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Economists often look at markets as given, and try to make predictions about who will do what and what will happen in these markets Market design, by contrast, does not take markets as given; instead, it combines insights from economic and game theory together with common sense and lessons learned from empirical work and experimental analysis to aid in the design and implementation of actual markets In recent years the field has grown dramatically, partially because of the successful wave of spectrum auctions in the US and in Europe, which have been designed by a number of prominent economists, and partially because of the increase use of the Internet as the platform over which markets are designed and run There is now a large number of applications and a growing theoretical literature.
The Handbook of Market Design brings together the latest research from leading experts to provide a comprehensive description of applied market design over the last two decades In particular, it surveys matching markets: environments where there is a need to match large two-sided populations to one another, such as medical residents and hospitals, law clerks and judges, or patients and kidney donors It also examines a number of applications related to electronic markets, e-commerce, and the effect of the Internet on competition between exchanges
Nir Vulkan, Associate Professor of Economics, Said Business School, University of Oxford,Alvin E. Roth, Professor of Economics, Stanford University and Nobel Laureate in Economics 2012,Zvika Neeman, Associate Professor, Berglas School of Economics, Tel Aviv University
Alvin E. Roth was awarded the Nobel Prize in Economics 2012 for his work on market design. He received his B.S. from Columbia University in 1971 and Ph.D. from Stanford University in 1974. He taught at the University of Illinois from 1974-82, at the University of Pittsburgh from 1982-98, at Harvard University from 1998-2012, and he now teaches at Stanford.
Nir Vulkan is an Economics Professor at the Said Business School and a Fellow of Worcester College, Oxford University. He has written many articles on market design and is author of 'The Economics of E- Commerce' (Princeton University Press, 2003). He has worked with many software and e-commerce companies designing markets mainly on the Internet, which are used by humans and software agents. His algorithms for automated trading have been used by hedge funds to trade futures in markets all over the world.
Zvika Neeman is a microeconomic and game theorist who specializes in mechanism design. He teaches at the Berglas School of Economics at Tel Aviv University. Prior to that, he held positions at Boston University and at the Hebrew University of Jerusalem.
Table of Contents
Introduction, Alvin E. Roth, Nir Vulkan, and Zvika Neeman Part I: General Principles 1. What Have We Learned From Market Design?, Alvin E. Roth 2. Not Up To Standard: Stress Testing Market Designs for Misbehavior, Gary Bolton 3. Using and Abusing Auction Theory, Paul Klemperer Part II: Cases Section II.A: Matching Markets 4. Market Design for Kidney Exchange, Tayfun Sonmez and Utku Unver 5. School Choice, Atila Abdulkadiroglu 6. Improving Efficiency in School Choice, Aytek Erdil and Haluk Ergin 7. Can the Job Market for Economists be Improved?, Sarbartha Bandyopadhyay, Fedor Iskhakov, Terence Johnson, Soohyung Lee, David McArthur, John Rust, Joel Watson, and John Watson 8. Designing Markets for Ideas, Joshua Gans and Scott Stern 9. Redesigning Microcredit, Ashok Rai and Tomas Sjostrom 10. The Design of Online Advertising Markets, Benjamin Edelman Section II.B: Auctions 11. The Product-Mix Auction: a New Auction Design for Differentiated Goods, Paul Klemperer 12. Optimal Incentives in Core-Selecting Auctions, Paul Milgrom and Robert W. Day 13. Auctioning Rough Diamonds: A Competitive Sales Process for BHP Billiton's Ekati Diamonds, Peter Cramton, Samuel Dinkin, and Robert Wilson Section II.C: E Commerce 14. Ending Rules in Internet Auctions: Design and Behavior, Axel Ockenfels and Alvin E. Roth 15. Designing Markets for Mixed Use of Humans and Automated Agents, Andrew Byde and Nir Vulkan 16. Very-Large-Scale Generalized Combinatorial Multi-Attribute Auctions: Lessons from Conducting $60 Billion of Sourcing, Tuomas Sandholm 17. Designing Automated Markets for Communication Bandwith, Nir Vulkan and Chris Priest Section II.D: Law Design 18. A Mechanism Design Approach to Legal Problems, Zvika Neeman and Alon Klement 19. Legislation with Endogenous Preferences, Aviad Heifetz, Ella Segev, and Eric Talley Part III: Experiments 20. Common-Value Auctions with Liquidity Needs: An Experimental Test of a Troubled Assets Reverse Auction, Lawrence M. Ausubel, Peter Cramton, Emel Filiz-Ozbay, Nathaniel Higgins, Erkut Ozbay, and Andrew Stocking 21. Information Disclosure in Auctions: An Experiment, Uri Gneezy and Martin Dufwenberg 22. Buyer Determined Procurement Auctions Experiments, Elena Katok 23. The Inefficiency of Splitting the Bill, Uri Gneezy and Ernan Haruvey Part IV: Competing Designs 24. Competing Mechanisms, Michael Peters 25. Three Case Studies of Competing Designs in Financial Markets, Zvika Neeman and Nir Vulkan