Dr. Debesh Bhowmik: NOBEL PRIZE IN ECONOMICS-2012

NOBEL ECONOMISTS – 2012

Dr.Debesh Bhowmik

The Royal Swedish Academy of Sciences has decided to award The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2012 to Alvin E. Roth, of Harvard University and Harvard Business School, and Lloyd S. Shapley, of the University of California, Los Angeles, "for the theory of stable allocations and the practice of market design."

This year's Prize concerns a central economic problem: how to match different agents as well as possible. Lloyd Shapley used so-called cooperative game theory to study and compare different matching methods. A key issue is to ensure that a matching is stable in the sense that two agents cannot be found who would prefer each other over their current counterparts. Shapley and his colleagues derived specific methods -- in particular, the so-called Gale-Shapley algorithm -- that always ensure a stable matching. These methods also limit agents' motives for manipulating the matching process. Shapley was able to show how the specific design of a method may systematically benefit one or the other side of the market.
Alvin Roth recognized that Shapley's theoretical results could clarify the functioning of important markets in practice. In a series of empirical studies, Roth and his colleagues demonstrated that stability is the key to understanding the success of particular market institutions. Roth was later able to substantiate this conclusion in systematic laboratory experiments. He also helped redesign existing institutions for matching new doctors with hospitals, students with schools, and organ donors with patients. These reforms are all based on the Gale-Shapley algorithm, along with modifications that take into account specific circumstances and ethical restrictions, such as the preclusion of side payments.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.
**Alvin E. Roth, a Jewish American, graduated from Columbia University in 1971 with a degree in Operations research. He then moved to Stanford University, receiving both his masters and PhD in Operations research there in 1973 and 1974 respectively.
After leaving Stanford, Roth went on to teach at the University of Illinois until 1982. He then served as the Andrew W. Mellon Professor of Economics at the University of Pittsburgh until 1998, when he left to join the faculty at Harvard where he remained until deciding to return to Stanford in 2012. In 2013 he will become a full member of the Stanford faculty and will take emeritus status at Harvard.
Roth is an Alfred P. Sloan fellow, a Guggenheim Fellow, and a fellow of the American Academy of Arts and Sciences.He is also a member of the National Bureau of Economic Research (NBER) and the Econometric Society. Al Roth, a Jewish American, graduated from Columbia University in 1971 with a degree in Operations research. He then moved to Stanford University, receiving both his masters and PhD in Operations research there in 1973 and 1974 respectively.
After leaving Stanford, Roth went on to teach at the University of Illinois until 1982. He then served as the Andrew W. Mellon Professor of Economics at the University of Pittsburgh until 1998, when he left to join the faculty at Harvard where he remained until deciding to return to Stanford in 2012. In 2013 he will become a full member of the Stanford faculty and will take emeritus status at Harvard.
Roth is an Alfred P. Sloan fellow, a Guggenheim Fellow, and a fellow of the American Academy of Arts and Sciences.He is also a member of the National Bureau of Economic Research (NBER) and the Econometric Society.

Roth is the author of numerous scholarly articles, books, and other publications. A selection:

1979. Axiomatic Models of Bargaining, Lecture Notes in Economics and Mathematical Systems. Springer Verlag.
1985. Game-Theoretic Models of Bargaining, (editor)Cambridge University Press, 1985.
1987. Laboratory Experimentation in Economics: Six Points of View. (editor) Cambridge University Press. (Chinese translation, 2008)
1988. The Shapley Value: Essays in Honor of Lloyd S. Shapley. (editor) Cambridge University Press.
1990. Two-Sided Matching: A Study in Game-Theoretic Modeling and Analysis. With Marilda Sotomayor. Cambridge University Press.
1995. Handbook of Experimental Economics. Edited with J.H. Kagel. Princeton University Press.
2001. Game Theory in the Tradition of Bob Wilson. Edited with Bengt Holmstrom and Paul Milgrom.

