American trio wins 2007 Nobel for economics

The Royal Swedish Academy of Sciences said the three established "mechanism design theory", which looks at how well different institutions fare in allocating resources and whether government intervention is needed.

Hurwicz initiated the theory and it was further developed by Maskin of Princeton and Myerson of the University of Chicago, the academy's citation said.

"Today, mechanism design theory plays a central role in many areas of economics and parts of political science," it said.