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UCLA professor wins Nobel for economics

Posted: October 15, 2012 1:00 p.m.
Updated: October 15, 2012 1:00 p.m.
 

LOS ANGELES (AP) — Rumpled, sleepy and bemused, a professor in California awoke Monday to the news that he had won the highest honor in economics — the Nobel Memorial Prize.

Lloyd Shapley, 89, a professor emeritus at the University of California, Los Angeles, was honored for his work a half-century earlier that analyzed match-making in markets. Shapley will share the $1.2 million prize with Alvin Roth, a 60-year-old Harvard Business School professor who is currently a visiting professor at Stanford University.

"I consider myself a mathematician and the award is for economics," Shapley told The Associated Press by telephone. "I never, never in my life took a course in economics."

Shapley and Roth studied the match-making that takes place when doctors are coupled with hospitals, students with schools, and human organs with transplant recipients.

Their work sparked a "flourishing field of research" and helped improve the performance of many markets, the Royal Swedish Academy of Sciences said.

Tall, slender and bearded, Shapley awoke to hear the doorbell at his home in the Pacific Palisades area of Los Angeles. He was confused to find two photographers on his doorstep.

An AP photographer spoke into his ear and congratulated the hard-of-hearing professor on winning the Nobel economics prize.

The study that won him the honor was simple, he said. "It's a nice, easy thing to prove."

Shapley said he might use the money to put a second floor on his home.

"It's all Swedish money," he joked. "I don't know what the unit is."

Roth and his wife got a 3:30 a.m. call from the prize committee.

"We missed the first call because we were asleep, but we had time to wake up and think that might be what it was," he told the AP. "My wife is going to go out and get us some coffee, and maybe we'll absorb it."

He said he didn't expect things to change too much, and he would go ahead and teach a class Monday at Stanford.

"But I imagine that they'll be listening with renewed interest," he said of his students.

Roth recently returned to Stanford, where he earned a master's and Ph.d in operations research from the engineering school, the school's provost, John Etchemendy, said at a news conference with Roth organized by Stanford on Monday morning.

"Our timing with Al couldn't have been more fortuitous," Etchemendy said.

Roth said he was lured back by the chance to work as a colleague with his graduate students who are now on the staff at Stanford.

"The weather's good too," he said.

The award focused on the professors' work on matching different agents in a market where prices aren't the deciding factor.

Shapley used game theory to analyze different matching methods in the 1950s and '60s. Together with U.S. economist David Gale, he developed a mathematical formula for how 10 men and 10 women could be coupled in a way so no two people would prefer each other over their current partners.

While that may have had little impact on marriages and divorces, the algorithm they developed has been used to better understand many different markets.

In the 1990s, Roth applied it to the market for allocating U.S. student doctors to hospitals. He also helped redesign the application process of New York City public high schools, ensuring fewer students ended up in schools that were not among their top choices.

At Monday's news conference, Roth talked about his work on kidney exchanges and with school choice in the Boston public school system.

"Market design is a sort of helping profession," he said.

Shapley is the son of renowned astronomer Harlow Shapley, whose work early in the 20th century included helping estimate the true size of the Milky Way galaxy.

"Now, I'm ahead of my father," Shapley said. "He got other prizes ... But he did not get a Nobel prize."

Shapley's sons, Peter and Christopher Shapley, said they were delighted that their father was being honored "after decades of hard work and numerous significant contributions to the field of game theory."

"We know he is tremendously thankful that his life's work is being recognized with such a prestigious award," they said in a statement issued by UCLA.

Shapley is the sixth UCLA faculty member to become a Nobel laureate.

Copyright 2012 The Associated Press.

 

 

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