Author Alvin E. Roth
Alvin E. Roth won the Nobel prize in Economics (2012) "for the theory of stable allocations and the practice of market design"
Chapter I
1. Economics is about the efficient allocation of scare resource, and about the making resources less scare
2. Matching in economist-speak for how we get many things we choose in life that also must choose us.
3. Matches are found in marketplaces. Marketplaces help shape and satisfy desires, bringing together buyers and sellers and those looking to hire, and even sometime those looking for love
4. A market involves matching whenever price isn't the only determinant of who gets what. Some matches don't use money at all - e.g. Kidney transplants
5. The new economics of market design bring science to matchmaking and to markets generally. Market design helps solve problems that existing marketplaces haven't been able to solve naturally
6. 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
7. Thick - markets that have lot of participants
8. Congestion - is a problem that marketplaces can face once they've achieved thickness. It's the economic equivalent of a traffic jam, a curse of success.
9. Decisions that depend on what other are doing called strategic decisions and are the concern of economics called game theory.
10. Repugnant transactions - transactions that some people don't want others to engage in - don't have to involve money.
11. Because economics touches on just about everything, economists have an opportunity to learn something from just about everyone.
Chapter II
1. Turning a market into a commodity market helps make it really thick, because any buyer can buy from any seller, and any seller can sell to any buyer
2. Simplicity is a competitive tool that sometimes allows new market platforms to displace old ones.
Chapter III
1. Kidney donation - willing donor isn't enough. Blood types have to be compatible
2. Kidneys and cadavers may seem out of place in a discussion about markets - but the story of of creation of kidney exchanges touches every subject about how market design has to solve problems related to incentives, thickness, congestion and timing.
3. Markets and marketplaces come in many forms, some of which don't conform to conventional notions of markets, and some in which money may play little or no role.
4. Kidneys must be exchanged without money changing hands, in a kind of barter transaction - double coincidence of wants. NO exchange could happen without a double coincidence
5. Game theory - study of strategic interactions. Game theorists try to put themselves in the shoes of market participants to understand how they might use the strategies that are available to them.
6. "I gravitated toward game theory because I cared about how people made choices and organized themselves."
7. Thomas Strazl performed the first successful liver transplant
8. Market design for kidney exchange is still about making the market thick, uncongested, safe and simple and efficient. In the case of kidney exchange, making the market thick involved assembling databases of patient-donor pairs.
9. Behavioral economists have upended traditional economic assumptions by noticing that people aren't relentlessly calculating and purely self-interested, and market designers will miss good opportunities if they forget that.
10. The general lesson - Not only do marketplaces have to solve the problems of creating a thick market, managing congestion, and ensuring that participating is safe and simple, but they also have to keep solving and re-solving these problems as markets evolve.
Chapter IV
1. Dangers associates with early transactions: they can come well before important information is available. And that can mean bad matches made and good ones missed.
2. Exploding offers - take-it-or-leave-it offers of such short duration that they didnt leave enough time for any ither firm to jump in or compete for the same candidate.
3. Exploding offers are common in unraveled markets. These offers are both early and short-lived
4. Exploding offers make markets thin, as well as early, and so participants are deprived of information about the quality of matches and what kind of matches the market might offer
5. Unraveling is a failure of self-control
Chapter V
1. Speed can make a market thrive or tear it apart
2. Even in the ultra fast world of finance (CME or NYSE), many milliseconds can pass with no trades taking place at all
3. Electronic order book - important element of the markets' current design is - first come, first served. Whoever trades first, gets the deal
4. One way financial markets provide thickness to ordinary trades is by giving professional trades the incentive to become liquidity providers
5.
