Lloyd Shapley

Lloyd Stowell Shapley was born on June 2, 1923, in Cambridge, Massachusetts. He was an American mathematician and economist known for his contributions to the fields of game theory and economic analysis. Over his career, Shapley developed several important concepts, including the Shapley value and the Gale-Shapley algorithm, both of which have had a significant impact on economics and social sciences.

In 1950, Lloyd Shapley introduced the concept of the Shapley Value, a solution concept in cooperative game theory. The Shapley Value assigns a value to each player in a multiplayer game that corresponds to their contribution to the total payoff. This concept has been widely applied in economics, political science, and other fields to understand cooperation and fair distribution of resources.

In 1962, along with David Gale, Lloyd Shapley published the Gale-Shapley algorithm, an influential algorithm in the field of matching theory. Also known as the deferred acceptance algorithm, it provides a solution to the stable marriage problem by enabling a stable matching between two equal-sized sets of elements. This work has had profound implications in various applications like matching medical students to hospitals and students to schools.

Lloyd Shapley and Martin Shubik's paper 'The Assignment Game' was published in 1981. It explored a model for determining optimal assignments of resources in a market context. The paper expanded on the idea of the Shapley value and investigated the connections between game theory and economics, particularly focusing on allocation of resources and prices, laying groundwork for later theoretical developments in market design and auction theory.

In 1988, Lloyd Shapley published an important work titled 'A Value for n-Person Games', in which he explored further developments of his seminal Shapley value. This publication helped solidify the foundational role the Shapley value played in the theory of cooperative games, expanding its usability to a broader class of economic and social scenarios by discussing extensions and adaptations of the concept.

On May 1, 2007, Lloyd Shapley received an honorary doctorate from the Warsaw School of Economics. This award recognized his profound contributions to the field of economic sciences, especially his groundbreaking work in game theory. His theories and research have been foundational, influencing countless studies and practical applications in economics and beyond.

In September 2011, Lloyd Shapley was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, commonly referred to as the Nobel Prize in Economics. He shared this honor with Alvin E. Roth for their work on the theory of stable allocations and the practice of market design. Shapley’s algorithmic and theoretical contributions were essential to this achievement, highlighting the societal benefits of mathematical structures in analyzing and resolving real-world issues.

Lloyd Shapley passed away on March 12, 2016, in Tucson, Arizona, marking the end of a remarkable life dedicated to mathematics and economics. Throughout his career, Shapley had a profound impact on game theory and economic analysis, influencing scholars around the globe. His contributions, such as the Shapley value and the Gale-Shapley algorithm, continue to have significant applications and are celebrated in mathematical and economic circles.