Nobel in Economics Given For "Mechanism Design Theory"

As AP reports:

Americans Leonid Hurwicz, Eric S. Maskin and Roger B. Myerson won the Nobel prize in economics on Monday for developing a theory that helps explain situations in which markets work and others in which they don't.

The three researchers "laid the foundations of mechanism design theory," which plays a central role in contemporary economics and political science,

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Essentially, the three men, starting in 1960 with Hurwicz, studied how game theory can help determine the best, most efficient method for allocating resources given the available information, including the incentives of those involved.

Tyler Cowen, author of Discover Your Inner Economist and reason contributor, wonders if this was a great choice. Some in his comments thread think it was a better idea than Cowen did.

UPDATE: And Peter Boettke at the Austrian economists' blog sees some Hayekian background in Hurwicz's work:

Mechanism design theory ---- which seeks to find rules of the game so that the institutional structure operating under those rules will produce social optimum ---- was a by-product of Hayek's informational and incentive challenge to socialism and market socialism in the 1930s and 1940s.  Mathematical economists who took Hayek's challenge seriously set off on the path to provide the appropriate mechanism design that would meet Hayek's challenge.

Read his whole post for elaboration.