Two American scholars were awarded the Nobel economics prize on Monday for studies on the match-making that takes place when doctors are coupled up with hospitals,students with schools and human organs with transplant recipients.
The work of Alvin Roth and Lloyd Shapley has sparked a flourishing field of research and helped improve the performance of many markets,the Royal Swedish Academy of Sciences said.
Roth,60,is a professor at Harvard Business School,but currently is a visiting professor at Stanford University. Shapley,89,is a professor emeritus at University of California Los Angeles.
Upon learning that he and Roth had won the $1.2 million in Los Angeles early Monday,Shapely said,I consider myself a mathematician and the award is for economics. I never,never in my life took a course in economics.
Citing the theory of stable allocations and the practice of market design, the award focused on the problem of matching different agents in a market in situations where prices arent the deciding factor.
Together with US economist David Gale,Shapley developed a mathematical formula for how 10 men and 10 women could be coupled in a way so that no two people would prefer each other over their current partners.
In the 1990s,Roth applied it to the market for allocating US student doctors to hospitals and developed a new algorithm that was adopted by the National Resident Matching Program,which helps match resident doctors with the right hospitals. Roth said,I think this will make market design more visible to economists and people who can benefit from market design.
The theory of stable allocations and the practice of market design.
WHY DOES IT MATTER?
Their research focused on the problem of matching different agents in a market doctors with hospitals,students with schools and human organs with transplant recipients in situations where prices arent the deciding factor.