RAW VIDEO: Nobelist Alvin Roth: Making Kidney Markets Work

US scholar Alvin Roth was named co-winner of the Nobel Economics Prize on Monday, along with Lloyd Shapely, for their work on how to best match supply and demand that has potential applications in organ donation, education and on the Internet.

Published

8 months ago

Categories

US

Topics

Markets

People

Alvin Roth, Lloyd Shapley

Places

United States of America, California, Massachusetts, Cambridge, Palo Alto

Transcript

SHOTLIST: PALO ALTO, CALIFORNIA, OCTOBER 15, 2012, SOURCE: STANFORD UNIVERSITY **NO RESALE for non-editorial purposes** SOUNDBITE 1 Alvin Roth (man), co-winner of Nobel Prize for Economics (English, 19 sec): "Economics has, somehow, a reputation among some parts of the public as being boring, as being about prices and statistics. I've always thought of economics as being -- not just part of the social sciences, but -- part of the humanities because it gives us a window into people's lives." SOUNDBITE 2 Alvin Roth (man), co-winner of Nobel Prize for Economics (English, 27 sec): [Explaining his research] "Even if you're healthy enough to give a kidney you may not be able to give a kidney to the person you love because there are issues of compatibility between patients and donors. If you are incompatible you can't give a kidney to the patient you love, but you're healthy enough to give a kidney, you could give a kidney to someone else's patient, and your patient could get a kidney from their donor -- and that's an exchange. Exchanges are what economists are good at, and so the question is: 'How to organize that exchange?' + 33 sec of images showing: - cutaway shots from press conference at Stanford University ---------------------------------------------------- AFP TEXT STORY Nobel-economy-Shapley-Roth,PROFILE Nobelists Shapley and Roth: making marriage, kidney markets work by Paul Handley =(GRAPHIC+PICTURE)= WASHINGTON, Oct 15, 2012 (AFP) - Economics traditionally has been largely about how prices move to balance out supply and demand in markets. Lloyd Shapley and Alvin Roth, the US academics who together won the Nobel Prize for economics Monday, have spent their careers understanding the mechanisms of market-like exchanges where there are no financial prices -- so-called "matching markets" like those for marriage partners, kidney donors and recipients, and candidates for places in universities. Lloyd Shapley Long a candidate for a Nobel, Shapley was called "the greatest game theorist of all time" by Robert Aumann, who won the Nobel economics prize seven years ago for his own work in the field. Born in Cambridge, Massachusetts in 1923, where his father was an astronomer at Harvard University, Shapley served in World War II before graduating in mathematics from Harvard in 1948. He completed a PhD in the same field from Princeton University in 1953. He was quickly distinguished by his authorship of what became known as the Shapley Value, a way to achieve the best possible outcomes from competition and cooperation in cooperative game theory. That led him to examine behavior in matching markets. His theorem developed with David Gale, the Gale-Shapley algorithm, seeks to optimize a stable set of matches in a "game" of two sides or two groups of "players." They proposed a way of using participant preference rankings to come up with the most stable result when matching groups of marriage-seeking men and women in a community. While not really practical for real-world marriage matches, the idea proved applicable in other situations. One, for instance, was finding ways to optimize the results of competition over positions for students at universities, when the students apply for several seats at different schools and have to list preferences. "The application to men and women is somewhat fanciful, although Match.com should clearly adopt this idea, but the application to students and schools is very real," said economist Alex Tabarrok on the Marginal Revolution blog. Shapley spent more than two decades from 1981 as a professor at the University of California-Los Angeles, before retiring some 10 years ago. His sons Peter and Christopher Shapley said in a statement Monday that he was "tremendously thankful" for the Nobel recognition. Alvin Roth Roth has been more active in putting matching market theories like Shapley's to work, with great success. Born in 1951, Roth said he did not set out to be an economist. A Harvard graduate, he first studied operational research, the application of mathematics to aid decision-making in an organization like a business. However, the told the Nobel Prize organization in an interview Monday, "The kinds of things that I found myself interested in, trying to understand and trying to make things work better, were things that involved people, and that meant economics." That took him to studying market design, which is about "understanding the details of markets in sufficient detail so we can help fix them when they are broken." He is most famous for applying this approach to the complicated "market" for kidneys. Often a recipient has a willing donor in his family, but the donor has the wrong blood type. Roth's work helped organize now-common swap exchanges where recipients and their willing-but-mismatched donors take part in a multiple kidney swap where all participants benefit, even if the donors' kidneys go to someone they did not even know. Roth "changed the way people think about the world," said economist Steven Levitt, on the popular Freakonomics website. Roth, who recently started as a professor at Stanford University after about 14 years at Harvard, credited Shapley and Gale for their pioneering work in the field he chose. "I'm a big follower of Lloyd's and it's going to be a great honor to get the Prize together with him," he said. END