Working Paper: NBER ID: w13530
Authors: Alvin E. Roth
Abstract: This essay discusses some things we have learned about markets, in the process of designing marketplaces to fix market failures. To work well, marketplaces have to provide thickness, i.e. they need to attract a large enough proportion of the potential participants in the market; they have to overcome the congestion that thickness can bring, by making it possible to consider enough alternative transactions to arrive at good ones; and they need to make it safe and sufficiently simple to participate in the market, as opposed to transacting outside of the market, or having to engage in costly and risky strategic behavior. I'll draw on recent examples of market design ranging from labor markets for doctors and new economists, to kidney exchange, and school choice in New York City and Boston.
Keywords: No keywords provided
JEL Codes: A11; C78; D02; D4; L1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increasing market thickness (D40) | Improved transaction outcomes (L14) |
| Managing congestion (L91) | Enhanced market performance (G14) |
| Making participation safe (C90) | Better market outcomes (G19) |
| Addressing repugnance in transactions (L14) | Successful market outcomes (G10) |