2005 Nobel Prize in Economic Sciences

The 2005 Nobel Prize in Economic Sciences has been awarded to Robert J. Aumann and Thomas C. Schelling. The prize was announced by the Royal Swedish Academy of Sciences in Stockholm on 10 October 2005.

The citation

The citation reads: "for having enhanced our understanding of conflict and cooperation through game-theory analysis". They share the prize equally.

The laureates

Robert J. Aumann was born in 1930 in Frankfurt-on-the-Main, Germany, and is affiliated with the University of Jerusalem, Center for RationalityHebrew, Jerusalem. Thomas C. Schelling was born in 1921 in Oakland, the United States, and is affiliated with the University of Maryland, Department of Economics and School of Public Policy, College Park.

Why it matters

Using game theory, the two economists explained why some groups manage to cooperate while others fall into conflict. Schelling's work on deterrence influenced thinking on nuclear strategy during the Cold War.

The prize

The prize is worth 10 million Swedish kronor, divided between the laureates. It will be presented at a ceremony in Stockholm on 10 December, the anniversary of the death of Alfred Nobel, the Swedish inventor of dynamite whose will founded the prizes in 1895. Strictly, this award is the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. It was established by the Swedish central bank in 1968, but is presented alongside the Nobel Prizes.