Wicksell, Musgrave, Buchanan, Tiebout, and Stiglitz |year=2016 |publisher=Springer}}</ref>

Vickrey attended high school at [[Phillips Academy]] in [[Andover, Massachusetts]]. After obtaining his [[Bachelor of Science|B.S.]] in Mathematics at [[Yale University]] in 1935, he went on to complete his M.A. at [[Columbia University]] in 1937. He stayed at Columbia for a [[PhD]], which he completed 1948 with a 500-page dissertation entitled "An Agenda for Progressive Taxation."<ref name="Arnott"/> Vickrey's doctoral work was interrupted by [[World War II]], when he was enlisted to work for the U.S. [[National Resources Planning Board]] and later the [[United States Department of Treasury|Treasury Department]]'s  Division of Tax Research.<ref name="Read"/>

==Career==
Vickrey remained at Columbia for his entire career. His students included the economists [[Jacques Drèze]], [[Harvey J. Levin]],<ref>{{cite web| url = http://harveyjlevin.com/personal_tributes.htm#mitchell| title = Harvey J. Levin}}</ref> and Lynn Turgeon.<ref>{{cite news| url = https://www.nytimes.com/1999/03/16/business/e-lynn-turgeon-economics-professor-78.html| title = Lynn Turgeon| newspaper = The New York Times| date = 16 March 1999}}</ref>

===Contributions===
Vickrey was the first to use the tools of [[game theory]] to explain the [[auction theory|dynamics of auctions]].<ref name=auction>{{cite journal |last=Vickrey |first=William |title=Counterspeculation, Auctions, and Competitive Sealed Tenders |journal=[[Journal of Finance]] |year= 1961 |volume=16 |issue=1 |pages=8–37 |doi=10.2307/2977633 |jstor=2977633 |url= https://www.jstor.org/stable/2977633|url-access=subscription }}</ref> 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.<ref name=auction/>

Vickrey worked on [[congestion pricing]], the notion that roads and other services should be priced so that users see the costs that arise from the service being fully used when there is still demand.<ref>{{cite web|url=http://www.columbia.edu/cu/pr/96/18968.html|title=Nobelist William S. Vickrey: Practical Economic Solutions to Urban Problems |publisher=[[Columbia University]]|date=1996-10-08|access-date=2009-03-27}}</ref><ref name="NYT0207">{{cite news | author = Daniel Gross|date = 2007-02-17|url=https://www.nytimes.com/2007/02/11/business/yourmoney/11view.html|title= What's the Toll? It Depends on the Time of Day|newspaper=The New York Times|access-date=2008-07-15|author-link = Daniel Gross (journalist)}}</ref><ref>{{cite web |last=Litman |first=Todd |website=Victoria Transport Policy Institute|year=1992  |url=http://www.vtpi.org/vickrey.htm  |title=Principles of Efficient Congestion Pricing – William Vickrey  |access-date=2009-03-10  }}</ref><ref>{{Cite news | url=https://www.bbc.com/news/business-49986191 | title=Is surge pricing a fair way to manage demand?| work=BBC News| date=13 November 2019| last1=Harford| first1=Tim}}</ref> 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 [[London congestion charge|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.<ref>{{cite conference|last=Gaffney |first=Mason |title=Red-Light Taxes and Green-Light Taxes |conference=Sharing Our Common Heritage: Resource Taxes and Green Dividends |location=Mansfield College, Oxford |date=14 May 1998 |url=http://www.wealthandwant.com/docs/Gaffney_RLT&GLT.html |quote=Georgists need to introspect deeply over this case, and many like it, and master the theory and practice of marginal-cost pricing as developed so ably by closet Georgist economists like Harold Hotelling and William Vickrey}}</ref> He contended that efficient funding for public utilities and transportation systems required short-run marginal pricing, or pricing responsive to current demand.<ref name = "Arnott" />

Alongside marginal cost pricing, Vickrey argued that the [[land value tax]] was necessary to efficiently fund city services. He wrote that replacing taxes on production and labor ("including property taxes on improvements") with fees for holding valuable land sites "would substantially improve the economic efficiency of the jurisdiction".<ref>Vickrey, William. "The Corporate Income Tax in the U.S. Tax System, 73 Tax Notes 597, 603 (1996). Quote: "Removing almost all business taxes, including property taxes on improvements, excepting only taxes reflecting the marginal social cost of public services rendered to specific activities, and replacing them with taxes on site values, would substantially improve the economic efficiency of the jurisdiction."</ref> 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).<ref>Vickrey, William. Remarks at The Henry George School of New York, 1993. http://www.cooperative-individualism.org/land-question_t-z.htm</ref>

