Nobel Prize for Economics

Of course, we all know that there isn't really a Nobel prize for Economics - but there is an equivalent organised by the Swedish central bank which carries equal status to the original prizes.

This year's winners are: US economists Leonid Hurwicz, Eric Maskin and Roger Myerson.

They've won the prize for their work on economic mechanisms. These are markets, usually infrastructure, monopoly or oligopoly markets which are complex in nature and where it is difficult - often because of the capital investment required - for a market to function normally. Examples might include the railways, the energy market, the NHS, education, water and so on.

In many societies, these would traditionally be run by government, but increasingly governments have believed that social welfare can be maximised by introducing market elements into their operation.

The difficulty is identifying how these macro-markets work on a micro-scale and what level and type of regulation increases social welfare. This is where our three economists come in, applying mathematical models from game theory to the types of markets above which essentially concern competing interest groups at different levels of the organisation.