Noble Prize for economics goes to Leonid Hurwicz, Eric Maskin and Roger Myerson

Oct 16: The Nobel Prize is an honor unique in the world in having found its way into the hearts and minds of simple people everywhere. It casts a light of peace and reason upon us all; and for that I am especially grateful, George Wald who won Noble Prize for medicine in the year 1967.

With the announcement of Noble Prize for Physics, 2007 Nobel Prize spell has come to an end. This year the Royal Swedish academy decided to award The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2007 to Leo Hurwicz from the University of Minnesota, Eric Maskin the Albert O. Hirschman Professor in the School of Social Science at the Institute for Advanced Study, and Roger Myerson of the University of Chicago.

Since 2000, Americans are continuously enjoying winning this prestigious prize.

They won the prize for their work in Mechanism Design Theory, which studies the efficiency of the marketplace by looking at factors such as the quality of information made available to market participants.

The Mechanism Design Theory deals with mechanisms that are best suited to minimize the economic losses. It emphasises on maximising the trade gains. This mechanism can be used from decision making to implement desirable joint project to choosing insurance schemes providing best coverage.

Mechanism design theory, initiated by Leonid Hurwicz and refined and applied by Eric Maskin and Roger Myerson, provides tools for analyzing the market forces.

Unlike chemistry, medicine, literature, and peace prizes, a prize for economics was never requested by Alfred Nobel in his will. The award was established some 70 years after his death by the Bank of Sweden on its 300th anniversary in 1968. The prize is awarded by the Royal Swedish Academy of Sciences in accordance with the same principles as those for the five Nobel Prizes.