“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
- WSJ press article – Nobel 2012 Economic Sciences
- What is market design anyway? blog post.
- Fuhito Kojima home page
- Stable allocation mechanisms…deep inside !
- Faster algorithms for stable allocation
- Mathematician, puzzle lover David Gale has died
- A nice video about The Stable Marriage/Matching Problem by Emily Riehl
- The stable marriage/matching algorithm
- Other stable matching algorithms