The Royal Swedish Academy of Sciences announced the Nobel Prize for Economics to American economists, Alvin Roth, a Harvard University professor, and Lloyd Shapley of the University of California Los Angeles, "for the theory of stable allocations and the practice of market design."
The Nobel Prize in Economics carries a whopping $1.2 million. The award is given in the memory of Alfred Nobel, a Swedish Citizen who invented dynamite.
Shapley and Roth have worked separately and are not involved in each other's research.
The academy appreciated Shapley's and Roth's research and said their work "has generated a flourishing field of research and improved the performance of many markets."
Shapley's sons, Peter and Christopher Shapley, said in a statement, "We know he is tremendously thankful that his life's work is being recognized with such a prestigious award and grateful for the many congratulations expressed by colleagues and friends."
Their research gave a better perspective to the way people are matched with limited resources such as, patients with donated organs or students with the high schools they like.
"Now we are able to see the fruits of this 50-year quest, if you wish, and these techniques-initially very much mathematical-are now directly affecting peoples' lives," said Tayfun Sonmez, a Boston College economist.
"We can use some of these insights to optimally organize these exchanges so that we can save as many lives as possible," he added.
Shapley is also recognized for a research, conducted during the 1960s with late David Gale, which spoke about the ways to make a good match for marriage. According to the research, a successful marriage is possible when preferences of both the sides are met.
This study was later used by Roth to examine his research.