Award granted to oldest Nobel winner in history

A 90-year-old became the oldest Nobel prize winner today for his work on economic theory.

Leonid Hurwicz, shares the prize with Eric Maskin and Roger Myerson for developing an explanation why some markets work and others do not.

"I really didn't expect it," said the Moscow-born researcher, an economics professor at the University of Minnesota in Minneapolis.

The three winners of the economics prize "laid the foundations of mechanism design theory," which plays a central role in contemporary economics and political science, the Royal Swedish Academy of Sciences said.

The theory helps explain how incentives and private information affect the functioning of markets, for example, what insurance polices will provide the best coverage without inviting misuse. It also helps explain how sellers and buyers can maximise their gain from a transaction.

Mechanism design theory was initiated in 1960 by Hurwicz and further developed by Maskin and Myerson in the 1970s.

Essentially, the three men studied how game theory could help determine the best, most efficient method for allocating resources given the available information, including the incentives of those involved.

Hurwicz said Monday he was surprised to have won the award.

"There were times when other people said I was on the short list, but as time passed and nothing happened I didn't expect the recognition would come because people who were familiar with my work were slowly dying off," he said.