Alvin E. Roth of Harvard University and Lloyd Shapley of UCLA have been awarded the Nobel Prize in economics for their work in market design and matching theory, the Royal Swedish Academy of Sciences announced Monday.
Roth and Shapley's work focuses on finding the most efficient way to match parties in a transaction, whether it be students to schools or organ donors to recipients, according to the academy.
Shapley used game theory to study matching models, and Roth built on them to make real-world changes to existing markets, including school choice and organ transplants, the academy said.
Elements of their work are built into software that guides kidney donations in the United States, as well as in school choice models in New York, Boston, New Orleans and other U.S. cities, Roth told reporters Monday.
Roth, who was awakened by an early morning call about their win, said he was not expecting the prize but was honored to share it with Shapley."I'm sure when I go to the class this morning my students will pay more attention," he said. The economics prize is the sixth and final of the annual awards that spotlight the world's top scholars and peacemakers.
The economics award was not among the original prizes created in 1895 by Swedish industrialist Alfred Nobel to honor work in physics, medicine, chemistry, literature and peace. It was added as a category in 1969 by the Swedish central bank in memory of the industrialist.