Chester Spatt always had a feeling that his friend and colleague, Alvin E. Roth, might someday win a Nobel Prize for his work.
That day has finally come.
The Nobel Committee announced last week Roth and Lloyd Shapley will share the Sveriges Riksbank Prize in Economic Sciences “for the theory of stable allocations and the practice of market design.”
Roth who is the George Gund Professor of Economics and Business Administration in the Department of Economics at Harvard University, is Jewish and was the first Andrew W. Mellon Professor of Economics at the University of Pittsburgh from 1982 to 1998. He “began and completed” much of his Nobel-wining research at Pitt, according to a university statement.
“Central to Professor Roth’s work on market design has been the use of theory and laboratory experiments,” Lise Vesterlund, the current Andrew W. Mellon Professor of Economics at Pitt, said in a prepared statement. Under his leadership, the Department of Economics at Pitt became, and is still regarded as being, one of the leaders in experimental economics.”
Roth was a member of Congregation Beth Shalom while he lived here.
“I thought this might happen,” said Spatt, professor of finance and director of the Center for Financial Markets at Carnegie Mellon University’s Tepper School of Business. “It’s hard to predict which year when someone so distinguished might win, but I thought Al’s theory was a contender. His work on matching has turned out to be extremely important and widely utilized in a variety of different contexts.
“He’s tackled very important projects for society in very innovative ways,” Spatt added, “and he’s certainly very deserving.”
According to Pitt, Roth’s work deals with matching theory and its practical applications in markets, such as how students are matched with schools, how doctors are matched with hospital positions, or how kidney donors are matched with recipients.
While some of these applications may not seem economically related, “these are still important allocation problems, even if the pricing system isn’t being used,” Spatt said. “Still, there’s an important role in what can we do to get high-quality allocations. And these are the kinds of problems he’s tackled.”
Aside from his work, “he’s incredibly modest and unassuming,” Spatt said of his friend, “and that’s one of the most striking features of him.”
(Lee Chottiner can be reached at email@example.com.)