October 9, 2009 12:03 PM
- Text
Three Americans Win Nobel Economics Prize
(CBS/AP)
Americans Leonid Hurwicz, Eric S. Maskin and Roger B. Myerson won the Nobel Memorial Prize in Economic Sciences on Monday for developing a theory that helps explain situations in which markets work and others in which they don't.
The three researchers "laid the foundations of mechanism design theory," which plays a central role in contemporary economics and political science, the Royal Swedish Academy of Sciences said.
The research helps explain decision-making processes involved in economic transactions determining, for example, what insurance polices will provide the best coverage without inviting misuse, the academy said. It also has applications in job markets and voting procedures, according to academic literature.
"Mechanism design theory, initiated by Leonid Hurwicz and further developed by Eric Maskin and Roger Myerson, has greatly enhanced our understanding of optimal allocation mechanisms," the academy said.
By accounting for individuals' incentives and private information, their theory lets economists, governments and businesses "distinguish situations in which markets work well from those in which they do not," the academy said in its citation.
"My ability to work with people in my field to try to understand the economy better and to understand the problems that face our society, I hope that will be enhanced by this," Myerson told CBS Radio News.
Myerson, 56, has been at University of Chicago since 2001. He previously worked at Northwestern's Kellogg School of Management.
"There were a lot of us working in this area in the late 1970s," he told The Associated Press, describing his work as investigating "How does information get used in society to allocate resources?"
He added, "I really didn't expect it. There were times when other people said I was on the short list but as time passed and nothing happened I didn't expect the recognition would come because people who were familiar with my work were slowly dying off."
Hurwicz, 90, who was born in Moscow, is an emeritus professor of economics at the University of Minnesota in Minneapolis. Maskin, 56, is professor at the Institute for Advanced Study at Princeton, N.J.
The economics award is not one of the original Nobel Prizes. It was created in 1968 by the Swedish central bank in Nobel's memory.
Last year American Edmund S. Phelps won the prize for explaining the relationship between inflation and unemployment, work that has had a profound impact on macroeconomic policy.
Nobel Prize winners receive $1.5 million, a gold medal and diploma from the Swedish king on Dec. 10, the anniversary of Nobel's death in 1896.
The other prizes were announced last week, with the Nobel Prize in medicine going to Americans Mario R. Capecchi and Oliver Smithies, and Briton Sir Martin J. Evans, for groundbreaking discoveries that led to a powerful technique for manipulating mouse genes.
France's Albert Fert and German Peter Gruenberg won the physics award for discovering a phenomenon that enables computers and digital music players to store reams of data on ever-shrinking hard disks.
Gerhard Ertl of Germany won the chemistry prize for studies of chemical reactions on solid surfaces, which are key to understanding such questions as why the ozone layer is thinning.
Britain's Doris Lessing won the literature prize, and former U.S. Vice President Al Gore and the U.N.'s Intergovernmental Panel on Climate Change won the 2007 Nobel Peace Prize on Friday for their efforts to spread awareness of man-made climate change.
The three researchers "laid the foundations of mechanism design theory," which plays a central role in contemporary economics and political science, the Royal Swedish Academy of Sciences said.
The research helps explain decision-making processes involved in economic transactions determining, for example, what insurance polices will provide the best coverage without inviting misuse, the academy said. It also has applications in job markets and voting procedures, according to academic literature.
"Mechanism design theory, initiated by Leonid Hurwicz and further developed by Eric Maskin and Roger Myerson, has greatly enhanced our understanding of optimal allocation mechanisms," the academy said.
By accounting for individuals' incentives and private information, their theory lets economists, governments and businesses "distinguish situations in which markets work well from those in which they do not," the academy said in its citation.
"My ability to work with people in my field to try to understand the economy better and to understand the problems that face our society, I hope that will be enhanced by this," Myerson told CBS Radio News.
Myerson, 56, has been at University of Chicago since 2001. He previously worked at Northwestern's Kellogg School of Management.
"There were a lot of us working in this area in the late 1970s," he told The Associated Press, describing his work as investigating "How does information get used in society to allocate resources?"
He added, "I really didn't expect it. There were times when other people said I was on the short list but as time passed and nothing happened I didn't expect the recognition would come because people who were familiar with my work were slowly dying off."
"It is a huge honor, I'm just overwhelmed to have my name on that list," he told Sweden's TV4 network.
Hurwicz, 90, who was born in Moscow, is an emeritus professor of economics at the University of Minnesota in Minneapolis. Maskin, 56, is professor at the Institute for Advanced Study at Princeton, N.J.
The economics award is not one of the original Nobel Prizes. It was created in 1968 by the Swedish central bank in Nobel's memory.
Last year American Edmund S. Phelps won the prize for explaining the relationship between inflation and unemployment, work that has had a profound impact on macroeconomic policy.
Nobel Prize winners receive $1.5 million, a gold medal and diploma from the Swedish king on Dec. 10, the anniversary of Nobel's death in 1896.
The other prizes were announced last week, with the Nobel Prize in medicine going to Americans Mario R. Capecchi and Oliver Smithies, and Briton Sir Martin J. Evans, for groundbreaking discoveries that led to a powerful technique for manipulating mouse genes.
France's Albert Fert and German Peter Gruenberg won the physics award for discovering a phenomenon that enables computers and digital music players to store reams of data on ever-shrinking hard disks.
Gerhard Ertl of Germany won the chemistry prize for studies of chemical reactions on solid surfaces, which are key to understanding such questions as why the ozone layer is thinning.
Britain's Doris Lessing won the literature prize, and former U.S. Vice President Al Gore and the U.N.'s Intergovernmental Panel on Climate Change won the 2007 Nobel Peace Prize on Friday for their efforts to spread awareness of man-made climate change.
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