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3 U.S. Economists Share Nobel For Market Theory

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The Associated Press

Published: October 16, 2007

NEW YORK - Three U.S. economists, one of them a 90-year-old professor emeritus from Minnesota, will share this year's Nobel prize in economics for their work on how people's knowledge and self-interest affect their behavior in the market or in social situations such as voting and labor negotiations.

Leonid Hurwicz, who lives in south Minneapolis, is the oldest winner ever of the Nobel, the Royal Swedish Academy of Sciences said in their announcement on Monday.

His work - along with that of Eric S. Maskin and Roger B. Myerson, who both are 56 - led to a theory that plays a wide-ranging role in contemporary economics and political science, touching on areas as diverse as labor contract negotiations, auctions of government bonds, voting procedures and the structuring of insurance policies.

In its citation, the academy said their work on 'mechanism design theory' has made it possible to 'distinguish situations in which markets work well from those in which they do not.' This, it added, helped economists identify efficient trading mechanisms, regulatory schemes and voting procedures.

They will share a $1.5 million prize, to be awarded in December.

Hurwicz, who is an emeritus economics professor at the University of Minnesota in Minneapolis, started work on this area in 1960.

Maskin is a professor at the Institute for Advanced Study at Princeton, N.J., and Myerson is a professor at the University of Chicago. Maskin and Myerson both finished their Ph.Ds at Harvard University in 1976.

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