“Economics is about real life …”
Transcript of the telephone interview with Alvin E. Roth immediately following the announcement of the 2012 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, 15 October 2012. The interviewer is Nobelprize.org’s Allegra Grevelius.
[Allegra Grevelius] Hello, is that Alvin Roth?
[Alvin Roth] It is.
[AG] My name is Allegra Grevelius and I’m calling from Nobelprize.org, the Nobel Prize website.
[AR] Uh, huh.
[AG] I’m sorry to bother you so early in the morning.
[AR] We are already up.
[AG] I expect so. Nobelprize.org has a tradition of recording short interviews with new Laureates and I was hoping that we could have a quick chat now.
[AR] OK, I’m having a little trouble hearing you. Can you speak up?
[AG] Ah yes, right. Of course, I’ll speak up. First of all, congratulations.
[AR] Thank you.
[AG] How do you feel today? How did you feel when you received the news?
[AR] Well, I’m surprised but it is still too early in the morning for me to have more articulated feelings than that. I imagine that it’s going to be a busy day. My phone has already started to ring.
[AG] I understand. Many of Nobelprize.org’s visitors are high school students. How would you explain your prize awarded work in layman’s terms?
[AR] Well, my prize is about matching and matching is the work that the economy does when deciding for instance which students go to which schools. If they have a choice – so high school students in some cities get matched through a choice system where they submit preferences and the schools have requirements or perhaps preferences also. And some decisions are made about who goes where. And that’s what matching is about. It’s about who gets what. And we try to, in the school choice, we try to make it happen in a way that is sufficient, but doesn’t send people to schools they would rather swap with other people if the schools would allow them. And if your students are in high school, they are going to go through many matching markets in their lives. They’re going to get married, they’re going to get jobs, and so, they can think about us then.
[AG] So your work has a lot of practical applications in our lives, school applications, maybe matching kidney donors and receivers. Are you driven as an economist by these questions by applying your theories to real life?
[AR] Yes, economics is about real life, so I’m very interested in that.
[AG] When you recruit post docs and students, do you apply the same theories?
[AR] Well, my post docs are all different, but they are all interested in economics and how it shapes our lives and how we can learn more about it. We want to try to make things better but we also want to learn to understand them. Those are related tasks. Different post docs, you know, have different points of view.
[AG] Yeah, indeed. As a young person, what inspired you to become an economist?
[AR] Well, I didn’t become an economist until rather late in life. My PhD is inoperations research. I was interested in making things work better, and using mathematics to help do that. So operations research is what I studied as an undergraduate and graduate student. The kinds of things that I found myself interested in, trying to understand and trying to make work better were things that involved people and that meant economics.
[AG] And today you teach a course called experimental economics, is that what you are talking about now? Can you tell us more about that?
[AR] Well, I teach two courses today. One is called market design and one is called experimental economics. It’s on Monday. Experimental economics is about conducting experiments, bringing economics into the laboratory or creating controlled conditions in the field, that allow us to understand better what we are seeing in less controlled circumstances. Market design is about understanding the details of markets in sufficient detail so that we can help fix them when they are broken.
[AG] In 1988 you wrote a book called “The Shapley Value, essays in honour of Lloyd S. Shapley”. How did his work influence you?
[AR] Well, so … Lloyd Shapley and David Gale, developed the first clear theory of what’s called stable matching and they thought about algorithms. They really wrote a, they didn’t think about it that way at the time, but they really wrote a very early market design paper and I’ve been a big follower of theirs in the sense that I wrote a book with Marilda Oliveira Sotomayor in 1990 that was called “Two Sided Matching” it sort of followed up the developments in the intervening 30 years in the theory of those kinds of markets. So I’m a, you know, I’m a big follower of Lloyd’s and it’s going to be a great honour to get the Prize together with him.
[AG] It is. I read that you have a blog and …
[AR] Yes, I do, on market design.
[AG] In your latest post you wrote about the correlation between a country’s chocolate consumption to the number of Nobel Prizes they get. What will you post today?
[AR] Ah, well, I don’t know. I may not have time to blog today. It’s shaping up to be a busy day. As I speak to you, I’m hearing beeps that suggest that other people are calling on the telephone.
[AG] I understand. Last question, how are you going to celebrate today, if you get a chance?
[AR] Well, pretty soon I’m going to have a cup of coffee.
[AG] That sounds good. That sounds excellent. Well congratulations and we look forward to meeting you in Stockholm in December.
[AR] I’m looking forward already.
[AG] OK, thank you.
[AR] Thank you.
[AG] Bye bye.
Listen to the Interview
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