Preheat oven to 375°F. Cook butter and sage in small saucepan over medium-heat until butter simmers and is well flavored with sage, about 4 minutes.
Toss potatoes with 2 Tbsp sage butter in bowl. Sprinkle with salt and pepper. Transfer potatoes to baking sheet. Bake 20 minutes.
Toss shallots in same bowl with 1 tablespoon sage butter. Season with salt and pepper. Add shallots to baking sheet. Roast until potatoes and shallots are tender and golden, turning occasionally, about 35 minutes longer.
Transfer potatoes and shallots to large bowl. Add remaining sage butter; toss. Season with salt and pepper.
Adapted from Bon Appétit, November 1997