(2010-07-22) Roth Game Theory Systems Design

Alvin Roth uses the mathematical tools of Game Theory to find fixes for big, broken systems. Over the last 20 years he has pioneered a branch of economics known as Market Design (marketplace). Among Roth's accomplishments: designing networks for kidney donations and creating elegant systems that enable huge urban school districts to optimally place multitudes of students among hundreds of schools.

It's too bad that the system did not exist when Roth went to high school in the late 1960s in Queens, N.Y. He attended nearby Van Buren High School, where he dropped out in his junior year. Sheepish when asked to explain why--Roth's parents were both high school teachers, adding to the irony--he concedes that his decision came down to boredom. "I think I was understimulated," he says. (Educating Kids)

He was admitted and earned a degree in engineering and then a doctorate from Stanford, in a branch of engineering called Operations Research, which uses mathematics to organize systems with lots of moving parts. "I've always been interested in using mathematics to make the world work better," says Roth. Roth's specialty within operations research: Game Theory, which analyzes situations in which the outcome depends on the actions of multiple people. By the 1980s game theory was considered a strain of Economics. (That's a mistake, since OR can actually create value for humanity... like Roth has.)