Al Roth is the George Gund Professor of Economics and Business Administration in the Department of Economics at Harvard University, and in the Harvard Business School. His research, teaching, and consulting interests are in game theory, experimental economics, and market design. The best known of the markets he has designed (or, in this case, redesigned) is the National Resident Matching Program, through which approximately twenty thousand doctors a year find their first employment as residents at American hospitals. He has recently been involved in the reorganization of the market for Gastroenterology fellows, which started using a clearinghouse in 2006 for positions beginning in 2007. He helped design the high school matching system used in New York City to match approximately ninety thousand students to high schools each year, starting with students entering high school in the Fall of 2004. He helped redesign the matching system used in Boston Public Schools, adopted for students starting school in September 2006. He is one of the founders and designers of the New England Program for Kidney Exchange, for incompatible patient-donor pairs. He is the chair of the American Economic Association's Ad Hoc Committee on the Job Market, which has designed a number of recent changes in the market for new Ph.D. economists. He is a Fellow of the American Academy of Arts and Sciences and the Econometric Society, and has been a Guggenheim and Sloan fellow. He received his Ph.D at Stanford University, and came to Harvard from the University of Pittsburgh, where he was the Andrew Mellon Professor of Economics.
Roth, A. E., and M. Sotomayor. Two-Sided Matching: A Study in Game-Theoretic Modeling and Analysis. Paperback ed. Cambridge University Press, 1992. (Winner of Frederick W. Lanchester Prize Awarded for the best contribution to operations research and the management sciences published in English presented by Institute for Operations Research and the Management Science.)
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Holmstrom, Bengt, Paul Milgrom, and Alvin E Roth, eds. Game Theory in the Tradition of Bob Wilson. Berkeley, CA: Berkeley Electronic Press, 2002.
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Roth, A. E., and M. Sotomayor. Two-Sided Matching: A Study in Game-Theoretic Modeling and Analysis. Econometric Society Monographs. Cambridge University Press, 1990. (Winner of Frederick W. Lanchester Prize Awarded for the best contribution to operations research and the management sciences published in English presented by Institute for Operations Research and the Management Sciences.)
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Marketplaces are often small parts of large markets, and both markets and marketplaces come in many varieties. Market design seeks to understand what marketplaces must accomplish to enable different kinds of markets. Marketplaces can have varying degrees of success, and there can be marketplace failures. I'll discuss labor markets like the market for new economists as well as markets for new lawyers and doctors that have suffered from the unraveling of appointment dates to well before employment begins. Markets work best if they enjoy social support, but some markets are repugnant in the sense that some people think they should be banned, even though others want to participate in them. Laws banning such markets often contribute to the design of illegal black markets, and this raises new issues for market designers. I'll briefly discuss markets and black markets for narcotics, marijuana, sex, and surrogacy as well as the design of markets for kidney transplants in the face of widespread laws against (and broader repugnance for) compensating organ donors. I conclude with open questions and engineering challenges.
In an experiment, players ability to learn to cooperate in the repeated prisoners dilemma was substantially diminished when the payoffs were noisy, even though players could monitor one anothers past actions perfectly. In contrast, in one-time play against a succession of opponents, noisy payoffs increased cooperation, by slowing the rate at which cooperation decays. These observations are consistent with the robust observation from the psychology literature that partial reinforcement (adding randomness to the link between an action and its consequences while holding expected payoffs constant) slows learning. This effect is magnified in the repeated game: when others are slow to learn to cooperate, the benefits of cooperation are reduced, which further hampers cooperation. These results show that a small change in the payoff environment, which changes the speed of individual learning, can have a large effect on collective behavior. And they show that there may be interesting comparative dynamics that can be derived from careful attention to the fact that at least some economic behavior is learned from experience.
Markets sometimes unravel, with offers becoming inefficiently early. Often this is attributed to competition arising from an imbalance of demand and supply, typically excess demand for workers. However this presents a puzzle, since unraveling can only occur when firms are willing to make early offers and workers are willing to accept them. We present a model and experiment in which workers' quality becomes known only in the late part of the market. However, in equilibrium, matching can occur (inefficiently) early only when there is comparable demand and supply: a surplus of applicants, but a shortage of high quality applicants.
