Gale and Shapley '62, a long-standing appreciation

While preparing for a talk I gave in England, I recently reread my 1990 paper: Roth, A.E., "New Physicians: A Natural Experiment in Market Organization," Science, 250, 1990, 1524-1528.

I hadn't recalled it, but this was the last paragraph of that paper:

"It is noteworthy that the simple idea of pairwise stability formulated by Gale and Shapley (5) has turned out to have so much empirical power. I think their paper has thus proved to be the kind of theoretical work that merits the highest scientific recognition."

Dental residency match results

Elliott Peranson, who runs National Matching Services in Toronto, apparently has fond memories of our trip to Stockholm: here is the news release about the results of the recent Postdoctoral Dental Matching Program

Assignment of Dental Residency Positions Made with Nobel Prize Algorithm

The results released today by National Matching Services for the Postdoctoral Dental Matching Program placed 1721 applicants into postdoctoral dental residency positions. The Matching Program uses a mathematical algorithm to create a fair, transparent and efficient recruitment process.

"The results of the 29th annual Postdoctoral Dental Matching Program (the “Match”) were released today by National Matching Services Inc. (NMS). The Match places applicants into positions for the first year of accredited postdoctoral training in Oral and Maxillofacial Surgery, Orthodontics, Pediatric Dentistry, General Practice Residency, Advanced Education in General Dentistry and Dental Anesthesiology.

According to the data from NMS, 1721 of 1974 positions offered were filled in the Match, which is the highest fill rate in any of the last 15 years. The number of applicants participating in the Match increased by 3.3% to its highest level in Match history. According to Elliott Peranson, President of NMS, “the high level of applicant participation is being driven by the interest of current graduates of U.S. Dental schools to pursue advanced education.”

The Match uses the Roth-Peranson algorithm, which aligns the preferences of applicants and residency programs to generate an optimal result. The algorithm was designed by NMS and Stanford professor Alvin Roth, and was recognized in the awarding of Roth’s 2012 Nobel Prize in Economic Studies.

The algorithm acts as a central clearinghouse for all offers, acceptances and rejections. By centralizing the offer-acceptance process, both applicants and recruiters can be confident that they will receive the most preferred placement available to them. It creates a fair and efficient recruitment process that eliminates many of the common adverse situations found in competitive recruitment environments, like applicants hoarding offers and recruiters overfilling positions.

“We are very proud to be the trusted provider of matching services to the dental profession,” said Elliott Peranson. “By working closely with the sponsoring organizations of the Match, we have developed a Matching Program that leverages the power of the Roth-Peranson algorithm while fitting the unique needs of the postdoctoral dental residency recruitment environment.”

The Match to fill postdoctoral positions in dentistry has operated successfully since 1985 and has expanded to include six dental specialties. The Match is sponsored jointly by the American Association of Oral and Maxillofacial Surgeons, the Special Care Dentistry Association Council of Hospital Dentistry, the American Academy of Pediatric Dentistry, the American Association of Orthodontists, the American Society of Dentist Anesthesiologists and the American Student Dental Association. In addition, the Match has been endorsed by the American Dental Association Council on Dental Education and Licensure, the American Dental Education Association, and the Veterans Administration

About National Matching Services:

National Matching Services is the leading outsourced provider of matching services to professional organizations and industry associations. Since 1985, NMS has designed and implemented Matching Programs for competitive recruitment in a variety of industries, including health, education and law. NMS Matching Programs take the stress out of recruitment by providing tools for sponsoring organizations to oversee the recruitment process and giving applicants and recruiters confidence that they will obtain the best possible placement. National Matching Services is headquartered in Toronto, Ontario."

Cornes and Neto celebrate Gale and Shapley, and the practical value of good theory

Here's a paper that points out that there's nothing more practical--even for policy--than good theory, and that it might be hard to guess where that will come from.

I was struck not just by the title of the paper, but by the parenthetical comment in the first sentence of the abstract...

Is Policy Too Important to be Left to Empiricists? Lessons of the 2012 Nobel Prize in Economics
Richard Cornes and José A. Rodrigues-Neto

Abstract
Fifty years ago, a paper entitled ‘College Admissions and the Stability of Marriage’was published in a somewhat obscure journal, the American Mathematical Monthly (currently a ‘B’ journal, according to the Australian Business Deans Council). The research program and policy developments that have flowed from that abstract and apparently slight seven-page paper recently led to the award of  the 2012 Nobel Prize for Economics to one of its authors, Lloyd Shapley. (Shapley’s co-author, David Gale, died in 2008.) Shapley shared the Nobel Prize ‘for the theory of stable allocations and the practice of market design’ with US economist Alvin Roth, who has been responsible for much of the applied work that has built on Gale and Shapley’s insights. The history of the path leading from the abstract Gale/Shapley insights to the design of resource allocation mechanisms in 2012 is a fascinating and instructive one for many reasons. This article tries to give the reader an idea of what this literature is about, and of the many ways in which Matching Theory has led to real improvements in the design of operational resource-allocation mechanisms.
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The article makes some points about how funny sounding theory can turn into practical institutions that were also made in the recent Golden Goose awards (see this post and this one).