Vickrey's [[economic]] philosophy was influenced by [[John Maynard Keynes]] and [[Henry George]].<ref>Turgeon, Lynn. Bastard Keynesianism : the evolution of economic thinking and policymaking since World War II. Westport, Conn: Praeger, 1997</ref> 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.<ref>Gaffney, Mason. ''[[The Corruption of Economics]]''. London: Shepheard-Walwyn in association with Centre for Incentive Taxation, 2006 http://masongaffney.org/publications/K1Neo-classical_Stratagem.CV.pdf</ref>

===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.<ref>{{cite magazine |last=Netzer |first=Dick |date=November 1996 |title=Remembering William Vickrey |magazine=Land Lines |volume=8 |issue=6 |url=https://www.lincolninst.edu/publications/articles/remembering-william-vickrey/|access-date=2 September 2016}}</ref><ref>{{cite news|last1=Gaffney|first1=Mason|title=Warm Memories of Bill Vickrey|url=http://www.cooperative-individualism.org/gaffney-mason_warm-memories-of-bill-vickrey-1997.htm|access-date=15 November 2016|publisher=Land & Liberty}}</ref> 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).<ref>{{cite web |title=Nobel Prize facts |url=https://www.nobelprize.org/prizes/facts/nobel-prize-facts/ |website=The Nobel Prize |access-date=18 September 2023 |quote=Section Posthumous Nobel Prizes}}</ref>

== Personal life ==
Vickrey married Cecile Thompson in 1951. He was a [[Quaker]] and a member of [[Scarsdale]] [[Friends meeting house|Friends Meeting]].<ref>{{cite web| url = https://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1996/vickrey-bio.html| title = William Vickrey – Biographical}}</ref> He died in [[Harrison, New York]] in 1996 from heart failure.

== Selected works ==
===Articles===
* {{cite journal |last=Vickrey |first=William |title=Counterspeculation, Auctions, and Competitive Sealed Tenders |journal=[[Journal of Finance]] |year= 1961 |volume=16 |issue=1 |pages=8–37 |doi=10.2307/2977633 |jstor=2977633 |url= https://www.jstor.org/stable/2977633|url-access=subscription }} The paper originated [[auction theory]], a subfield of [[game theory]].
* {{cite journal |last=Vickrey |first=William |author-mask = –– |title=Pricing in Urban and Suburban Transport |journal=American Economic Review |year=1963 |volume=53 |number=2 |url=https://www.jstor.org/stable/1823886 |pages=452–465|jstor=1823886 }}
* {{cite book |last=Vickrey |first=William |author-mask = –– |chapter=General and Specific Financing of Urban Service |title=Public Expenditure Decisions in the Urban Community |year=1963 |editor-last = Shaller |editor-first=H.G. |pages=62–90}}
* {{cite journal |last=Vickrey |first=William |author-mask = –– |title=Congestion Theory and Transport Investment |journal=American Economic Review |year=1969 |volume=59 |number=2 |url=https://www.jstor.org/stable/1823678 |pages=251–260|jstor=1823678 }}
* {{cite book |last=Vickrey |first=William |author-mask = –– |chapter=The City as a Firm | title =The Economics of Public Services |editor1-last=Feldstein |editor1-first=Martin |editor2-last=Inman |editor2-first=Robert P. |pages=334–343 |year=1977 |chapter-url=https://link.springer.com/chapter/10.1007/978-1-349-02917-4_13 |publisher=Palgrave Macmillan|doi=10.1007/978-1-349-02917-4_13 |isbn=978-1349029198 }}
* {{cite journal |last=Vickrey |first=William |author-mask = ––  |title=Automobile Accidents, Tort Law, Externalities, and Insurance, an Economists's Critique |journal=Law and Contemporary Problems |volume = 33 |year=1968 |issue=3 |pages=464–487 |doi=10.2307/1190938 |jstor=1190938 |url=https://scholarship.law.duke.edu/lcp/vol33/iss3/3/|url-access=subscription }}
* {{cite journal |last1 = Vickrey |first1 = William |last2 = Solow |first2 = Robert |author2-link=Robert Solow |title=Land Use in a Long, Narrow City |journal=Journal of Economic Theory |year=1971 |volume = 3 |issue =4 |pages =430–447 |doi= 10.1016/0022-0531(71)90040-8}}

===Essays===
* {{cite book |last= Vickrey |first=William |author-mask = –– |chapter = Ethics and Economics: An Exchange of Questions between Economics and Philosophy |title= Goals of Economic Life |editor-last=Ward |editor-first=A.D. |year =1950 |pages=148–77}}
* {{cite web | url = http://www.columbia.edu/dlc/wp/econ/vickrey.html | title = Fifteen Fatal Fallacies of Financial Fundamentalism: A Disquisition on Demand Side Economics | date = October 5, 1996 }}

