16 Oct 2012

US economists win Nobel for market-matching theories

6:57 am on 16 October 2012

The Nobel economics prize has been awarded to Americans Alvin Roth and Lloyd Shapley.

The Royal Swedish Academy of Sciences said the prize was given for their work on the theory of stable allocations and the practice of market design.

The work is concerned with the best possible way to allocate resources, such as in school admissions or organs to patients who need transplants, the BBC reports.

Mr Roth, a professor at Harvard, and Mr Shapley, who teaches at the University of California in Los Angeles, worked independently of each other.

The Academy said the combination of Mr Shapley's basic theory and Mr Roth's empirical investigations experiments and practical design has "generated a flourishing field of research and improved the performance of many markets."

The committee said their work was a form of economic engineering, designing markets for situations where traditional market mechanisms based on price are not applicable or do not work well.