Leonid Hurwicz, Eric S. Maskin and Roger B. Myerson, all from the U.S., won the Nobel Prize in economics for theories that help set rules for transactions ranging from auctions to elections.

The three will share the 10 million kronor ($1.56 million) prize for “having laid the foundations of mechanism design theory,” the Royal Swedish Academy of Sciences said today.

Mechanism design theory has been used in labor negotiations, taxation and in designing systems for auctioning such things as government bonds.

“The theory allows us to distinguish situations in which markets work well from those in which they do not,” the Royal academy said in Stockholm today. “It has helped economists identify efficient trading mechanisms, regulation schemes and voting procedures.”