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Marketplaces, Markets, and Market Design

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  • Alvin E. Roth

Abstract

Marketplaces are often small parts of large markets, and both markets and marketplaces come in many varieties. Market design seeks to understand what marketplaces must accomplish to enable different kinds of markets. Marketplaces can have varying degrees of success, and there can be marketplace failures. I'll discuss labor markets like the market for new economists, and also markets for new lawyers and doctors that have suffered from the unraveling of appointment dates to well before employment begins. Markets work best if they enjoy social support, but some markets are repugnant in the sense that some people think they should be banned, even though others want to participate in them. Laws banning such markets often contribute to the design of illegal black markets, and this raises new issues for market designers. I'll briefly discuss markets and black markets for narcotics, marijuana, sex, and surrogacy, and the design of markets for kidney transplants, in the face of widespread laws against (and broader repugnance for) compensating organ donors. I conclude with open questions and engineering challenges.

Suggested Citation

  • Alvin E. Roth, 2018. "Marketplaces, Markets, and Market Design," American Economic Review, American Economic Association, vol. 108(7), pages 1609-1658, July.
    • Handle: RePEc:aea:aecrev:v:108:y:2018:i:7:p:1609-58
    Note: DOI: 10.1257/aer.108.7.1609
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    Citations

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    Cited by:

    1. Janet M. Currie & W. Bentley MacLeod, 2020. "Understanding Doctor Decision Making: The Case of Depression Treatment," Econometrica, Econometric Society, vol. 88(3), pages 847-878, May.
    2. Julio Montecinos & Mustapha Ouhimmou & Satyaveer Chauhan & Marc Paquet & Ali Gharbi, 2021. "Transport carriers’ cooperation on the last-mile delivery in urban areas," Transportation, Springer, vol. 48(5), pages 2401-2431, October.
    3. Bruno Jullien & Alessandro Pavan & Marc Rysman, 2021. "Two-sided markets, pricing, and network effects," Post-Print hal-03828345, HAL.
    4. Paul Koster, 2023. "Counting what counts: Moral considerations and market surplus," Tinbergen Institute Discussion Papers 23-008/VIII, Tinbergen Institute.
    5. Marco LiCalzi, 2022. "Bipartite choices," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 45(2), pages 551-568, December.
    6. Eric Budish & Judd B. Kessler, 2022. "Can Market Participants Report Their Preferences Accurately (Enough)?," Management Science, INFORMS, vol. 68(2), pages 1107-1130, February.
    7. Parakhonyak, Alexey & Popov, Sergey V, 2019. "Same-Sex Marriage, The Great Equalizer," Cardiff Economics Working Papers E2019/2, Cardiff University, Cardiff Business School, Economics Section.
    8. Janet M. Currie & W. Bentley MacLeod, 2018. "Understanding Doctor Decision Making: The Case of Depression," NBER Working Papers 24955, National Bureau of Economic Research, Inc.
    9. Itai Ashlagi & Mark Braverman & Geng Zhao, 2023. "Welfare Distribution in Two-sided Random Matching Markets," Papers 2302.08599, arXiv.org.
    10. Itai Ashlagi & Alvin E. Roth, 2021. "Kidney Exchange: An Operations Perspective," Management Science, INFORMS, vol. 67(9), pages 5455-5478, September.
    11. Hans Kjellberg, 2021. "Market expertise at work: introducing Alvin E. Roth and Michel Callon," AMS Review, Springer;Academy of Marketing Science, vol. 11(3), pages 216-218, December.
    12. Sun, Hao & Wang, Hai & Wan, Zhixi, 2019. "Model and analysis of labor supply for ride-sharing platforms in the presence of sample self-selection and endogeneity," Transportation Research Part B: Methodological, Elsevier, vol. 125(C), pages 76-93.
    13. Tinglong Dai & Jing-Sheng Song, 2021. "Transforming COVID-19 vaccines into vaccination," Health Care Management Science, Springer, vol. 24(3), pages 455-459, September.
    14. Atila Abdulkadiroglu & Tommy Andersson, 2022. "School Choice," NBER Working Papers 29822, National Bureau of Economic Research, Inc.
    15. Ackfeld, Viola & Ockenfels, Axel, 2021. "Do people intervene to make others behave prosocially?," Games and Economic Behavior, Elsevier, vol. 128(C), pages 58-72.
    16. Horton, John J. & Johari, Ramesh & Kircher, Philipp, 2021. "Cheap Talk Messages for Market Design: Theory and Evidence from a Labor Market with Directed," LIDAM Discussion Papers CORE 2021033, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    17. Ce Liu & Ziwei Wang & Hanzhe Zhang, 2023. "Self-Enforced Job Matching," Papers 2308.13899, arXiv.org.
    18. Adamson, Jordan, 2021. "Agglomeration and the extent of the market: Theory and experiment on spatially coordinated exchange," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 838-850.
    19. Johannes Baumler & Martin Bullinger & Stefan Kober & Donghao Zhu, 2022. "Superiority of Instantaneous Decisions in Thin Dynamic Matching Markets," Papers 2206.10287, arXiv.org, revised Jun 2023.
    20. Bauer, Johannes M., 2022. "Toward new guardrails for the information society," Telecommunications Policy, Elsevier, vol. 46(5).
    21. Kim, Jaehong & Li, Mengling & Xu, Menghan, 2021. "Organ donation with vouchers," Journal of Economic Theory, Elsevier, vol. 191(C).
    22. Suresh P. Sethi & Sushil Gupta & Vipin K. Agrawal & Vijay K. Agrawal, 2022. "Nobel laureates’ contributions to and impacts on operations management," Production and Operations Management, Production and Operations Management Society, vol. 31(12), pages 4283-4303, December.
    23. Martin Bichler, 2020. "Comments on: Shared resources in collaborative vehicle routing," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 28(1), pages 21-24, April.
    24. Agust'in G. Bonifacio & Elena Inarra & Pablo Neme, 2020. "Stable decompositions of coalition formation games," Papers 2009.11689, arXiv.org, revised Dec 2021.
    25. Avidit Acharya & Kirk Bansak & Jens Hainmueller, 2019. "Combining Outcome-Based and Preference-Based Matching: A Constrained Priority Mechanism," Papers 1902.07355, arXiv.org, revised Aug 2020.

    More about this item

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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