Indian-born New York University professor Srinivasa SR Varadhan won Norway's 6 million kroner (US$975,000, euro736,000) Abel Prize for mathematics for his fundamental contributions to probability theory.
Varadhan, 67, teaches at NYU's Courant Institute of Mathematical Sciences, and the award said his theories are useful in a broad range of fields, including quantum field theory, statistical physics, population dynamics, econometrics and finance, and traffic engineering.
"Varadhan's work has great conceptual strength and ageless beauty. His ideas have been hugely influential and will continue to stimulate further research for a long time," said the citation from the Norwegian Academy of Science and Letters.
The Abel Prize, first awarded in 2003, was created by the Norwegian government and named after 19th Century Norwegian mathematician Niels Henrik Abel.
The awards citation said, "Probability theory is the mathematical tool for analysing situations governed by chance.
... This subject has concrete applications to fields as diverse as physics, biology, economics, statistics, computer science, and engineering."
In a popularised presentation of Varadhan's work, University of Oslo professor Tom Louis Lindstroem said large deviations are those results that appear to defy normal odds.
For example, if a normal coin were tossed 1,000 times, about half the tosses would be expected to turn up as 'heads.'
"But this need not happen," he wrote. "There is a small - extremely small - probability that the coin will show 'heads' every time. ... The art of large deviations is to calculate the probability of such rare events."
Varadhans Large Deviation Principle sums up how to apply the techniques to the chances of an unlikely outcomes.
Varadhan was born in Madras, India, and after winning his doctorate in mathematics there in 1963, went to the Courant Institute in New York, where he remained.
The 2006 Abel Prize went to Lennart Carleson of Sweden.