Peter Diamond, an MIT Professor, Shares Nobel Prize

Massachusetts Institute of Technology professor Peter Diamond prepares to address the media after winning the 2010 Nobel Prize in Economic Sciences on Oct. 11, 2010 in Cambridge, Massachusetts. Darren McCollester/Getty Images

Peter Diamond, Dale T. Mortensen and Christopher A. Pissarides won the 2010 Nobel Prize in economics, the Royal Swedish Academy of Sciences announced Monday.

Diamond, a New York native, teaches economics at the Massachusetts Institute of Technology, and has been nominated to serve on the Federal Reserve, but has not yet been confirmed by the Senate.

The three economists won “for their analysis of markets with search frictions,” according to the Academy.

Search theory is about the costs or consequences of the time and effort buyers and sellers must expend to find what they want. For example, some employers are advertising jobs, and some workers are seeking jobs, yet both their needs may not be met. Unemployment and job vacancies can and do coexist.

The announcement noted that “the Laureates’ models help us understand the ways in which unemployment, job vacancies, and wages are affected by regulation and economic policy.”

Mortensen, also an American, teaches economics at Northwestern University in Evanston, Illinois.

Pissarides is a dual citizen of Great Britain and the island of Cyprus. He teaches economics at the London School of Economics and Political Science.

The three honorees will share the prize money of 10 million Swedish kroners (USD $1,425,843).