Warmest congratulations to Leonid Hurwicz (emeritus, University of Minnesota), Eric Maskin (Princeton’s IAS) and Roger Myerson (University of Chicago) on winning this year’s Nobel Memorial Prize in Economics. Story here.

Building on ideas originally proposed by Hurwicz, the prizewinning work relates to imperfections in information flow in free markets.

Orthodox neoclassical economics holds that perfectly-free markets automatically and rapidly discount all available information. Not only is this clearly not true in practice, but there have also been several recent theoretical challenges to this view as well.

Among the key insights of “mechanism-design theory” is that participants in markets, elections, and negotiations have different incentives, and thus will tend to constrain the dissemination of information in ways that lead to suboptimal outcomes.

The United States continues its dominance of the Economics Nobel, with about two-thirds of all Economics Nobelists since Sweden’s central bank first began awarding the prize in 1969.