Two American economists have won this year's Nobel Memorial Prize in Economics for their work in designing market institutions that match different parties within the market as efficiently as possible.

The Royal Swedish Academy of Sciences in Stockholm said Monday it awarded the prize to Alvin Roth, an economics professor at Harvard University, and Lloyd Shapley, a professor at the University of California, Los Angeles (UCLA).

The 89-year-old Shapley conducted early theoretical studies of matching methods in the 1950s and 1960s. He developed a formula of how 10 men and 10 women could be coupled so that no two of them would prefer each other over their current partners.

More recently, in the 1990s, the academy said the 60-year-old Roth used Shapley's research to redesign existing instructions for matching new doctors with hospitals, students with schools, and organ donors with patients.

It said the two Americans, who work independently of one another, will share the $1.2 million prize for an “outstanding example of economic engineering.”

The economics prize was not part of the original group of awards established in the will of Swedish industrialist Alfred Nobel, also known for inventing dynamite. The Swedish central bank created the annual prize in 1968 in Nobel's memory.

The 2012 Nobel Peace Prize and those in medicine, physics, chemistry and literature were announced last week. All awards will be handed out on December 10, the anniversary of Nobel's death in 1896.