Accommodating couples has been a long-standing issue in the design of centralized labor market clearinghouses for doctors and psychologists, because couples view pairs of jobs as complements. A stable matching may not exist when couples are present. This article's main result is that a stable matching exists when there are relatively few couples and preference lists are sufficiently short relative to market size. We also discuss incentives in markets with couples. We relate these theoretical results to the job market for psychologists, in which stable matchings exist for all years of the data, despite the presence of couples.
Peter A. Coles, John Cawley, Phillip B. Levine, Muriel Niederle, Alvin E. Roth and John J. Siegfried
This paper, written by the members of the American Economic Association (AEA) Ad Hoc Committee on the Job Market, provides an overview of the market for new Ph.D. economists. It describes the role of the AEA in the market and focuses in particular on two mechanisms adopted in recent years at the suggestion of our Committee. First, job market applicants now have a signaling service to send an expression of special interest to up to two employers prior to interviews at the January Allied Social Science Associations (ASSA) meetings. Second, the AEA now invites candidates who are still on the market, and employers whose positions are still vacant, to participate in a web-based 'scramble' to reduce search costs and thicken the late part of the job market. We present statistics on the activity in these market mechanisms and present survey evidence that both mechanisms have facilitated matches. The paper concludes by discussing the emergence of platforms for transmitting job market information and other design issues that may arise in the market for new economists.
Organ donations from deceased donors (cadavers) provide the majority of transplanted organs in the United States, and one deceased donor can save numerous lives by providing multiple organs. Nevertheless, most Americans are not registered organ donors despite the relative ease of becoming one. We study in the laboratory an experimental game modeled on the decision to register as an organ donor and investigate how changes in the management of the organ waiting list might impact the donation rate. We find that an organ allocation policy giving priority on waiting lists to those who previously registered as donors has a significant positive impact on registration.
Itai Ashlagi, Duncan S. Gilchrist, Alvin E. Roth and Michael A. Rees
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Ashlagi, Itai, Duncan S. Gilchrist, Alvin E. Roth, and Michael A. Rees. "NEAD Chains in Transplantation."American Journal of Transplantation 11, no. 12 (December 2011): 2780–2781. (Letter to the Editor.)
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C. Bradley Wallis, Kannan P. Samy, Alvin E. Roth and Michael A. Rees
Kidney paired donation (KPD) was first suggested in 1986, but it was not until 2000 when the first paired donation transplant was performed in the U.S. In the past decade, KPD has become the fastest growing source of transplantable kidneys, overcoming the barrier faced by living donors deemed incompatible with their intended recipients. This review provides a basic overview of the concepts and challenges faced by KPD as we prepare for a national pilot program with the United Network for Organ Sharing. Several different algorithms have been creatively implemented in the U.S. and elsewhere to transplant paired donors, each method uniquely contributing to the success of KPD. As the paired donor pool grows, the problem of determining allocation strategies that maximize equity and utility will become increasingly important as the transplant community seeks to balance quality and quantity in choosing the best matches. Financing for paired donation is a major issue, as philanthropy alone cannot support the emerging national system. We also discuss the advent of altruistic or non-directed donors in KPD, and the important role of chains in addition to exchanges. This review is designed to provide insight into the challenges that face the emerging national KPD system in the U.S., now five years into its development.
Wallis, C. Bradley, Kannan P. Samy, Alvin E. Roth, and Michael A. Rees. "Kidney Paired Donation." Nephrology, Dialysis, Transplantation 26, no. 7 (July 2011): 2091–2099.
