STOCKHOLM — Americans Alvin Roth and Lloyd Shapley were awarded the Nobel economics prize on Monday for research that helps explain the market processes at work when doctors are assigned to hospitals, students to schools and human organs for transplant to recipients.
Both prize-winners have strong academic ties to Israel, considered a world leader in game theory economics.
The Royal Swedish Academy of Sciences cited Roth and Shapley for “the theory of stable allocations and the practice of market design.”
Roth, 60, is a professor at Harvard University in Boston. Shapley, 89, is a professor emeritus at University of California Los Angeles.
According to his curriculum vitae, in 1986 Roth was a visiting professor of economics at the Technion Institute in Haifa. He then returned in 1995 as a visiting professor at the Hebrew University in Jerusalem and Tel Aviv University.
He worked in the past with Israeli-American Nobel Laureate Daniel Kahneman, who won the prize with Israeli Amos Tverski in 2002 for research in behavioral economics.
Shapely, considered one of the father’s of game theory, has an honorary doctorate from Hebrew University and in the past he worked with Israeli Nobel Prize Laureate Robert Auman in the field.
Shapley made early theoretical contributions to explaining how markets work, and Roth took it further by applying it to the market for US doctors, the Swedish Academy said.
“This year’s prize concerns a central economic problem: how to match different agents as well as possible,” the academy said. “Even though these two researchers worked independently of one another, the combination of Shapley’s basic theory and Roth’s empirical investigations, experiments and practical design has generated a flourishing field of research and improved the performance of many markets.”
The Nobel Memorial Prize in Economic Sciences was the last of the 2012 Nobel awards to be announced. The award is not technically a Nobel Prize, because unlike the five other awards it wasn’t established in the will of Alfred Nobel, the Swedish industrialist also known for inventing dynamite.
The economics prize was created by the Swedish central bank in Nobel’s memory in 1968, and has been handed out with the other prizes ever since. Each award is worth 8 million Swedish kronor, or about $1.2 million.
Last year’s economics prize went to US economists Thomas Sargent and Christopher Sims for describing the cause-and-effect relationship between the economy and government policy.
The 2012 Nobel Prizes in medicine, physics, chemistry and literature and the Nobel Peace Prize were announced last week. All awards will be presented at a ceremony on December 10, the anniversary of Nobel’s death in 1896.