Stable allocation

“Economists Study How Societies Allocate Resources”

If you enjoy game theory and algorithms, I am happy to share with you a fascinating article summarising, for non-experts, the science behind “Stable Allocation and the Practice of Market Design“. This research area was initially investigated by David Gale and Lloyd Shapley (at UCLA) and was further extended by Alvin Roth (Harvard).  This week, game theorists Roth & Shapley were rewarded by the Nobel prize 2012 in Economic Sciences. Their work provides a broad framework and potent algorithms to allocate resources and rule markets when the price system does not apply or is not ethically acceptable. Such an algorithm has broad, real-life applications ranging from school admission procedures to the selection of organ transplant recipients. Here below are some key ideas and selected excerpts:

Trade Unexploited Gain & Stability             Deferred Acceptance               

Market Design                                         Kidney Exchange

Further readings:

One comment

  1. Hi.

    We are a small Production Company in Oslo doing educational films for school children.
    We are now making a film on the Nobel Prize in Economics for High School student and I am wondering if we could use the illustration above (Alvin, Roth and the formula). The film will only be published her:
    Kind regards,
    Gitte – for Snöball Film

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