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Itai Ashlagi, Duncan S. Gilchrist, Alvin E. Roth and Michael A. Rees
Since 2008 kidney exchange in America has grown in part from the incorporation of non-directed donors in transplant chains rather than simple exchanges. It is controversial whether these chains should be performed simultaneously ("domino paired donation," DPD) or nonsimultaneously ("nonsimultaneous extended altruistic donor chains," NEAD). NEAD chains create "bridge donors" whose incompatible recipients receive kidneys before the bridge donor donates, and so risk reneging by bridge donors, but offer the opportunity to create more transplants by overcoming logistical barriers inherent in simultaneous chains. Gentry et al. simulated whether DPD or NEAD chains would produce more transplants when chain segment length was limited to three transplants and reported that DPD performed at least as well as NEAD chains. As this contrasts with the experience of several groups involved in kidney paired donation, we performed simulations that allowed for longer chain segments and used actual patient data from the Alliance for Paired Donation. When chain segments of 4-6 are allowed in the simulations, NEAD chains produce more transplants than DPD. Our simulations showed not only more transplants as chain length increased, but also that NEAD chains produced more transplants for highly sensitized and blood type O recipients
Two independent, but related, choice prediction competitions are organized that focus on behavior in simple two-person extensive form games: one focuses on predicting the choices of the first mover and the other on predicting the choices of the second mover. The competitions are based on an estimation experiment and a competition experiment. The two experiments use the same methods and subject pool and examine games randomly selected from the same distribution. The current introductory paper presents the results of the estimation experiment and clarifies the descriptive value of some baseline models. The best baseline model assumes that each choice is made based on one of several rules. The rules include rational choice, level-1 reasoning, an attempt to maximize joint payoff, and an attempt to increase fairness. The probability of using the different rules is assumed to be stable over games. The estimated parameters imply that the most popular rule is rational choice; it is used in about half the cases. To participate in the competitions, researchers are asked to email the organizers models (implemented in computer programs) that read the incentive structure as input and derive the predicted behavior as an output. The submission deadline is December 1, 2011; the results of the competition experiment will not be revealed until that date. The submitted models will be ranked based on their prediction error. The winners of the competitions will be invited to write a paper that describes their model.
The shortage of transplant kidneys has spurred debate about legalizing monetary payments to donors to increase the number of available kidneys. However, buying and selling organs faces widespread disapproval. We survey a representative sample of Americans to assess disapproval for several forms of kidney markets and to understand why individuals disapprove by identifying factors that predict disapproval, including disapproval of markets for other body parts, dislike of increased scope for markets, and distrust of markets generally. Our results suggest that while the public is potentially receptive to compensating kidney donors, among those who oppose it, general disapproval towards certain kinds of transactions is at least as important as concern about specific policy details. Between 51% and 63% of respondents approve of the various potential kidney markets we investigate, between 42% and 58% want such markets to be legal, and 38% of respondents disapprove of at least one market. Respondents who distrust markets generally are not more disapproving of kidney markets; however we find significant correlations between kidney market disapproval and attitudes reflecting disapproval towards certain transactions-including both other body markets and market encroachment into traditionally non-market exchanges, such as food preparation.
Ido Erev, Eyal Ert, Alvin E. Roth, Ernan E. Haruvy, Stefan Herzog, Robin Hau, Ralph Hertwig, Terrence Steward, Robert West and Christian Lebiere
Erev, Ert, and Roth organized three choice prediction competitions focused on three related choice tasks: one-shot decisions from description (decisions under risk), one-shot decisions from experience, and repeated decisions from experience. Each competition was based on two experimental datasets: an estimation dataset and a competition dataset. The studies that generated the two datasets used the same methods and subject pool and examined decision problems randomly selected from the same distribution. After collecting the experimental data to be used for estimation, the organizers posted them on the Web, together with their fit with several baseline models, and challenged other researchers to compete to predict the results of the second (competition) set of experimental sessions. Fourteen teams responded to the challenge: the last seven authors of this paper are members of the winning teams. The results highlight the robustness of the difference between decisions from description and decisions from experience. The best predictions of decisions from descriptions were obtained with a stochastic variant of prospect theory assuming that the sensitivity to the weighted value decreases with the distance between the cumulative payoff functions. The best predictions of decisions from experience were obtained with models that assume reliance on small samples. Merits and limitations of the competition method are discussed.
A choice prediction competition is organized that focuses on decisions from experience in market entry games (http://sites.google.com/site/gpredcomp/ and http://www.mdpi.com/si/games/predict-behavior/). The competition is based on two experiments: An estimation experiment, and a competition experiment. The two experiments use the same methods and subject pool, and examine games randomly selected from the same distribution. The current introductory paper presents the results of the estimation experiment, and clarifies the descriptive value of several baseline models. The experimental results reveal the robustness of eight behavioral tendencies that were documented in previous studies of market entry games and individual decisions from experience. The best baseline model (I-SAW) assumes reliance on small samples of experiences, and strong inertia when the recent results are not surprising. The competition experiment will be run in May 2010 (after the completion of this introduction), but they will not be revealed until September. To participate in the competition, researchers are asked to E-mail the organizers models (implemented in computer programs) that read the incentive structure as input, and derive the predicted behavior as an output. The submitted models will be ranked based on their prediction error. The winners of the competition will be invited to publish a paper that describes their model.
