The Nobel Memorial Prize in Economic Sciences, commonly called the Nobel Prize in Economics, was not originally included in Alfred Nobel´s will. Sveriges Riksbank established the award in memory of Nobel in 1968. We go now to our correspondents in Stockholm for news of this year's winners.
The last of this year's Nobel Prize winners was announced on Monday.
The 2010 Nobel Prize in Economic Sciences went to two Americans, Peter A Diamond and Dale T Mortensen, and to English Cypriot Christopher A. Pissarides, for their "... analysis of markets with search frictions."
Search frictions refer to the time and effort that buyers and sellers spend to locate each other in the market place. For example, in the labor market, workers are trying to find suitable jobs for themselves and employers are trying to find suitable workers. The process of matching the two together is referred to as "search frictions."
[Professor Lars Calmfors, Academy of Sciences, Stockholm University]:
"They have made research from the early 1970s and onwards on how to explain behavior in markets were there are problems for buyers and sellers to contact each other to get good matches. And the main use for it has been in the labor market were we are having simultaneously vacancies and unemployed persons."
Peter A. Diamond, Professor of Economics at the Massachusetts Institute of Technology (MIT), Cambridge, Massachusetts, USA, has mainly been focusing on how the search market works.
Dale T. Mortensen, Professor of Economics at Northwestern University, Evanston, Illinois, USA, and British Cypriot C. A. Pissarides , Professor of Economics at the London School of Economics and Political Science, UK, have focused on the theory of the labor market.
They have developed the Diamond-Mortensen-Pissarides model, the DMP-model, on the labour market.
The theory is commonly-used today as a model to describe the effects of economic policies in the labor sector and also in real estate and monetary economics.