===Textbooks===
* {{cite book |last=Vickrey |first=William |author-mask = –– |title=Microstatics |year=1964 |publisher = Harcourt, Brace & World}}
* {{cite book |last=Vickrey |first=William |author-mask = –– |title=Metastatics and Macroeconomics |year=1964 |publisher = Harcourt, Brace & World}}

===Collected works===
* {{cite book |editor1=Arrow, Kenneth Joseph |editor2=Arnott, Richard J. |editor3=Atkinson, Anthony A. |editor4=Drèze, Jacques |title=Public Economics: Selected Papers by William Vickrey |publisher=Cambridge University Press |location=Cambridge, UK |year=1997 |isbn=978-0521597630 }}

== See also ==
* [[Electricity market]]
* [[London congestion charge]]
* [[Road pricing]]
* [[Vickrey auction]]

== References ==
{{reflist}}

== Further reading ==
{{refbegin}}
* {{cite journal|title=William Vickrey; Contributions to Public Policy|first=Richard|last=Arnott|url=http://fmwww.bc.edu/ec-p/wp387.pdf|date=February 1998 |journal=International Tax and Public Finance |volume=5 |pages=95–113|doi=10.1023/A:1008672627120 }}
* {{cite book|editor1=Richard Arnott |editor2=Anthony B. Atkinson |editor3=Kenneth Arrow |editor4=Jacques H. Drèze|title=Public Economics; Selected Papers by William Vickrey|url=https://archive.org/details/trent_0116404320297|url-access=registration|publisher=Cambridge University Press|year=1994|isbn=978-0521454391 }}
* {{cite web |last1=Warsh |first1=David |title=Laureate's untimely death a 'cosmic ripoff' |url=https://www.chicagotribune.com/news/ct-xpm-1996-10-14-9610140129-story.html |publisher=Chicago Tribune |access-date=18 September 2023 |date=14 October 1996}}
{{refend}}

== External links ==
{{Wikiquote}}
* {{Nobelprize}}
* [https://ideas.repec.org/e/pvi9.html IDEAS/RePEc]
* {{cite encyclopedia|title=William S. Vickrey (1914–1996)|url=http://www.econlib.org/library/Enc/bios/Vickrey.html|encyclopedia=[[The Concise Encyclopedia of Economics]]|edition=2nd|series=[[Library of Economics and Liberty]]|publisher=[[Liberty Fund]]|year=2008|isbn=978-0865976665 |editor-first=David R.|editor-last=Henderson |editor-link=David R. Henderson |pages=600–601 }}
* {{cite web|title=William Vickrey|url=https://www.jstor.org/action/doBasicSearch?Query=au%3A%22William+Vickrey%22|publisher=[[JSTOR]]}}
* [http://www.nasonline.org/publications/biographical-memoirs/memoir-pdfs/vickrey-william.pdf Jacques H. Dreze, "William S. Vickrey", Biographical Memoirs of the National Academy of Sciences (1998)]

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{{s-bef|before=[[Robert E. Lucas Jr.]]}}
{{s-ttl|title=[[List of Nobel Memorial Prize laureates in Economics|Laureate of the Nobel Memorial Prize in Economics]]|years=1996|alongside=[[James A. Mirrlees]]}}
{{s-aft|after=[[Robert C. Merton]]|after2=[[Myron S. Scholes]]}}
{{s-end}}
{{Keynesians}}
{{Nobel laureates in economics 1976–2000}}
{{1996 Nobel Prize winners}}
{{Presidents of the American Economic Association}}
{{Authority control}}

{{DEFAULTSORT:Vickrey, William}}
[[Category:1914 births]]
[[Category:1996 deaths]]
[[Category:Economists from New York (state)]]
[[Category:Georgist economists]]
[[Category:American Quakers]]
[[Category:American Protestants]]
[[Category:Canadian economists]]
[[Category:Canadian emigrants to the United States]]
[[Category:Nobel laureates in Economics]]
[[Category:Columbia University faculty]]
[[Category:Phillips Academy alumni]]
[[Category:Columbia University alumni]]
[[Category:Yale College alumni]]
[[Category:Academics from Victoria, British Columbia]]
[[Category:Canadian Nobel laureates]]
[[Category:Posthumous Nobel laureates]]
[[Category:People from Hastings-on-Hudson, New York]]
[[Category:20th-century American economists]]
[[Category:20th-century Quakers]]
[[Category:Fellows of the Econometric Society]]
[[Category:Presidents of the American Economic Association]]
[[Category:Distinguished fellows of the American Economic Association]]
[[Category:Members of the United States National Academy of Sciences]]
[[Category:Game theorists]]