Atila Abdulkadiroglu, Parag A. Pathak and Alvin E. Roth
The design of the New York City (NYC) High School match involved tradeoffs among efficiency, stability, and strategy-proofness that raise new theoretical questions. We analyze a model with indifferences—ties—in school preferences. Simulations with field data and the theory favor breaking indifferences the same way at every school—single tie breaking—in a student-proposing deferred acceptance mechanism. Any inefficiency associated with a realized tie breaking cannot be removed without harming student incentives. Finally, we empirically document the extent of potential efficiency loss associated with strategy-proofness and stability, and direct attention to some open questions.
Michael A. Rees, Jonathan E. Kopke, Ronald P. Pelletier, Dorry L. Segev, Matthew E. Rutter, Alfredo J. Fabrega, Jeffrey Rogers, Oleh G. Pankewycz, Janet Hiller, Alvin E. Roth, Tuomas Sandholm, Utku Unver and Robert A. Montgomery
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Rees, Michael A., Jonathan E. Kopke, Ronald P. Pelletier, Dorry L. Segev, Matthew E. Rutter, Alfredo J. Fabrega, Jeffrey Rogers, Oleh G. Pankewycz, Janet Hiller, Alvin E. Roth, Tuomas Sandholm, Utku Unver, and Robert A. Montgomery. "A Nonsimultaneous, Extended, Altruistic-Donor Chain."New England Journal of Medicine 360, no. 11 (March 12, 2009): 1096–1101.
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Christopher D. Harner, Anil S. Ranawat, Muriel Niederle, Alvin E. Roth, Peter J. Stern, Shepard R. Hurwitz, William Levine, G. Paul DeRosa and Serena S. Hu
Currently, approximately ninety percent of the six hundred twenty graduating orthopaedic residents are planning on entering a post-graduate fellowship. Since January of 2005, two of the largest fellowship match programs, Sports Medicine and Spine Surgery, were dissolved by the NRMP due to the gradual decline in participation, leaving approximately seventy percent of applicants in a non-match, decentralized system. This leaves Hand Surgery, Shoulder and Elbow, and Foot and Ankle as the only three orthopaedic subspecialties still in some match program. This has created an extremely complicated hiring environment for all residents. This paper focuses on the current state of fellowship employment and hiring in orthopaedic surgery, on the likely effects of reinstituting a match, and on how this might be accomplished. For this purpose, we present the results of surveys we conducted of fellowship directors and residents, discuss how the present market for orthopaedic surgery fellows resembles the market for medical residents prior to the introduction of the NRMP, and discuss how another fellowship market has successfully reinstituted a match after experiencing a comparable failure.
The deferred acceptance algorithm proposed by Gale and Shapley (1962) has had a profound influence on market design, both directly, by being adapted into practical matching mechanisms, and, indirectly, by raising new theoretical questions. Deferred acceptance algorithms are at the basis of a number of labor market clearinghouses around the world, and have recently been implemented in school choice systems in Boston and New York City. In addition, the study of markets that have failed in ways that can be fixed with centralized mechanisms has led to a deeper understanding of some of the tasks a marketplace needs to accomplish to perform well. In particular, marketplaces work well when they provide thickness to the market, help it deal with the congestion that thickness can bring, and make it safe for participants to act effectively on their preferences. Centralized clearinghouses organized around the deferred acceptance algorithm can have these properties, and this has sometimes allowed failed markets to be reorganized.
This essay discusses some things we have learned about markets, in the process of designing marketplaces to fix market failures. To work well, marketplaces have to provide thickness, i.e. they need to attract a large enough proportion of the potential participants in the market; they have to overcome the congestion that thickness can bring, by making it possible to consider enough alternative transactions to arrive at good ones; and they need to make it safe and sufficiently simple to participate in the market, as opposed to transacting outside of the market, or having to engage in costly and risky strategic behavior. I'll draw on recent examples of market design ranging from labor markets for doctors and new economists, to kidney exchange, and school choice in New York City and Boston.
