Okt 162012
 

 

The award of the Nobel memorial prize in economics to Lloyd Shapley and Alvin Roth is overdue: Mr Shapley should have shared the 1994 prize with John Nash and others, while Mr Roth has been a leading contender in recent years. The choice is a particularly good one because economists have acquired some bad habits, and Mr Roth’s example may serve to break them.

Mr Shapley is one of the key figures in co-operative game theory, which for decades looked both abstract and pointless, a poor relation to regular game theory. However, co-operative game theory is finally coming into its own in a world where computerised auctions are used to award assets or contracts in clusters. Mr Shapley has added a new page to the thick catalogue of useless ideas that turned out to be useful after all. Practical approach secures Nobel award – FT.com.