An Invitation to Market Design

Scott Kominers, Alexander Teytelboym and Vincent Crawford

No 2017-069, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: Market design seeks to translate economic theory and analysis into practical solutions to real-world problems. By redesigning both the rules that guide market transactions and the infrastructure that enables those transactions to take place, market designers can address a broad range of market failures. In this paper, we illustrate the process and power of market design through three examples: the design of medical residency matching programs; a scrip system to allocate food donations to food banks; and the recent “Incentive Auction†that reallocated wireless spectrum from television broadcasters to telecoms. Our lead examples show how effective market design can encourage participation, reduce gaming, and aggregate information, in order to improve liquidity, efficiency, and equity in markets. We also discuss a number of fruitful applications of market design in other areas of economic and public policy.

Keywords: matching; auctions; trading; scrip; liquidity; Efficiency; equity; allocation rules; marketplaces; market design (search for similar items in EconPapers)
JEL-codes: C78 D02 D44 D47 D51 D61 D62 D63 D71 D82 (search for similar items in EconPapers)
Date: 2017-09
New Economics Papers: this item is included in nep-des and nep-gth
Note: MIP
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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http://humcap.uchicago.edu/RePEc/hka/wpaper/Komine ... on-market-design.pdf First version, September 4, 2017 (application/pdf)

Related works:
Journal Article: An invitation to market design (2017)
Working Paper: An invitation to market design (2017)
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