Nobel Prizes: Al Roth and Lloyd Shapley

Great choices. Al Roth for matching and the design of new types of markets. Lloyd Shapley for fundamental contributions to game theory and mathematical economics including the Gale-Shapley algorithm which is a cornerstone of the matching methods Al Roth pioneered. I am especially pleased about this because of Roth’s great work on improving kidney allocation. Here is Roth’s blog, Market Design and here he is giving a talk at Google. Here is what I wrote in 2010 about Roth

Roth has applied heavy-duty theory to the very practical problems of matching doctors to residency programs, children to schools, economists to departments and kidneys to patients in a way that is stable, incentive-compatible, and maximizes the gains from exchange.  In my view, Roth is the most influential economist working today. Influential among other economists?  Yes.  But what I really mean is influential in the world.

Previous posts on MR about Roth (also here). Roth’s papers.

More soon.

Comments

And in real Nobel prize news, via metafilter -

'The 2012 Nobel Prize in Physics has been awarded to Serge Haroche (France) and David Wineland (US) for discovering ways to measure and manipulate quantum particles, a discovery which many are suggesting may soon allow us to build computers with virtually limitless capabilities.'

An algorithm has won. I have nothing against algorithms. But now that the problem of cronyism and rent seeking has moved so high on the agenda of political discourse in the foremost capitalist country, and in the light of algorithmic market design debacles that contributed to the financial crisis, wouldn't Anne Krueger have been a more inspirational winner to restore the world's confidence in economics? The Nobel commendation stressed "economic engineering" and "market design". Time for the computational to take the back seat to thinking? Ok, let's try. It used to be said that socialist central planning would work if only the computers were more advanced. Hayek said "no". And the computer said "no".

Huh, I hadn't realized the stable marriage problem had been invented by an economist - they teach it early on in CS curricula.

Routh & Sotomayor is still the standard graduate text for this area 20 years later. Interested readers can find the first 20 pages on Amazon here: http://www.amazon.com/gp/reader/0521437881/ref=sib_dp_pt#reader-link

Strong like. Anyone interested in reading some of the most exciting social science they'll ever read should read this book. I read it three times -- the first two times I couldn't understand it, and then on the third I realized I had to work through each proof. And when I did, it was love at first sight. (or third sight). It's a wonderful piece of social science. But one thing it is, and this describes a lot of Roth's work too, that it's so well communicated. For being deeply mathematical, that's quite an achievement, and it's probably why I thought the first two times I read it that I could get away without having to do the hard work of understanding every theorem. But if you do work through the proofs, it's very rewarding.

I'm not surprised whatsoever that the book is still a textbook after twenty years. Look at any game theory textbook some time -- you can't really find anything in game theory that teaches the two sided matching material. It's sometimes in the treatment on the core and cooperative bargaining, but it's more like someone is trying to shoehorn this work into their textbook, and a lot is lost if not unrecognizable.

I think it is probably time to update the Roth and Sotomayor book, though. A lot has been done in this area in the last twenty years. Roth's unbelievably prolific and productive.

I wonder what the circumstances were of Harvard losing him and his group to Stanford. What I heard was that "Harvard is a kind of weird", spoke by someone in that group.

"Thanks to a new branch of economics, business can create markets where there were none or fix them when they go wrong." This sentence makes me vomit.

Alvin Roth has saved lives with his mechanism design. Those carping without similar accomplishments should shut their yaps.

+1

The Nobel committee did exceedingly well with this choice.

Keynes would be pleased. This is "economics" as dentistry.

"If economists could manage to get themselves thought of as humble, competent people on a level with dentists, that would be splendid."

A gain for the world, a gain for economics as dentistry .. more evidence that economics as science is in many ways is a thing of the past.

Dentistry is not Science?

Teaching economics is like pulling teeth maybe...as for this duo's accomplishments, it sounds like they get credit for inventing a formulae, not that there's anything wrong with that, and a win for micro over macro, which is OK with me since macro sounds like religion anyway.

Greg, maybe you should leave the commenting to those of us who've made it to the 21st century, and don't waste our time with meaningless debates about 'what Hayek REALLY meant.'

Roth himself decided to quote Keynes' line, but suggests changing it to "engineers".

Elephant in the Room: Why didn't Gale get to share the prize with Shapley?

No elephant required. Nobels are not awarded posthumously, and Gale died in 2008.

Indeed, I stand corrected, as I was not aware of Gale's passing. But this "no-posthumous-prize" rule raises a new question (and a new elephant): why?

Probably because there's a cash prize that comes along with it. Hard to give cash to a dead man.

Dead men have heirs

Because Nobel designed (heh) his prizes to encourage further work by the recipients.

http://www.theonion.com/articles/the-onion-wins-nobel-prize,29926/

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