This entry is a copy of an blog posting I made for the INFORMS Phoenix conference blog.
The Nobel Prize committee has never quite taken to operations research. If George Dantzig was not awarded the prize, it is hard to see what our field has to do in order to be recognized. But many recipients are well-known in our field and their research has drawn from, and inspired, research in operations research. This year’s Economics award recognizes two economists, Al Roth and Lloyd Shapley, who are very well known in our field, and have strong ties to INFORMS and its predecessor organizations.
Shapley was recognized by ORSA with the von Neumann Theory Prize in 1981. Here is part of the citation:
Lloyd Shapley has dominated game theory for the thirty-seven years since von Neumann and Morgenstern published their path-breaking book, The Theory of Games and Economic Behavior. Shapley’s key ideas include his inventions of convex games; stochastic games; the “Shapley” value for cooperative games; and his development of the theory of the core, including his independent discovery of the famous Bondareva-Shapley Theorem about the non-emptiness of the core. He has made important contributions to network flow theory and to non-atomic game theory. His work on the core influenced the development of fixed-point and complementarity theory, and his work on stochastic games influenced the development of dynamic programming. His individual work and his joint research with Martin Shubik has helped build bridges between game theory, economics, political science, and practice. Roth received the Lanchester Prize
Roth received the Lanchester Prize in 1990 for the book with coauthor Mari Ida Sotomayor, Two-Sided Matching: a Study in Game Theoretic Modeling and Analysis (Cambridge University Press, 1990). The citation read, in part:
n their book, Alvin Roth and Mari lda Oliveira Sotomayor use policy evaluation and empirical observation as a guide to deep mathematical analysis. They demonstrate in precise, insightful detail how game theory in general, and matching markets in particular evolved into fields that are grounded in strong theory and, at the same time, are quite relevant to real issues of practice. The theory of matching markets, to which the authors have been major contributors, originated with the famous 1962 Gale-Shapley paper, ‘College Admissions and the Stability of Marriage.
The Prize Page notes that Roth’s comments included the following:
When I received my PhD in Operations Research almost 20 years ago, game theory was as much at home in O.R. as in any other discipline. Today I sit in an economics department, and the situation is very different. Game theory has grown enormously and become the backbone of modern economic theory, but in operations research it seems to be studied and used relatively little. This is an enormous missed opportunity, and one of our hopes for the book is that it should help explain the nature of this opportunity.
I don’t know if Roth’s comments hold today. Certainly, game theory provides a strong underpinning to what we do, particularly in areas like supply chain and marketing with multiple actors with different objectives. And that area has grown tremendously since Roth’s comments in 1990. There are more than 200 papers at this conference that have some aspect of game theory in their abstract. So our field is certainly active in this area. But there is a tremendous amount of work in the economics literature also.
Congratulations to Roth and Shapley. It might not be a pure “Operations Research Nobel” but it is pretty darn close.
Image credits: From the official Nobel Prize page.