Stockholm, (DPA) The Nobel Prize for Economics was awarded Monday to Leonid Hurwicz, Eric Maskin and Roger Myerson of the United States, the Royal Swedish Academy of Sciences announced, citing the trio’s work in the field of mechanism theory.
The Academy said the three had “laid the foundations of mechanism theory,” which deals with the design of economic institutions.
Hurwicz, who was born 1917 in Moscow and is professor emeritus of economics at the University of Minnesota in Minneapolis, laid the basis for mechanism design theory, the Academy said.
The theory aimed at helping economists to understand, for instance, “what trading mechanisms will realize the largest gains from trade?” the citation said.
Maskin and Myerson “further enhanced” the theory that also deals with the allocation of resources in fields including regulation schemes and voting, the Academy said.
The mechanism design theory “shows why an auction is typically the most efficient institution for the allocation of private goods” within a given group of potential buyers.
Maskin, born 1950 in New York, is professor of social science at the Institute for Advanced Study at Princeton University while Myerson, born 1951 in Boston, is Glen A Lloyd Distinguished Service Professor at the University of Chicago.
The prize – formally called The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel – last year went to US economist Edmund S Phelps.
The prize is worth 10 million kronor ($1.53 million) and will be handed over at a ceremony on Dec 10 in Stockholm.