The Royal Swedish Academy of Sciences said that Lloyd Shapley’s work has sparked a “flourishing field of research” and has awarded him this year's Nobel economics prize.
Shapley, 89, is a professor emeritus at UCLA and has been at the university since 1981. He is being rewarded for his work in matching theory and its practical applications in markets, for example, how job seekers are matched with employers or how patients find donors of human organs.
"For example, students have to be matched with schools, and donors of human organs with patients in need of a transplant," the academy said. "How can such matching be accomplished as efficiently as possible? What methods are beneficial to what groups?"
Shapley used game theory to research different matching systems and to answer how one method may systematically benefit one agent or another in markets. Though it is not technically a Nobel Prize because it wasn’t established in the will of Alfred Nobel, winners are awarded 8 million Swedish kronor, or about $1.2 million. Alvin Roth, a Stanford University professor was also awarded in this catagory.
Matt DeBord, KPCC Reporter; writes the DeBord Report KPCC.org