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A thread to discuss economic theories and great economists.
To get the ball rolling I'll post the theory that won the noble price here:
To get the ball rolling I'll post the theory that won the noble price here:
Stable matching: Theory, evidence, and practical design
This year’s Prize to Lloyd Shapley and Alvin Roth extends from abstract theory developed in the 1960s,
over empirical work in the 1980s, to ongoing efforts to find practical solutions to real-world problems.
Examples include the assignment of new doctors to hospitals, students to schools, and human
organs for transplant to recipients. Lloyd Shapley made the early theoretical contributions, which were
unexpectedly adopted two decades later when Alvin Roth investigated the market for U.S. doctors. His
findings generated further analytical developments, as well as practical design of market institutions.
Traditional economic analysis studies markets where prices adjust so that supply equals demand. Both
theory and practice show that markets function well in many cases. But in some situations, the standard
market mechanism encounters problems, and there are cases where prices cannot be used at all to
allocate resources. For example, many schools and universities are prevented from charging tuition
fees and, in the case of human organs for transplants, monetary payments are ruled out on ethical
grounds. Yet, in these – and many other – cases, an allocation has to be made. How do such processes
actually work, and when is the outcome efficient?
This year’s Prize to Lloyd Shapley and Alvin Roth extends from abstract theory developed in the 1960s,
over empirical work in the 1980s, to ongoing efforts to find practical solutions to real-world problems.
Examples include the assignment of new doctors to hospitals, students to schools, and human
organs for transplant to recipients. Lloyd Shapley made the early theoretical contributions, which were
unexpectedly adopted two decades later when Alvin Roth investigated the market for U.S. doctors. His
findings generated further analytical developments, as well as practical design of market institutions.
Traditional economic analysis studies markets where prices adjust so that supply equals demand. Both
theory and practice show that markets function well in many cases. But in some situations, the standard
market mechanism encounters problems, and there are cases where prices cannot be used at all to
allocate resources. For example, many schools and universities are prevented from charging tuition
fees and, in the case of human organs for transplants, monetary payments are ruled out on ethical
grounds. Yet, in these – and many other – cases, an allocation has to be made. How do such processes
actually work, and when is the outcome efficient?
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