Some time ago I had half-written a post calling for a Nobel prize for Al Roth. It was after he gave his Nancy Schwartz lecture at Kellogg and I decided not to publish it because I thought maybe it was just a little too soon. Not too soon to get the prize but too soon to expect the Nobel folks to give it to him. I am glad I was wrong.
Don’t forget his very important co-authors Tayfun Sonmez, Attila Abdulkadiroglu, and Utku Unver. These guys, Tayfun especially, were still working on matching theory when nobody else was interested and before all the practical applications (mainly coming out of their collaboration with Al) started to attract attention.
This is a time for microeconomics to celebrate. When you are on a plane and you tell the person next to you that you’re an economist, they ask you about interest rates. Everyone instinctively equates economics with macroeconomics. And that’s probably because most people have the impression that macroeconomics is where economists have the biggest impact.
But actually microeconomic theory has already had a bigger impact on your life that macroeconomic theory ever will. And there’s no politics tangled up in microeconomics. When you meet a microeconomic theorist it never once occurs to you to check the saline content of their nearest body of water.
There are no fundamental disagreements about basic principles of microeconomics. And I would say that Al Roth epitomizes what’s great about microeconomics. He has no “field:” he does classical game theory/bargaining theory and he does behavioral economics. He does theory and experiments. He theorizes about market design and he actually designs markets.
I never met Shapley and I only saw him give a couple talks when he was already way past his prime. But gappy3000 reminds me that he and John Nash invented a game called Fuck Your Buddy. So that’s something. And now he has a Nobel Prize. And of course without his work there would be no prize for Roth either. David Gale should have shared the prize but he died a few years ago.