Americans Leonid Hurwicz, Eric Maskin and Roger Myerson won the Nobel Memorial Prize in Economic Sciences yesterday for developing a theory that helps explain situations in which markets work and others in which they don't.

Americans Leonid Hurwicz, Eric Maskin and Roger Myerson won the Nobel Memorial Prize in Economic Sciences yesterday for developing a theory that helps explain situations in which markets work and others in which they don't.

The research helps explain decision-making processes involved in economic transactions determining, for example, what insurance polices will provide the best coverage without inviting misuse.

It also has applications in job markets and voting procedures, according to academic literature.

By accounting for individuals' incentives and private information, their theory lets economists, governments and businesses "distinguish situations in which markets work well from those in which they do not", the Royal Swedish Academy of Sciences said in its citation. - AP