WASHINGTON -- A longtime professor at UCLA and an economist at Harvard were awarded the Nobel Prize in economics Monday for their work in matching theory and its practical applications in markets, such as how job seekers are matched with employers and patients find donors of human organs.
Alvin Roth, a professor at Harvard recently lured to Stanford University, and Lloyd Shapley of UCLA "have answered these questions on a journey from abstract theory on stable allocations to practical design of market institutions," the Royal Swedish Academy of Sciences said in announcing the prize.
"For example, students have to be matched with schools, and donors of human organs with patients in need of a transplant," the academy said. "How can such matching be accomplished as efficiently as possible? What methods are beneficial to what groups?"
Roth and Shapley worked independently of one another. The academy said the combination of Shapley's basic theory and Roth's practical investigations "has generated a flourishing field of research and improved the performance of many markets."
Shapley, 89, a professor emeritus at UCLA who has been at the university since 1981, used game theory to research different matching systems and answer how one method may systematically benefit one agent or another in markets.
Roth, 60, who has a doctorate from Stanford and recently accepted a position at his alma mater, focused on market designs and exploring what enabled successful matching of agents and institutions.
He and his colleagues showed that stability is the key, the academy said, and Roth's work helped redesign programs for matching doctors with hospitals, students with schools and organ donors with patients.
The economics award, formally called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was the last of the Nobel awards to be announced this year.
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