economicsThe Nobel Memorial Prize in Economic Sciences (Nobel Prize in Economics) has the official name as the Sveriges Riksbank Prize in Economic Sciences, in the memory of Alfred Nobel.
This year the Sveriges Riksbank Prize in Economic Sciences was awarded to "for her analysis of economic governance, especially the commons" "for his analysis of economic governance, especially the boundaries of the firm".
Economists have used game theory to analyze a wide array of economic phenomena, including auctions, bargaining, duopolies and oligopolies, social network formation, and voting systems. This research usually focuses on particular sets of strategies known as equilibria in games. These "solution concepts" are usually based on what is required by norms of rationality. The most famous of these is the Nash equilibrium. A set of strategies is a Nash equilibrium if each represents a best response to the other strategies. So, if all the players are playing the strategies in a Nash equilibrium, they have no incentive to deviate, since their strategy is the best they can do given what others are doing.
The payoffs of the game are generally taken to represent the utility of individual players. Often in modeling situations the payoffs represent money, which presumably corresponds to an individual's utility. This assumption, however, can be faulty.
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 2008 awarded Paul Krugman "for his analysis of trade patterns and location of economic activity".
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