Roth has published over 70 articles in peer reviewed journals. According to Scopus, the most widely cited have been:

——— (1985). "The College Admissions Problem is not Equivalent to the Marriage Problem". Journal of Economic Theory 36 (2): 277–288.
(1991). "A Natural Experiment in the Organization of Entry-Level Labor Markets: Regional Markets for New Physicians and Surgeons in the United Kingdom". American Economic Review (American Economic Association) 81 (3): 415–440.
Erev, I.; ——— (1998). "Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria". American Economic Review (American Economic Association) 88 (4): 848–881.
Slonim, R.; ——— (1998). "Learning in High Stakes Ultimatum Games: An Experiment in the Slovak Republic". Econometrica (The Econometric Society) 66 (3): 569–596.
———; Peranson, E. (1999). "The Redesign of the Matching Market for American Physicians: Some Engineering Aspects of Economic Design". American Economic Review (American Economic Association) 89 (4): 748–780
———; Ockenfels, A. (2002). "Last-minute bidding and the rules for ending second-price auctions: Evidence from eBay and Amazon auctions on the internet". American Economic Review 92 (4): 1093–1103..
———; Sönmez, T.; Ünver, M. U. (2004). "Kidney exchange". Quarterly Journal of Economics 119 (2): 457–488

***Lloyd Stowell Shapley (born June 2, 1923) is a distinguished American mathematician and economist. He is a Professor Emeritus at University of California, Los Angeles, affiliated with departments of Mathematics and Economics. He has contributed to the fields of mathematical economics and especially game theory. Since the work of von Neumann and Morgenstern in 1940s, Lloyd Shapley has been regarded by many experts as the very personification of game theory. With Alvin E. Roth, Shapley won the 2012 Nobel Memorial Prize in Economic Sciences "for the theory of stable allocations and the practice of market design. Lloyd Shapley was born on June 2, 1923, in Cambridge, Massachusetts, one of the sons of the distinguished astronomer Harlow Shapley. He was a student at Harvard when he was drafted in 1943, and in the same year, as a sergeant in the Army Air Corps in Chengdu, China, he received the Bronze Star decoration for breaking the Soviet weather code. After the war, he returned to Harvard and graduated with an A.B. in mathematics in 1948. After working for one year at the RAND Corporation, he went to Princeton University where he received a Ph.D. in 1953. His thesis and post-doctoral work introduced the Shapley value and the core solution in game theory. After graduating, he remained at Princeton for a short time before going back to the RAND corporation from 1954 to 1981. Since 1981 he has been a professor at UCLA

His publications

A Value for n-person Games [1953], In Contributions to the Theory of Games volume II, H.W. Kuhn and A.W. Tucker (eds.).
Stochastic Games [1953], Proceedings of National Academy of Science Vol. 39, pp. 1095–1100.
A Method for Evaluating the Distribution of Power in a Committee System [1954] (with Martin Shubik), American Political Science Review Vol. 48, pp. 787–792.
College Admissions and the Stability of Marriage [1962] (with David Gale), The American Mathematical Monthly Vol. 69, pp. 9–15.
Simple Games : An Outline of the Descriptive Theory [1962], Behavioral Science Vol. 7, pp. 59–66.
On Balanced Sets and Cores [1967], Naval Research Logistics Quarterly Vol. 14, pp. 453–460.
On Market Games [1969] (with Martin Shubik), Journal of Economic Theory Vol. 1, pp. 9–25.
Utility Comparison and the Theory of Games [1969], La Decision, pp. 251–263.
Cores of Convex Games [1971] International Journal of Game Theory Vol. 1, pp. 11–26.
The Assignment Game I: The Core [1971] (with Martin Shubik), International Journal of Game Theory Vol. 1, pp. 111–130.
Values of Non-Atomic Games [1974] (with Robert Aumann), Princeton University Press.
Mathematical Properties of the Banzhaf Power Index [1979] (with Pradeep Dubey), Mathematics of Operations Research Vol. 4, pp. 99–132.
Long-Term Competition – A Game-Theoretic Analysis [1994] (with Robert Aumann), In Essays in Game Theory: In Honor of Michael Maschler Nimrod Megiddo (ed.), Springer-Verlag.
Potential Games [1996] (with Dov Monderer), Games and Economic Behavior Vol. 14, pp. 124–143.
On Authority Distributions in Organizations [2003] (with X.Hu), Games and Economic Behavior Vol. 45, pp. 132–152, 153-170.