Al Roth wins the Nobel: Put Theory to ActionPosted: October 16, 2012 Filed under: economics, entrepreneurship, game theory, Markets 2 Comments
Alvin E. Roth is a Professor of Economics and Business Administration, currently at Harvard and soon at Stanford. He is one of the kindest people I know. As of yesterday, he is a Nobel laureate.
Dr. Roth’s interests include “game theory, experimental economics, and market design” says the Harvard website. But Dr. Roth became famous for putting economic theory to work – in the real world. He has designed and redesigned markets and institutions for better performance. Dr. Roth has changed how doctors and hospitals find each other, how students are assigned to high schools, and how kidney patients are matched with a donor.
Putting theory to work is risky. Most of us, me included, describe reality and hypothesize about causes and effects: what makes people cooperative or why some companies are successful, for example. We find it plenty difficult to convince peers, reviewers and editors of our ideas. Implementation is a whole different realm. We can advise, but usually let others practice: executives, government officials, leaders.
But Dr. Roth is different. Acting as both a scholar and an entrepreneur, he embarked on a difficult and perilous journey to reshape institutions. He had to convince laymen that economic theories are useful. He had to bear the risk of failure for organizational and political reasons. He could have failed even if right. Changing the way students are assigned to schools can disturb powerful education official and supervisors; reallocating kidneys to patients can upset hospitals and doctors.
Somehow, Roth triumphed. In his success, he made markets better and society – more prosperous. He also set a challenge for the rest of us. Coming up with a good idea and convincing your colleagues may be just the beginning of a journey. Putting it to action may be the ultimate goal.
For all of his accomplishments, Al remains friendly, humble and approachable. He seems excited by ideas, not glory. A day after the Nobel committee bestowed his prize, he wrote to me “it’s been a busy day…”. Probably nothing out of the ordinary for him.
This might be a good place to plug my spousal unit’s recent Bloomberg View column putting Roth’s kidney work in perspective:
And her earlier, longer piece on the whole situation that also describes Roth’s work:
Thanks for sharing. These are very interesting pieces!