Traditionally, markets have been viewed as simply the confluence of supply and demand. But to function properly, they must be able to attract a sufficient number of buyers and sellers, induce participants to make their preferences clear, and overcome congestion by providing both enough time to make choices and a speedy means of registering them. Solutions to these challenges are the province of market design—a blend of game theory and experimental economics. Roth, a professor of both business and economics at Harvard, is a leading market designer. He and his colleagues have rescued failing markets by, for example, designing labor clearinghouses through which U.S. doctors get their first jobs and auctions through which the Federal Communications Commission sells licenses for parts of the radio broadcast spectrum. They have also created market-like allocation procedures that involve neither prices nor an exchange of money; these include systems for assigning children to schools in Boston and New York and for facilitating exchanges of kidneys. Computers enable the design of "smart markets" that combine the inputs of users in complex ways: In kidney exchange, they run through every possible match of donors and recipients to arrange the greatest possible number of transplants. In the future, computers may make it possible to auction bundled goods, such as airport takeoff and landing slots. As online markets—like those for jobs and dating—proliferate, a growing understanding of markets in general will provide virtually limitless opportunities for market design.
Patients needing kidney transplants may have donors who cannot donate to them because of blood or tissue incompatibility. Incompatible patient-donor pairs can exchange donor kidneys with other pairs only when there is a "double coincidence of wants." Developing infrastructure to perform 3-way as well as 2-way exchanges will have a substantial effect on the number of transplants that can be arranged. Larger than 3-way exchanges have less impact on efficiency. In a general model of type-compatible exchanges, the size of the largest exchanges required to achieve efficiency equals the number of types.
Roth, A. E., Tayfun Sonmez, and M. Utku Unver. "Pairwise Kidney Exchange." Journal of Economic Theory 125, no. 2 (December 2005): 151–188.
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Holt, Charles A., and Alvin E. Roth. "The Nash Equilibrium: A Perspective."Proceedings of the National Academy of Sciences of the United States of America 101, no. 12 (March 23, 2004): 3999–4002.
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Roth, A. E., and M. Sotomayor. "Stable Outcomes in Discrete and Continuous Models of Two-Sided Matching: A Unified Treatment." Revista de econometria 16, no. 2 (November 1996): 1–24.
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Roth, A. E. "Further Thoughts on the Power of Alternatives: An Example from Labor-Management Negotiations in Major League Baseball." Negotiation Journal 1, no. 4 (October 1985): 359–362.
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Roth, Alvin E. "In 100 Years." Chap. 7 in In 100 Years: Leading Economists Predict the Future, edited by Ignacio Palacios-Huerta, 109–119. MIT Press, 2013.
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The question that is the title of this essay already suggests that experimental economics has at least reached a sufficient state of maturity that we can try to take stock of its progress and consider how that progress matches the anticipations we may have had for the field several decades ago, when it and we were younger. So it will help to begin by reconstructing what some of those anticipations were.
The deferred acceptance algorithm proposed by Gale and Shapley (1962) has had a profound influence on market design, both directly, by being adapted into practical matching mechanisms, and indirectly, by raising new theoretical questions. Deferred acceptance algorithms are at the basis of a number of labor market clearinghouses around the world and have recently been implemented in school choice systems in Boston and New York City. In addition, the study of markets that have failed in ways that can be fixed with centralized mechanisms has led to a deeper understanding of some of the tasks a marketplace needs to accomplish to perform well. In particular, marketplaces work well when they provide thickness to the market, help it deal with the congestion that thickness can bring, and make it safe for participants to act effectively on their preferences. Centralized clearinghouses organized around the deferred acceptance algorithm can have these properties, and this has sometimes allowed failed markets to be reorganized.
Roth, Alvin E. "Deferred Acceptance Algorithms: History, Theory, Practice." In Better Living through Economics, edited by John J. Siegfried, 206–222. Harvard University Press, 2010.
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New gastroenterologists participated in a labor market clearinghouse (a "match") from 1986 through the late 1990s, after which the match was abandoned. This provides an opportunity to study the effects of a match by observing the differences in the outcomes and organization of the market when a match was operating and when it was not. After the GI match ended, the market unraveled. Contracts were signed earlier each year, at diffuse times, often with exploding offers. The market became less national, more local. This allows us to discern the effect of the clearinghouse: it coordinated the timing of the market in a way that increased its thickness and scope. The clearinghouse does not seem to have had an effect on wages. As this became known among gastroenterologists, an opportunity arose to reorganize the market to once again use a centralized clearinghouse. However it proved necessary to adopt policies that would allow employers to safely delay hiring and coordinate on using the clearinghouse. The market for gastroenterologists provides a case study of market failures, the way a centralized clearinghouse can fix them, and the effects on market outcomes. In the conclusion we discuss aspects of the experience of the gastroenterology labor market that seem to generalize fairly widely.