Chapter VIII
Chapter XI
1. Repugnant transaction - is some people want to engage in it and other dont want them to
2. The kind of Repugnant transactions that are interesting are those where it isnt easy to specify why some people object to them
3. Markets, like languages, come in many varities. Commodity markets are impersonal but matching markets are deeply personal
3. Makets are human artificats not human phenomenon
Chapter XII
Alvin E. Roth won the Nobel prize in Economics (2012) "for the theory of stable allocations and the practice of market design"
Chapter I
1. Economics is about the efficient allocation of scare resource, and about the making resources less scare
2. Matching in economist-speak for how we get many things we choose in life that also must choose us.
3. Matches are found in marketplaces. Marketplaces help shape and satisfy desires, bringing together buyers and sellers and those looking to hire, and even sometime those looking for love
4. A market involves matching whenever price isn't the only determinant of who gets what. Some matches don't use money at all - e.g. Kidney transplants
5. The new economics of market design bring science to matchmaking and to markets generally. Market design helps solve problems that existing marketplaces haven't been able to solve naturally
6. 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
7. Thick - markets that have lot of participants
8. Congestion - is a problem that marketplaces can face once they've achieved thickness. It's the economic equivalent of a traffic jam, a curse of success.
9. Decisions that depend on what other are doing called strategic decisions and are the concern of economics called game theory.
10. Repugnant transactions - transactions that some people don't want others to engage in - don't have to involve money.
11. Because economics touches on just about everything, economists have an opportunity to learn something from just about everyone.
Chapter II
1. Turning a market into a commodity market helps make it really thick, because any buyer can buy from any seller, and any seller can sell to any buyer
2. Simplicity is a competitive tool that sometimes allows new market platforms to displace old ones.
Chapter III
1. Kidney donation - willing donor isn't enough. Blood types have to be compatible
2. Kidneys and cadavers may seem out of place in a discussion about markets - but the story of of creation of kidney exchanges touches every subject about how market design has to solve problems related to incentives, thickness, congestion and timing.
3. Markets and marketplaces come in many forms, some of which don't conform to conventional notions of markets, and some in which money may play little or no role.
4. Kidneys must be exchanged without money changing hands, in a kind of barter transaction - double coincidence of wants. NO exchange could happen without a double coincidence
5. Game theory - study of strategic interactions. Game theorists try to put themselves in the shoes of market participants to understand how they might use the strategies that are available to them.
6. "I gravitated toward game theory because I cared about how people made choices and organized themselves."
7. Thomas Strazl performed the first successful liver transplant
8. Market design for kidney exchange is still about making the market thick, uncongested, safe and simple and efficient. In the case of kidney exchange, making the market thick involved assembling databases of patient-donor pairs.
9. Behavioral economists have upended traditional economic assumptions by noticing that people aren't relentlessly calculating and purely self-interested, and market designers will miss good opportunities if they forget that.
10. The general lesson - Not only do marketplaces have to solve the problems of creating a thick market, managing congestion, and ensuring that participating is safe and simple, but they also have to keep solving and re-solving these problems as markets evolve.
Chapter IV
1. Dangers associates with early transactions: they can come well before important information is available. And that can mean bad matches made and good ones missed.
2. Exploding offers - take-it-or-leave-it offers of such short duration that they didnt leave enough time for any ither firm to jump in or compete for the same candidate.
3. Exploding offers are common in unraveled markets. These offers are both early and short-lived
4. Exploding offers make markets thin, as well as early, and so participants are deprived of information about the quality of matches and what kind of matches the market might offer
5. Unraveling is a failure of self-control
6. Examples for markets that have failed due to unravelling - college football bowls, and the labor market for federal court clerks, and in various medical markets, such as gastroenterologists and orthopaedic surgeons.
Chapter V
1. Speed can make a market thrive or tear it apart
2. Even in the ultra fast world of finance (CME or NYSE), many milliseconds can pass with no trades taking place at all
3. Electronic order book - important element of the markets' current design is - first come, first served. Whoever trades first, gets the deal
4. One way financial markets provide thickness to ordinary trades is by giving professional trades the incentive to become liquidity providers
5.
Chapter VIII
Chapter XI
1. Repugnant transaction - is some people want to engage in it and other dont want them to
2. The kind of Repugnant transactions that are interesting are those where it isnt easy to specify why some people object to them
3. Markets, like languages, come in many varities. Commodity markets are impersonal but matching markets are deeply personal
3. Makets are human artificats not human phenomenon
Chapter XII