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The Prize in Economic Sciences 2007 |
KVA,10/15/2007 9:21:00 AM
The prize is awarded to Leonid Hurwicz, Eric Maskin, and Roger Myerson for having laid the foundations of mechanism design theory. It has among other things helped economists identify efficient trading mechanisms, regulation schemes and voting procedures.
Press release 15 October 2007 Svenska | English
The Prize in Economic Sciences 2007 The Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2007 jointly to
Leonid Hurwicz University of Minnesota, MN, USA, Eric S. Maskin Institute for Advanced Study, NJ, USA and Roger B. Myerson University of Chicago, IL, USA
“for having laid the foundations of mechanism design theory”.
The design of economic institutions Adam Smith’s classical metaphor of the invisible hand refers to how the market, under ideal conditions, ensures an efficient allocation of scarce resources. But in practice conditions are usually not ideal; for example, competition is not completely free, consumers are not perfectly informed and privately desirable production and consumption may generate social costs and benefits. Furthermore, many transactions do not take place in open markets but within firms, in bargaining between individuals or interest groups and under a host of other institutional arrangements. How well do different such institutions, or allocation mechanisms, perform? What is the optimal mechanism to reach a certain goal, such as social welfare or private profit? Is government regulation called for, and if so, how is it best designed?
These questions are difficult, particularly since information about individual preferences and available production technologies is usually dispersed among many actors who may use their private information to further their own interests. 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 such situations, accounting for individuals’ incentives and private information. 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. ________________________
Leonid Hurwicz, US citizen. Born 1917 in Moscow, Russia. Regents Professor Emeritus of Economics at University of Minnesota, Minneapolis, MN, USA. www.econ.umn.edu/faculty/hurwicz
Eric S. Maskin, US citizen. Born 1950 in New York City, NY, USA. Ph.D. in applied mathematics 1976 from Harvard University, Cambridge, MA, USA. Albert O. Hirschman Professor of Social Science, Institute for Advanced Study, Princeton, NJ, USA, since 2000. www.sss.ias.edu/community/maskin.php
Roger B. Myerson, US citizen. Born 1951 in Boston, MA, USA. Ph.D. in applied mathematics 1976, from Harvard University, Cambridge, MA, USA. Glen A. Lloyd Distinguished Service Professor at University of Chicago, IL, USA, since 2007. http://home.uchicago.edu/~rmyerson
The Prize amount: SEK 10 million, will be shared equally among the Laureates. Contact persons: Annika Moberg, Information Officer, Phone +46 86739522, +46 702637446, annika.moberg@kva.se Peter Englund, Science Editor, Phone +46 87369154
The Royal Swedish Academy of Sciences, founded in 1739, is an independent organisation whose overall objective is to promote the sciences and strengthen their influence in society. Traditionally, the Academy takes special responsibility for the natural sciences and mathematics.
Nobel Prize® and the Nobel Prize® medal design mark are registered trademarks of the Nobel Foundation.
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