Stockholm, Oct 09: Two Americans won the 2002 Nobel Memorial Prize in economic sciences today for pioneering the use of psychological and experimental economics in decision-making. Daniel Kahneman, 68, a US and Israeli citizen based at Princeton University and Vernon L Smith, 75, of George Mason University in the United States will share the 10 million Kronor (1 million dollars) prize.
"Kahneman has integrated insights from psychology into economics, especially concerning human judgment and decision-making under uncertainty," the Royal Swedish Academy of Sciences said in its citation.
Smith laid the foundation for the field of experimental economics, demonstrating the importance of alternative institutions.
The academy singled out Smith's use of "wind-tunnel tests," where trials of new, alternative market designs are carried out in the laboratory before being implemented. That could be useful, for example, in deciding on deregulating electricity markets and the privatization of public monopolies, the citation said.

Last year, three Americans won the prize for advances in ways to analyze markets that can be applied to both developing and advanced economies.
George A. Akerlof of the University of California at Berkeley, A. Michael Spence of Stanford University and Joseph E. Stiglitz of Columbia University were cited "for their analyses of markets with asymmetric information," referring to the fact that some market players have better information than others. Bureau Report