2012 Nobel for Economics to Roth and Shapley of U.S.
Alvin Roth and Lloyd Shapley of U.S. have been awarded the Nobel economics prize 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.
As per Royal Swedish Academy of Sciences, their research has sparked a “flourishing field of research” and helped improve the performance of many markets.
What is their research?
This Prize has been given to them “for the theory of stable allocations and the practice of market design”. The work is concerned with the best possible way to allocate resources, such as in school admissions or organs to patients who need transplants. It was a form of economic engineering, designing markets for situations where traditional market mechanisms based on price are not applicable or do not work well. Matching is a fundamental property of many markets and social institutions. For eg. matching jobs to workers, husbands to wives, doctors to hospitals, kidneys to patients etc.