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A Stanford University visiting professor was awarded the Nobel Prize in economics Monday, Oct. 15, for his work on market design.

Alvin Roth, a professor of economics and business administration at Harvard University, who will join Stanford's permanent faculty in 2013, shares the prize with Lloyd Shapley, professor emeritus at UCLA.

The Royal Swedish Academy of Sciences cited the professors' contributions to "the theory of stable allocations and the practice of market design" in naming them for the $1.2 million prize.

Reached at home shortly after the 3:30 a.m. call from Sweden, Roth said he felt "good, the same as anyone who wins the Nobel Prize.

"But at least in my case this represents a lot of people's work," he said.

"It's good for the field of market design."

Roth has brought game theory approaches to bear on real-world, complex problems, particularly in the area of matching theory.

One of his projects improved the matching process used by the New York schools system to match high schools with prospective students, raising participation by eighth-graders by 30 percent.

Roth's design of the New England Program for Kidney Exchange represents another large-scale, practical application of matching theory. In many cases, a healthy person would like to donate a kidney to a friend or loved one, but is medically incompatible.

With paired kidney donation, however, that incompatible donor-recipient pair can trade their kidney to another mutually incompatible pair, while obtaining the kidney they need in return. The practice greatly increases the number of compatible kidneys available to a patient.

Roth dropped out of his Queens, N.Y., high school in his junior year. After taking weekend classes at Columbia University, he became a full-time Columbia student, earning an engineering degree before receiving master's and doctoral degrees from Stanford in operations research in 1973 and 1974, respectively.

In addition to academic publications, Roth is the author of several standard texts in bargaining theory, experimental economics and game theory.

He has received numerous awards for teaching and research, including Alfred P. Sloan and Guggenheim fellowships, and is a member of the American Academy of Arts and Sciences and the National Bureau of Economic Research.

— Palo Alto Weekly staff

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