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What is Nobel Prize.

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Alfred Nobel, the inventor of dynamite, was sure his creation would help bring about the end of war. "When two armies of equal strength can annihilate each other in an instant," he once wrote, "then all civilized nations will retreat and disband their troops." Things didn't quite go according to plan. What has worked out, however, is the annual set of awards, established in 1901, that bear his name. They remain the most prestigious intellectual awards in the world.

A lifelong bachelor, Nobel lived a solitary life and spent most of his time tinkering with inventions, amassing 355 patents by the time he died in 1896. Following Nobel's death, his executors discovered that he had secretly created five annual prizes — for chemistry, physics, literature, medicine and peace — in his will to honor "the greatest benefit on mankind." It all came as quite a surprise. "It took five years to get the prizes started, because everyone had to figure it all out," says Hans Jornvall, secretary of the Nobel Committee at the Karolinska Institute in Sweden — the group that chooses the Nobel Prize in Medicine. Nobel initially donated 35 million Swedish kronor (about $225 million today); the prizes come from the fortune's annual interest.

Each award is decided by separate institutions which form assemblies to select the actual prize recipients. Some prizes (medicine) require Nobel assembly members to remain active in their fields, while others (literature) appoint members for life. The Peace Prize is actually decided by five members of the Norwegian parliament. Nobel Prize winners must be living; there are no posthumous awards. Each year, the Nobel committees distribute nomination forms to an undisclosed number of recipients — past winners, prominent institutions, respected members of the field — who are allowed to choose as many nominees as they want. Self-nomination is not permitted. The winner is decided by a simple majority vote.

The literature and peace prizes regularly inspire controversy. Jean-Paul Sartre rejected his 1964 prize in literature, though his family tried to claim the award money after his death. Pablo Neruda wanted a Nobel Prize so much that he reportedly wined and dined Swedish writers and academics at his seaside villa; he finally won one in 1971. Bob Dylan has been nominated six times, Jerry Lewis once. In 2004, the literature prize went to Austrian feminist Elfriede Jelinek, a move so controversial that one assembly member resigned in protest. Henry Kissinger and Le Duc Tho shared a 1973 Peace Prize for negotiating the end of the Vietnam War. Tho rejected his award, saying there was no peace in his country. Kissinger's acceptance caused an uproar: apparently the former National Security Adviser's role in a secret war against Cambodia and the overthrow of the Chilean government didn't sit well with some people.

Some Nobel Prizes have gone to discoveries that turned out to be wrong. The 1926 Nobel Prize in Medicine went to Johannes Fibiger for the discovery that roundworms cause cancer (they don't). A year later, psychiatrist Julius Wagner-Jauregg won for injecting patients with malaria to treat syphilitic dementia (not a good idea). Past laureates have espoused eugenics, opposed public school, joined the Nazi party and claimed that the Sept. 11 attacks were an inside job. But the majority of prizes have reflected sound discoveries (X-rays, quantum physics, penicillin) and respected leaders (Martin Luther King, Albert Einstein, Nelson Mandela). Much has been made of Obama's seemingly premature win and the committee's vague reasoning for awarding him the honor (they said he promoted "international diplomacy and cooperation between peoples"). Unfortunately, those seeking answers are out of luck: Nobel documents are sealed for 50 years.