Story highlights U.S. economists win prize for study of market design and matching theory

Their work is used in education and organ transplants, among other things

Economics was added as a category in 1969 by the Swedish central bank

Two American professors also shared the 2011 Nobel Prize for economics

Alvin E. Roth of Harvard University and Lloyd Shapley of UCLA have been awarded the Nobel Prize in economics for their work in market design and matching theory, the Royal Swedish Academy of Sciences announced Monday.

Roth and Shapley's work focuses on finding the most efficient way to match parties in a transaction, whether it be students to schools or organ donors to recipients, according to the academy.

Shapley used game theory to study matching models, and Roth built on them to make real-world changes to existing markets, including school choice and organ transplants, the academy said.

Elements of their work are built into software that guides kidney donations in the United States, as well as in school choice models in New York, Boston, New Orleans and other U.S. cities, Roth told reporters Monday.

Roth, who was awakened by an early morning call about their win, said he was not expecting the prize but was honored to share it with Shapley.

Photos: Photos: The Nobel Prize winners of 2012 Photos: Photos: The Nobel Prize winners of 2012 Economics, Lloyd Shapley – U.S. economist Lloyd Shapley smiles outside his home in Los Angeles after being notified that he won the 2012 Nobel Memorial Prize for Economics on Monday, October 15. He and Alvin Roth share the award for their work in market design and matching theory. Hide Caption 1 of 10 Photos: Photos: The Nobel Prize winners of 2012 Economics, Alvin Roth – Alvin Roth receives congratulatory phone calls at his home in Menlo Park, California, on Monday, October 15, after winning the Nobel Memorial Prize in Economics, which he shared with Lloyd Shapley. Roth was "surprised" and "delighted" when he got the midnight call at his California home telling him he had won. Hide Caption 2 of 10 Photos: Photos: The Nobel Prize winners of 2012 Peace, European Union – The Norwegian Nobel Committee in Oslo awarded the Nobel Peace Prize Friday to the European Union for peaceful reconciliation after World War II between former foes Germany and France, and for spreading democracy and human rights through Europe. Hide Caption 3 of 10 Photos: Photos: The Nobel Prize winners of 2012 Literature, Mo Yan – Chinese writer Mo Yan won the 2012 Nobel Prize for literature on Thursday, October 11, for works which combine "hallucinatory realism" with folk tales, history and contemporary life grounded in his native land. Picture taken October 19, 2005. Hide Caption 4 of 10 Photos: Photos: The Nobel Prize winners of 2012 Chemistry, Robert Lefkowitz – Robert Lefkowitz, center, enters a party held for him at Duke University after winning the Nobel Prize in chemistry on Wednesday. Lefkowitz shares the prize with his former student, Brian Kobilka. Hide Caption 5 of 10 Photos: Photos: The Nobel Prize winners of 2012 Chemistry, Brian Kobilka – Dr. Brian Kobilka, a professor of molecular and cellular physiology, stands in his laboratory at Stanford University. He shares the Nobel Prize in chemistry with Robert Lefkowitz of Duke University. Hide Caption 6 of 10 Photos: Photos: The Nobel Prize winners of 2012 Physics, Serge Haroche – Serge Haroche, a French physicist and professor at the College de France, shares the Nobel Prize in physics with David Wineland. Hide Caption 7 of 10 Photos: Photos: The Nobel Prize winners of 2012 Physics, David Wineland – David Wineland, winner of the 2012 Nobel Prize in physics, gives a tour Tuesday of the National Institute of Standards and Technology in Boulder, Colorado, where he works in the physics department. Hide Caption 8 of 10 Photos: Photos: The Nobel Prize winners of 2012 Medicine, Shinya Yamanaka – Kyoto University professor Shinya Yamanaka of Japan won the Nobel Prize in medicine for groundbreaking work on stem cells. He shares the prize with Sir John B. Gurdon of Britain. Hide Caption 9 of 10 Photos: Photos: The Nobel Prize winners of 2012 Biology, John Gurdon – Sir John Gurdon speaks Monday at a press conference after being awarded the Nobel Prize in medicine. Hide Caption 10 of 10

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"I'm sure when I go to the class this morning my students will pay more attention," he said.

The economics prize is the sixth and final of the annual awards that spotlight the world's top scholars and peacemakers.

The economics award was not among the original prizes created in 1895 by Swedish industrialist Alfred Nobel to honor work in physics, medicine, chemistry, literature and peace. It was added as a category in 1969 by the Swedish central bank in memory of the industrialist.

As such, the economics prize is given by the Royal Swedish Academy of Sciences , following the same principles used to determine the other Nobel Prize winners, according to the Nobel committee.

The monetary award that accompanies the Nobel Prize was lowered by the foundation this year by 20% from 10 million Swedish kronor ($1.5 million) to 8 million kronor ($1.2 million) because of the turbulence that hit the financial markets.

The economics selection follows last week's awarding of the Nobel Peace Prize to the European Union , a selection that surprised many and drew scorn from Italian and Greek demonstrators who took to the streets to protest austerity measures.

The 27-nation union was honored for its work in promoting democracy and reconciliation following World War II, even as it grapples with a financial crisis that threatens to break the EU apart.

While Callanan called the Nobel committee "out of touch," others applauded the selection.

Another surprise was the Nobel committee's selection of Chinese writer Mo Yan as the winner of the Nobel Prize for literature.

The Chinese author, whose pen name means "not talking," has captivated his countrymen by intertwining fantasy and gritty everyday life.

Mo, a Communist Party member, is considered a writer within the system and has embraced official party restrictions on writing. He also was elected by the Communist Party to a vice chairman spot in the state-sanctioned China Writers Association.

Unlike the news blackout in China two years ago when Chinese dissident Liu Xiabo won the Nobel Peace Prize, state-run media reported Mo's win immediately following the announcement.

Patrick Poon of the Independent Chinese Pen Center said the award by the Nobel committee appeared to be a recognition of -- or attempt to please -- the Chinese government.

This year's prize for economics was selected from among hundreds of nominations, the Nobel committee said.

Thomas Sargent, a professor at New York University, and Christopher Sims, a professor at Princeton University, carried out their research independently, though their work was considered complementary.

Sargent and Sims received their doctorates from Harvard in 1968.