Champagne corks popped at New York University’s Courant Institute of Mathematical Sciences yesterday as one of its professors, Srinivasa Varadhan, won the Abel Prize, considered the Nobel of mathematics.

It is awarded by the Norwegian Academy of Science and Letters.

“I was shocked,” Mr. Varadhan, who won the $850,000 prize, said. His work has become a cornerstone for a great deal of modern probability theory.

He has made key contributions to the theory of large deviations, which explores the precise ways of calculating probabilities of very unlikely conjunctions of events, such as a long string of winning hands at blackjack. His research has implications for quantum theory, statistical physics, population dynamics, econometrics, and traffic engineering, and the way in which the large-scale structure of the universe emerges from the sea of chance small events.

“He has to be considered the leading figure in probability in the second half of the 20th century,” a professor at the Massachusetts Institute of Technology, Daniel Stroock, said. His work has involved so-called ruin problems, such as what reserves an insurance company should keep if it encounters a terrible year.

“There are a lot of events with small probability,” Mr. Varadhan said. “Sooner or later, one of them will occur. You want to know which one of them will occur first.”

In a telephone interview, Mr. Stroock gave the example of an asteroid hitting the Earth and wiping out the planet. He said the chances are very small, but the consequences are so calamitous that one is interested in knowing its probability.

A professor at SUNY New Paltz, Krishnamurthi Ravishankar, stressed Mr. Varadhan’s generosity, as did a mathematician at New York University, Gerard Ben Arous, who said Mr. Varadhan is so full of ideas that he can share his knowledge with those who know less.

On this topic, his colleagues roared when the director of the Courant Institute, Leslie Greengard, told the following anecdote: Mr. Stroock recalled a friend once saying that working with the theory of large deviations consisted of two steps. “The first step requires you to prove either the upper or lower bound yourself. The second step requires you to get on the telephone and ask Varadhan how to prove the other bound.”

A professor of mathematics at NYU, Sylvain Cappell, quipped that members of the Courant Institute winning the Abel Prize for the second time in three years is an example of the large deviation in probability for which Mr. Varadhan is getting the award.

Born in India, Mr. Varadhan came to NYU in 1963 as a post-doctoral fellow. His son, Gopal, was killed in the terror attacks of September 11, 2001.