Niederle, Muriel, and Alvin E. Roth. "The Effects of a Central Clearinghouse on Job Placement, Wages, and Hiring Practices." In Studies of Labor Market Intermediation, edited by David H. Autor, 273–306. University of Chicago Press, 2009.
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Matching is the part of economics concerned with who transacts with whom and how. Models of matching, starting with the Gale-Shapley deferred acceptance algorithm, have been particularly useful in studying labour markets and in helping design clearinghouses to fix market failures. Studying how markets fail also gives us insight into how market places work well. They need to provide a thick, uncongested market in which it is safe to participate. Clearinghouses that do this have been designed for many entry-level professional labor markets, for the assignment of children to public schools, and for exchange of live-donor kidneys for transplantation if available.
Niederle, Muriel, Alvin E. Roth, and Tayfun Sonmez. "Matching and Market Design." In The New Palgrave Dictionary of Economics. 2nd ed. Edited by Steven Derlauf and Larry Blume. Hampshire, U.K.: Palgrave Macmillan, 2008.
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Murnighan, J. Keith, and Alvin E. Roth. "Ancient History of Experimental Economics and Social Psychology: Reminiscences and Analysis of a Fruitful Collaboration." In Social Psychology and Economics, edited by David de Cremer, J. Keith Murnighan, and Marcel Zeelenberg, 321–333. Mahwah, NJ: Lawrence Erlbaum Associates, 2006.
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Roth, Alvin E. "Matching and Allocation in Medicine and Health Care." In Building a Better Delivery System: A New Engineering/Health Care Partnership, edited by P. Reid, W. Compton, J. Grossman, and G. Fanjiang, 237–239. Washington, D.C.: National Academies Press, 2005.
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Roth, A. E. "Game Theory as a Tool for Market Design." In Game Practice: Contributions from Applied Game Theory, edited by Fioravante Patrone, Ignacio Garcia-Jurado, and Stef Tijs, 7–18. Kluwer Academic Publishers, 2000.
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Erev, Ido, and A. E. Roth. "On the Role of Reinforcement Learning in Experimental Games: The Cognitive Game Theory Approach." In Games and Human Behavior: Essays in Honor of Amnon Rapoport, edited by D. Budescu, I. Erev, and R. Zwick, 53–77. Lawrence Erlbaum Associates, 1999.
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Roth, A. E. "Adaptive Behavior and Strategic Rationality: Evidence from the Laboratory and the Field." In The Rational Foundations of Economic Behavior: Proceedings of the IEA Conference, edited by K. Arrow, E. Colombatto, M. Perlman, and C. Schmidt, 255–273. Macmillan Publishers, 1996.
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Roth, A. E. "Bargaining Experiments." In Handbook of Experimental Economics, edited by John Kagel and Alvin E. Roth, 253–348. Princeton University Press, 1995.
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Roth, A. E., and M. Sotomayor. "Two Sided Matching." In Handbook of Game Theory with Economic Applications, edited by Robert Aumann and Sergiu Hart, 485–541. Elsevier/North-Holland, 1992.
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Roth, A. E. "An Economic Approach to the Study of Bargaining." In Handbook of Negotiation Research. Vol. 3, edited by M. H. Bazerman, R. J. Lewicki, and B. H. Sheppard, 35–67. Research on Negotiation in Organizations. JAI Press, 1991.
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Roth, A. E. "Two-Sided Matching Markets: An Overview of Some Theory and Empirical Evidence." In Game Theory and Applications, edited by T. Ichiishi, A. Neyman, and Y. Tauman, 232–251. San Diego: Academic Press, 1990.
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Roth, A. E. "Bargaining Phenomena and Bargaining Theory." In Laboratory Experiments in Economics: Six Points of View, edited by A. E. Roth, 14–41. Cambridge University Press, 1987.
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Roth, A. E. "Laboratory Experimentation in Economics, and Its Relation to Economic Theory." In Scientific Inquiry in Philosophical Perspective, edited by Nicholas Rescher, 147–167. Lanham: University Press of America, Inc., 1987.
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Roth, A. E. "Stable Coalition Formation: Aspects of a Dynamic Theory." In Coalitions and Collective Action, edited by M. Holler, 228–234. Wuerzberg: Physica-Verlag, 1984.
