Game theorists share Nobel prize

This year's Nobel Prize for economics has been awarded to Robert Aumann and Thomas Schelling for their work on "game theory", which can help resolve trade and labour conflicts.

The winners, who did not collaborate, were pioneers in a field that has revolutionised economics.

The Royal Swedish Academy of Sciences awarded the 10 million kronor ((pounds sterling)700,000) prize to the men for their work in the 1960s and 1970s, which has found uses in "disarmament policies, price formation on markets ... and political negotiations".

Game theory has become the dominant approach to understanding conflict and co-operation between individuals, organisations and countries.

The study of strategic decision making, it develops general mathematical formulae and algorithms to determine what actions different players - trading partners, employers, unions, or even organised crime groups - should take to secure the best outcome.

Game theory has won the Nobel Prize before - in 1994 the economics prize was awarded to John Nash - and two others.

Mr Schelling, 84, an emeritus professor at the University of Maryland, wrote the 1960 book The Strategy of Conflict, in which he described game theory as a unifying framework for the social sciences.

Applying game theory to global security and the Cold War arms race, he introduced concepts such the benefits of limiting one's own options into strategic thinking.

Mr Aumann,75, an Israeli-American economist at the Hebrew University of Jerusalem, started the analysis of "infinitely repeated games", which showed that even where parties have conflicts of interest, they tend towards peaceful co-operation when they deal with each other over long periods of time.

- INDEPENDENT