Lloyd Shapley and Alvin Roth of America won Nobel Prize in Economics

Alvin Roth and Lloyd Shapley of America were awarded the Nobel economics prize on 15 October 2012 for their work in market design and matching theory.

The research work helps in explaining the market processes at work, say, when doctors are assigned to hospitals, students to schools and human organs for transplant to recipients.

The award was cited to the economist by The Royal Swedish Academy of Sciences for the theory of stable allocations and the practice of market design. The Royal Swedish Academy of Sciences, which awards the 8 million crown ($1.2 million) prize, called their work an outstanding example of economic engineering.

The two economists were working independently on the same research project. Lloyd Shapley used game theory to study matching models, and Alvin Roth built on them to make real-world changes to existing markets, including school choice and organ transplants,

Alvin Roth is a professor at Harvard and Lloyd Shapley teaches at the University of California in Los Angeles

The Nobel Memorial Prize in Economic Sciences was the last of the 2012 Nobel awards to be announced.

The economics award is not among the original prizes created in 1895 by Swedish industrialist Alfred Nobel to honor work in physics, medicine, chemistry, literature and peace. It was added as a category in 1969 by the Swedish central bank in memory of the industrialist.