Israeli and U.S. citizen Robert J. Aumann and American Thomas C. Schelling have won the 2005 Nobel Memorial Prize in Economic Sciences.
The pair won the prize “for having enhanced our understanding of conflict and cooperation through game-theory analysis,” the Royal Swedish Academy of Sciences said Monday.
Through their work, Aumann, 75, and Schelling, 84, have helped to “explain economic conflicts such as price wars and trade wars, as well as why some communities are more successful than others in managing common-pool resources,” the academy said in its citation.
“The repeated-games approach clarifies the raison d’etre of many institutions, ranging from merchant guilds and organized crime to wage negotiations and international trade agreements.”
Aumann, who was born in Frankfurt, Germany, and holds U.S. and Israeli citizenship, is a professor at the Center for Rationality at the Hebrew University of Jerusalem.
Schelling is a professor at the University of Maryland’s department of economics and a professor emeritus at Harvard.