Who Gets What: the new economics of matchmaking and market design

Professor Alvin Roth, Harvard Business School

Co-presented with the School of Economics, Faculty of Arts and Social Sciences

Tuesday 10 July, 2012

What are markets and marketplaces? How do they work? How do they fail? How can we fix them when they’re broken? In recent years economists have stepped forward as market designers to try to craft answers to these questions. These questions are particularly difficult for matching markets, which are markets in which you can’t just choose what you want, but also have to be chosen. If a market has an application or selection procedure, it’s a matching market, and matching markets determine some of the most important transitions in life. Who goes to which schools and universities? Who gets which jobs? Who gets scarce organs for transplant? Professor Alvin Roth illustrates with examples of recent market designs, in school choice, labor markets and kidney exchange in the US.

Professor Al Roth

Al Roth is the George Gund Professor of Economics and Business Administration in the Department of Economics at Harvard University. He works in game theory, experimental economics, and market design. The best known of the markets he has designed (or, in this case, redesigned) is the National Resident Matching Program, through which approximately twenty-five thousand doctors a year find their first employment as residents at American hospitals. He has also helped in the re-organisation of the labor markets for various other kinds of medical and health care professionals.

He helped design the high school matching system used in New York City to match approximately ninety thousand students to high schools each year, He is one of the founders and designers of the New England Program for Kidney Exchange, for incompatible patient-donor pairs. He is the chair of the American Economic Association's Ad Hoc Committee on the Job Market, which has designed a number of recent changes in the market for new Ph.D. economists.