Markets define our world. But unless you are a highly trained economist and game theorist, understanding how we interact within them can be a challenge.
For example, take kidney transplants. There are 100,000 patients waiting for a kidney but only 17,000 transplants per year. What is the most efficient way to coordinate the transplant process? Considering the biological and logistical challenges of transporting organs across the country may seem insurmountable, and opportunity costs abound as emergency transports must be balanced with commercial travel.
Yet for those who study matchmaking and market design, such a challenge provides an opportunity. Kidney transplants can now be efficiently coordinated between four patients-donor pairs in four different cities. Schools with selective programs can now engage in matchmaking with students in a way that maximizes the preferences of both. Matchmaking in jobs and marriage has continued to improve.
What markets do you see operating in your life? To what extent should markets and matchmaking be regulated? And how should we influence the markets that comprise our world to determine who gets what - and why?
Alvin E. Roth, Professor of Economics at Stanford University, Professor Emeritus at Harvard University, and 2012 Nobel Laureate in Economic Sciences for his work in market design. He is author of the new book, "Who Gets What - And Why" (Houghton Mifflin Harcourt, 2015)