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Chapter
| Aspiration Levels in Bargaining and Economic Decision Making: Proceedings of the Third Conference on Experimental Economics, Winzenhohl, Germany
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1983
Roth, A. E., and J. K. Murnighan. "Information and Aspirations in Two Person Bargaining." In Aspiration Levels in Bargaining and Economic Decision Making: Proceedings, Winzenhohl, FRG, edited by R. Tietz. Springer-Verlag, 1983.
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Kihlstrom, R., A. E. Roth, and D. Schmeidler. "Risk Aversion and Solutions to Nash's Bargaining Problem." In Game Theory and Mathematical Economics, edited by O. Moeschlin and D. Pallaschke, 65–71. Amsterdam: North-Holland Publishing Company, 1981.
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Roth, A. E. "The Nash Solution as a Model of Rational Bargaining." In Extremal Methods and Systems Analysis, edited by A. V. Fiacco and K.O. Kortanek, 306–311. Springer-Verlag, 1980.
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Roth, A. E. "Power and Position: The Utility of Playing a Simple Game." In Game Theory and Political Science, edited by P. C. Ordeshook. New York: New York University Press, 1978.
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Roth, A. E. "A Fixed Point Approach to Stability in Cooperative Games." In Fixed Points: Algorithms and Applications, edited by S. Karamardian, 165–180. Academic Press, 1977.
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Atila Abdulkadiroglu, Yeon-Koo Che, Parag A. Pathak, Alvin E. Roth and Oliver Tercieux
In 2012, New Orleans Recovery School District (RSD) became the first U.S. district to unify charter and traditional public school admissions in a single-offer assignment mechanism known as OneApp. The RSD also became the first district to use a mechanism based on Top Trading Cycles (TTC) in a real-life allocation problem. Since TTC was originally devised for settings in which agents have endowments, there is no formal rationale for TTC in school choice. In particular, TTC is a Pareto efficient and strategy-proof mechanism, but so are other mechanisms. We show that TTC is constrained-optimal in the following sense: TTC minimizes justified envy among all Pareto efficient and strategy-proof mechanisms when each school has one seat. When schools have more than one seat, there are multiple possible implementations of TTC. Data from New Orleans and Boston indicate that there is little difference across these versions of TTC but significantly less justified envy compared to a serial dictatorship.
This paper examines non-price competition among colleges to attract highly qualified students, exploiting the South Korean setting where the national government sets rules governing applications. We identify some basic facts about the behavior of colleges before and after a 1994 policy change that changed the timing of the national college entrance exam and introduced early admissions, and propose a game-theoretic model that matches those facts. When applications reveal information about students that is of common interest to all colleges, lower-ranked colleges can gain in competition with higher-ranked colleges by limiting the number of possible applications.
Over 10,000 people in the U.S. die each year while waiting for an organ. Attempts to increase organ transplantation have focused on changing the registration question from an opt-in frame to an active choice frame. We analyze this change in California and show it decreased registration rates. Similarly, a "field in the lab" experiment run on actual organ donor registration decisions finds no increase in registrations resulting from an active choice frame. In addition, individuals are more likely to support donating the organs of a deceased who did not opt-in than one who said "no" in an active choice frame.
Itai Ashlagi, David Gamarnik, Michael A. Rees and Alvin E. Roth
It has been previously shown that for sufficiently large pools of patient-donor pairs, (almost) efficient kidney exchange can be achieved by using at most 3-way cycles, i.e., by using cycles among no more than 3 patient-donor pairs. However, as kidney exchange has grown in practice, cycles among n>3 pairs have proved useful, and long chains initiated by non-directed, altruistic donors have proven to be very effective. We explore why this is the case, both empirically and theoretically. We provide an analytical model of exchange when there are many highly sensitized patients and show that large cycles of exchange or long chains can significantly increase efficiency when the opportunities for exchange are sparse. As very large cycles of exchange cannot be used in practice, long non-simultaneous chains initiated by non-directed donors significantly increase efficiency in patient pools of the size and composition that presently exist. Most importantly, long chains benefit highly sensitized patients without harming low-sensitized patients.
