Robert J Aumann, an Israeli-US citizen, and American Thomas C Schelling today won the 2005 Nobel Economics Prize for explaining conflict and co-operation by means of game theory, the Nobel jury said.
'Their work has transformed the social sciences far beyond the boundaries of economics,' the jury said. Their research 'continues to shape the debate on the formation of social institutions,' it added.
Their studies have found uses in 'security and disarmament policies, price formation on markets, as well as economic and political negotiations', the Royal Swedish Academy of Sciences said.
During the Cold War, Schelling used game theory methods to explain the era's most vital issues, global security and the arms race. Building on Schelling's original ideas, Aumann then applied the tools of mathematical analysis to highlight the alternatives available to one's own country and the opponent in times of conflict. They will share the prize sum of 10 million kronor (€1.1m).
The Nobel Economics Prize, the fifth of the six coveted prizes to be awarded this year, is the only one not originally included in the last will and testament of the creator of the awards, Swedish inventor Alfred Nobel. It was created by the Swedish Central Bank in commemoration of its tricentenary in 1968, and was first awarded in 1969. It is also funded by the bank.
