Three Americans won the Nobel Prize in Economics Monday. They developed something called "mechanism design theory," which helps explain the decision-making processes behind business moves.
Marketplace's John Dimsdale says the theory is a set of calculations used to create the ideal market for buyers and sellers.
In developing the theory, Leonid Hurwicz, Eric S. Maskin and Roger B. Myerson took the basic parts of game theory and applied those rules to the market, Dimsdale says. eBay, for example, uses mechanism design theory to conduct its online auctions.
Dimsdale talks to Alex Cohen about the announcement.
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