Provost Beeson, In Presentation to Pitt's Board, Lauds Nobel Prize Winner and Former Pitt Economics Professor Alvin Roth

(These are the remarks delivered by Pitt Provost and Senior Vice Chancellor Patricia E. Beeson to the University of Pittsburgh Board of Trustees on Oct. 26, 2012. The presentation was prepared by Beeson, a Pitt professor of economics and public policy since 1983, with assistance from Distinguished University Professor Jean-Francois Richard, chair of the Department of Economics, and Lise Vesterlund, Andrew W. Mellon Professor of Economics.) 

Last week [Oct. 15] Alvin Roth was awarded the Nobel Prize in economics for work that he proudly acknowledged was conducted largely while he was on the faculty at the University of Pittsburgh.  

Professor Roth joined the faculty of economics at Pitt in 1982 as the inaugural holder of the Andrew W. Mellon Professor of Economics and remained on our faculty for 16 years before he was recruited to join the faculty at Harvard.  

While at Pitt, Al conducted some of his most important work bringing market-type thinking to areas in which that approach historically had not been used. Unlike the typical market in which buyers pay a price and choose from what they can afford, there are lots of things you can’t simply choose, you also have to be chosen—such as jobs, schools, organ transplants, and spouses.   

Al’s work combines the use of theory and laboratory experiments to understanding how these non-traditional markets work and to design and test efficient solutions when they do not work. It is for this work on market design that he was awarded the Nobel Prize.  

His interest in these markets began with the study of how graduates of our medical school, and medical schools around the country, are matched to residencies. For decades this match has been facilitated through the National Residency Matching Program, to which medical students submit their ranked choices, as do hospitals, and a central clearinghouse matches the students to the hospitals for their residencies. In the late 1970s, this market started to unravel as more and more students decided not to participate because they could find better matches outside the system. This reached a point of crisis in the mid-1990s, when only 85 percent of students participated.  

Through his work, Al Roth determined the sources of the instability and was commissioned to develop the matching algorithm that is still in use today.  

Since that initial work, Professor Roth has also been called upon to examine and design markets to solve other matching problems, such as the way public-school students are assigned to schools in New York and in Boston. Key to his work has been the elimination of strategic incentives for participants to “game the system” in order to try to secure higher-ranked choices.  

Most recently, Roth and Pitt graduate and former faculty member Utku Unver have received national attention for improving the process through which kidney donors are matched to patients. This is another very tricky matching problem. Consider a man who would not donate a kidney in other circumstances but might happily do so if his wife needs one. However, if the spouses’ blood types do not match, the kidney transplant is not a match, but there could potentially be a match if they could find another couple with the mirror-image problem. Al and Utku’s work provided a solution not only to this relatively simply matching problem, but also to matches that involve chains of patients and donors through which the husband gives his kidney to someone, whose spouse gives a kidney to someone else, whose spouse gives a kidney to someone else, and on and on until someone ultimately gives a kidney to the original husband’s spouse. 

Al is recognized not only for the problems he has solved, but also more generally for the approach that he has taken to solving these problems. In his early days at Pitt, Al pioneered the use of laboratory experiments to empirically test the implications of game-theoretic models of economic behavior, such as the residency-matching problem. In doing so, he built at Pitt one of the strongest teams of experimental economists in the world. This approach to studying economic problems has since become part of the mainstream in economics, and the University of Pittsburgh continues to be internationally recognized as one of the leading centers for experimental economics because of Al’s work and because of the work of colleagues he attracted to Pitt, including the current Mellon Chair, Lise Vesterlund.

The Nobel Prize is a well-deserved recognition of Professor Roth’s visionary research in both market design and experimental economics and reflects well on the atmosphere for pathbreaking research we have here at Pitt. As Professor Roth noted in the press last week, some of his most exciting work happened while he was at Pitt!