Neighbour wakes up academic in the middle of the night to tell him they won the Nobel Prize

Security camera footage shows Paul Milgrom break the news to Robert Wilson

An academic found out he had won the Nobel Prize for economics when his neighbour and fellow winner knocked on his door in the middle of the night and shared the good news.

Paul Milgrom, 72, and Robert Wilson, 83, both from Stanford University, won the coveted prize for work which will help auctions run more efficiently.

Security camera footage from Mr Milgrom’s home showed Mr Wilson enthusiastically knocking on his door during the night.

“Paul,” he said. “It’s Bob Wilson. You’ve won the Nobel Prize."

Mr Milgrom can be heard to stammer before simply replying: “Wow.”

Stanford University said Mr Milgrom’s wife, who is in Stockholm, Sweden, a security-camera notification on her phone when Mr Milgrom knocked on the door.

“She got to watch live as Wilson told Milgrom he'd won the Nobel Prize,” the university said.

The Nobel Committee said the pair’s discoveries “have benefited sellers, buyers and taxpayers around the world”.

The two men looked at how to make auctions work efficiently.

The committee said Mr Wilson's work showed "why rational bidders tend to place bids below their own best estimate of the common value" — potentially meaning the item goes for less than it is worth and perhaps not to the buyer who most wants it.

Mr Milgrom complemented the research with theories on “private values”, when the perceived value of something differs from bidder to bidder.

He demonstrated that an auction format will give the seller higher expected revenue when bidders learn more about each other’s estimated values during the bidding process.

Last year's award went to three researchers whose work focused on efforts to reduce global poverty.

Additional reporting by agencies