Tuesday, October 16, 2012

Congratulations Roth and Shapely

The Nobel Prize in Economics went to Al Roth and Lloyd Shapely for their work on matching markets.

Surprisingly practical. I suppose in an era of popular distrust of economics, it is nice to highlight an area of concrete contributions.  It still surprises me a bit since market design is such a new field to get a nobel prize already, even though it was the biggest thing amongst theory PhD students back when I was a grad student, theory seems on the wane and I'm not even sure most economists are even aware of the literature on market design. It is one of the few things I usually can point to though when people ask if economic theory has ever done anything that is demonstrably useful.

I didn't even know Shapley was still around. I learned about his marriage market algorithm as someting received as if from antiquity (the 50's and 60's were basically antiquity in the field of computer science), in computer science algoirthms classes, 6.046 to be precise, and then mostly came across his work in the context of the now mostly defunct Nash bargaining.

Al Roth I always knew as a pioneer of matching markets, but more as an experimental economist more generally these days. So it makes sense that they would be paired together in such a way, but a little surprising.

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