Sometimes, when I tell people that I play games – and I like to play games – I can see the disapproval bursting out from behind their polite facade. Sometimes, there will be a follow up question and answer session. The questions are things like ‘Really?‘ and ‘You mean other people play games?‘ and ‘Adults?‘ The answers vary depending on my mood and patience batteries.
I don’t care what people think; I have always known that playing games brings so many advantages and enjoyment, that it was non players that were losing out. However, if I had to measure how far playing games could take you in life, it would be guesswork. But every so often, along comes a reminder of the glory of games. Like the announcement of the winners of the 2012 Nobel Prize for economics: Alvin Roth and Lloyd Shapley.
From the BBC coverage:
The Royal Swedish Academy of Sciences cited the US academics for their work on the “theory of stable allocations and practice of market design”.
The work is concerned with the best possible way to allocate resources, such as in school admissions or organs to patients who need transplants.
Mr Roth is a professor at Harvard and Mr Shapley teaches at the University of California in Los Angeles.
The committee said their work was a form of economic engineering, designing markets for situations where traditional market mechanisms based on price are not applicable or do not work well.
This is gaming territory.
This original work developed into the Gale-Shapley algorithm, which aims to ensure “stable matching” or the best possible outcome for both sides. “An allocation where no individuals perceive any gains from further trade is called stable,” the Academy explained.
This is a key pillar in co-operative game theory, an area of mathematical economics that seeks to determine how rational individuals choose to co-operate.
As Stephanie Flanders, BBC Economics Editor says:
“In the past 50 years, game theorists – and micro-economics in general – have genuinely made the world a better place.”
Well done to Alvin Roth and Lloyd Shapley.
See games? They can take you places!