Monday, July 26, 2010

Al Roth

An interesting discussion of Al Roth in Forbes magazine (via Greg Mankiw). Roth's IDEAS page is linked here. Roth has been pioneering the application of game theory to designing real-world markets in areas such as mathing students to high-schools, matching donors to those needing a transplant and placing doctors in hospitals. A 2008 EJ paper of his is linked below.

What Have We Learned from Market Design?

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AlvinE. Roth
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This article 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 behaviour. I will draw on recent examples of market design ranging from labour markets for doctors and new economists, to kidney exchange, and school choice in New York City and Boston. Copyright © 2008 The Author(s).

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