Opportunity for market design knocks. Alvin Roth has written a book about it with the title: Who gets what and why, the hidden world of matchmaking and market Design.
My 10 take-aways of the book are:
- Markets are human artifcasts. We can change a market and we can invent one.
- Market Design is a Team Sport.
- Market design helps solve problems that existing marketplaces haven’t been able to solve naturally.
- Design is a noun as well as a verb; even markets whose rules have evolved slowly have a design, although no one may have consciously designed them.
- Internet marketplaces have very precise rules, because when a market is on the web, its rules have to be formalized in software.
- When we speak about free market, we shouldn’t be thinking of a free-for-all, but rather a market with well designed rules that make it work well.
- One thing we’ll see is that the “magic” of the market doesn’t happen by magic: many marketsplaces fail to work well because of poor design. They may fail to make the market thick or safe, or to deal with congestion, and so there’s an opportunity to help them work better.
- Succesful designs depend greatly on the details of the market, including the culture and psychology of the participants.
- Markets can be dramatically improved when their design encourages people to communicate essential information they might otherwise have kept to themselves.
- In matching markets you have to choose and have to be choosen.
Market Design is a Team SportAlvin Roth
A jobmarket is (like most markets) a matching market, a market where you have to be choosen. Get your organisational pupose clear. It matters.