The Nobel prize for economics has been awarded to a trio of American economists for their work on market design theory.

The Royal Swedish Academy of Sciences has decided to award The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2007 jointly to Leonid Hurwicz, University of Minnesota; Eric Maskin, Institute for Advanced Study, Princeton; and, Roger Myerson of the University of Chicago, “for having laid the foundations of mechanism design theory”. The 10 million Swedish kronas will be shared equally among the trio.

“Mechanism design theory, initiated by Leonid Hurwicz and further developed by Eric Maskin and Roger Myerson, has greatly enhanced our understanding of the properties of optimal allocation mechanisms in [imperfect markets], accounting for individuals’ incentives and private information,” it said.

“The theory allows us to distinguish situations in which markets work well from those in which they do not. It has helped economists identify efficient trading mechanisms, regulation schemes and voting procedures. Today, mechanism design theory plays a central role in many areas of economics and parts of political science,” the committee added.

Hurwicz, a U.S. citizen, was born in 1917 in Moscow, Russia. He is the Regents Professor Emeritus of Economics at University of Minnesota, Minneapolis.

www.econ.umn.edu/faculty/hurwicz

Maskin was born in 1950 in New York City. He has a Ph.D. in applied mathematics from Harvard University, and is the Albert O. Hirschman Professor of Social Science, Institute for Advanced Study, Princeton University since 2000.
www.sss.ias.edu/community/maskin.php

Myerson, born in 1951 in Boston, also earned a Ph.D. in applied mathematics from Harvard. He’s the Glen A. Lloyd Distinguished Service Professor at University of Chicago.