Home>News Center>World
         
 

Israeli, American win Nobel for economics
(AP)
Updated: 2005-10-10 20:36

Israeli and U.S. citizen Robert J. Aumann and American Thomas C. Schelling won the 2005 Nobel Memorial Prize in Economic Sciences on Monday for their work on game theories that help explain economic conflicts, including trade and price wars.

"Why do some groups of individuals, organizations and countries succeed in promoting cooperation while others suffer from conflict?" the Royal Swedish Academy of Sciences said in announcing the award.

Schelling, 75, is a professor at the University of Maryland's department of economics and a professor emeritus at Harvard. Aumann, 84, is a professor at the Center for Rationality at the Hebrew University of Jerusalem.

It was the sixth straight year that Americans have won the prize, or had a share in it.

Aumann and Schelling were cited for using game-theory analysis to "explain economic conflicts such as price wars and trade wars, as well as why some communities are more successful than others in managing common-pool resources."

"The repeated-games approach clarifies the raison d'etre of many institutions, ranging from merchant guilds and organized crime to wage negotiations and international trade agreements," the citation said.

Schelling "showed that a party can strengthen its position by overtly worsening its own options, that the capability to retaliate can be more useful than the ability to resist an attack, and that uncertain retaliation is more credible and more efficient than certain retaliation," the academy said. "These insights have proven to be of great relevance for conflict resolution and efforts to avoid war."

Aumann was cited for his work in looking at how real-world situations can affect the theory.

"In many real-world situations, cooperation may be easier to sustain in a long-term relationship than in a single encounter. Analyses of short-run games are, thus, often too restrictive," the academy said. "Robert Aumann was the first to conduct a full-fledged formal analysis of so-called infinitely repeated games. His research identified exactly what outcomes can be upheld over time in long-run relations."

Reached by telephone in Israel, Aumann told the Associated Press: "I feel great."

He said he would not say anything more until a news conference later in the day.

Aumann was born in Frankfurt, Germany, but holds U.S. and Israeli citizenship. He is not the first Israeli to win the economics prize. In 2002, Daniel Kahneman, who also has U.S. and Israeli citizenship, shared the award.

Last year's winners were Edward C. Prescott, an Arizona State University professor, and Norwegian Finn E. Kydland, an economics professor at the University of California, Santa Barbara, who won for their research on how government policies affect economies around the world and why supply-side shocks like high oil prices can dampen business cycles.

The economics prize, worth 10 million kronor ($1.3 million), is the only one of the Nobel awards not established in the will of Swedish industrialist Alfred Nobel, the inventor of dynamite. The medicine, physics, chemistry, literature and peace prizes were first awarded in 1901, while the economics prize was set up separately by the Swedish central bank in 1968.



USS Park Royal crew await for Rice
Coffin of Milosevic flew to Belgrade
Kidnapping spree in Gaza Strip
 
  Today's Top News     Top World News
 

Australia, US, Japan praise China for Asia engagement

 

   
 

Banker: China doing its best on flexible yuan

 

   
 

Hopes high for oil pipeline deal

 

   
 

Possibilities of bird flu outbreaks reduced

 

   
 

Milosevic buried after emotional farewell

 

   
 

China considers trade contracts in India

 

   
  Journalist's alleged killers held in Iraq
   
  No poisons found in Milosevic's body
   
  US, Britain, France upbeat on Iran agreement
   
  Fatah officials call for Abbas to resign
   
  Sectarian violence increases in Iraq
   
  US support for troops in Iraq hits new low
   
 
  Go to Another Section  
 
 
  Story Tools  
   
Manufacturers, Exporters, Wholesalers - Global trade starts here.
Advertisement