The 2010 Nobel Memorial Prize in Economic Science was awarded on Monday to Peter A. Diamond, Dale T. Mortensen and Christopher A Pissarides for their work on markets where buyers and sellers have difficulty finding each other, in particular in labor markets.

For decades, the researchers have studied what happens when a market is not made up of identical, cookie-cutter units — as is true with the job market, where all workers have different skills and weakness. In many cases, there are significant search costs to finding the ideal match between a buyer and a seller of a good, like the job to a job-seeker.
Professor Diamond, 70, a professor at M.I.T., first developed a broad theoretical framework for studying markets with search costs in 1971. Professors Mortensen, 71, of Northwestern University, and Pissarides, 62, of the London School of Economics, later applied the idea to the labor market in particular, and how government policy could improve the matching of workers to jobs.
“The Laureates’ models help us understand the ways in which unemployment, job vacancies, and wages are affected by regulation and economic policy,” according to the citation from the prize committee.
The prize is awarded by the Bank of Sweden in memory of Alfred Nobel.
Last year, the prize was awarded to social scientists, Elinor Ostrom at Indiana University, and Oliver E. Williamson at the University of California, Berkeley, for their work in describing the numerous relationships within a company or among companies and individuals that shape market behavior. (Source: The New York Times)
Photo: A screen shot from the announcement in Stockholm on Monday shows the recipients of the Nobel in economic science: Peter A. Diamond, Dale T. Mortensen and Christopher A. Pissarides. (Photo: Janerik Henriksson/AFP