As multi-hospital kidney exchange clearinghouses have grown, the set of players has grown from patients and surgeons to include hospitals. Hospitals have the option of enrolling only their hard-to-match patient-donor pairs, while conducting easily arranged exchanges internally. This behavior has already started to be observed. We show that the cost of making it individually rational for hospitals to participate fully is low in almost every large exchange pool (although the worst-case cost is very high), while the cost of failing to guarantee individually rational allocations could be large, in terms of lost transplants. We also identify an incentive compatible mechanism.
This paper describes the unraveling of transaction dates in several markets, including the labor markets for new lawyers hired by large law firms and for gastroenterology fellows, and the market for post-season college football bowls. Together these will illustrate that unraveling can occur in markets with competitive prices, that it can result in substantial inefficiencies, and that marketplace institutions play a role in restoring efficiency. I'll conclude with open questions about the role of marketplace institutions and the timing of transactions.
Markets sometimes unravel, with offers becoming inefficiently early. Often this is attributed to competition arising from an imbalance of demand and supply, typically excess demand for workers. However this presents a puzzle, since unraveling can only occur when firms are willing to make early offers and workers are willing to accept them. We present a model and experiment in which workers' quality becomes known only in the late part of the market. However, in equilibrium, matching can occur (inefficiently) early only when there is comparable demand and supply: a surplus of applicants, but a shortage of high quality applicants.
Peter A. Coles, John Cawley, Phillip B. Levine, Muriel Niederle, Alvin E. Roth and John J. Siegfried
This paper provides an overview of the market for new Ph.D. economists. It describes the role of the American Economic Association (AEA) in the market and focuses in particular on two mechanisms adopted in recent years at the suggestion of our committee. First, job market applicants now have a signaling service to send an expression of special interest to up to two employers prior to interviews at the January Allied Social Science Associations (ASSA) meetings. Second, the AEA now invites candidates who are still on the market, and employers whose positions are still vacant, to participate in a web-based "scramble" to reduce search costs and thicken the late part of the job market. We present statistics on the activity in these market mechanisms and present survey evidence that both mechanisms have facilitated matches. The paper concludes by discussing the emergence of platforms for transmitting job market information.
Markets sometimes unravel, with offers becoming inefficiently early. Often this is attributed to competition arising from an imbalance of demand and supply, typically excess demand for workers. However this presents a puzzle, since unraveling can only occur when firms are willing to make early offers and workers are willing to accept them. We present a model and experiment in which workers' quality becomes known only in the late part of the market. However, in equilibrium, matching can occur (inefficiently) early only when there is comparable demand and supply: a surplus of applicants, but a shortage of high quality applicants.
New gastroenterologists participated in a labor market clearinghouse (a "match") from 1986 through the late 1990's, after which the match was abandoned. This provides an opportunity to study the effects of a match, by observing the differences in the outcomes and organization of the market when a match was operating, and when it was not. After the GI match ended, programs hired fellows earlier each year, eventually almost a year earlier than when the match was operating. It became customary for GI program directors to make very short offers, rarely exceeding two weeks and often much shorter. Consequently many potential fellows had to accept positions before they finished their planned interviews, and most programs experienced cancellations of interviews they had scheduled. Furthermore, without a match, many programs hired more local fellows, and fewer from other hospitals and cities than they did during the match. Wages, however, seem not to have been affected. To restart the match, we proposed a policy, subsequently adopted by the gastroenterology professional organizations, that even if applicants had accepted offers prior to the match, they could subsequently decline those offers and participate in the match. This made it safe for programs to delay hiring until the match, confident that programs that did not participate would not be able to "capture" the most desirable candidates beforehand. Consequently it appears that most programs waited for the match in an orderly way in 2006, when the GI match was reinstated. The market for gastroenterologists provides a case study of market failures, the way a centralized clearinghouse can fix them, and the effects on market outcomes. In the conclusion we discuss aspects of the experience of the gastroenterology labor market that seem to generalize fairly widely.
Atila Abdulkadiroglu, Parag A. Pathak, Alvin E. Roth and Tayfun Sonmez
Citation:
Abdulkadiroglu, Atila, Parag A. Pathak, Alvin E. Roth, and Tayfun Sonmez. "Changing the Boston School Choice Mechanism." NBER Working Paper Series, No. 11965, January 2006.
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Roth, A. E., and Ido Erev. "Modeling Repeated Play of the Prisoners' Dilemma with Reinforcement Learning over an Enriched Strategy Set." 2006. (Presented at the Dahlem Workshop on Bounded Rationality: The Adaptive Toolbox.)
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