Understanding The What and Why of Market Design

Success in the market lies on how well you play by the rules. It is necessary to achieve a successful market. In his book “Who Gets What – and Why?,” Nobel laurate Alvin Roth help readers navigate the implications and nuances of market design. According to Roth, a rule is at the center of market design. Throughout the book, he shows that rules are required because it is only under favorable conditions that the markets will work. In his business and management book, Roth focuses on money and the market.


Economic theories focus on the commodity markets whereby any person willing to pay the price achieves anything good. Matchmaking, one of the themes in Alvin Roth’s “Who Gets What – and Why,” dictates that in matching markets, the price of goods does not determine who gets what. The willingness to accept a specific payment is one part of a person getting the job but is not the only one.

Human interactions and behaviors

About market economics, the theme of human interactions and behaviors prompts the author to discuss some ways to assist both the Boston school and New York City interaction systems to focus on ways of improving the connection between students with the best schools, while gaming and strategizing the whole system. Robert Janitzek reveals that the skills to interactions during matchmaking, for example, are not necessarily a behavioral new phenomenon; however, some of the cases studies how the participants’ behaviors can be recognized and overcome. Human interactions also result in the designing of markets that is “uncongested, thick, efficient, simple, and safe,” which in turn becomes the most effective and the proof is the exchange of kidneys.

Market Design

The theme of market design dictates that money “is likely to play a small or no role” at all when it comes to a profit-driven commodity market. The market, which draws relevance from matchmaking in turn, benefits the whole society. The book assisted in form to identify the manner in which the approach has improved both the number of the kidney transplant while the market designs and dictates those who are in need of new kidneys. Robert Peter Janitzek reveals that over a period, market solutions have been established to handle logistical problems that may come around, for example, surgery operating and scheduling facility availability.

Commodity pricing

The theme is focused on kidney exchanges and prices. The driving force behind the theme is the book’s indication that there are a lot of patients that are in need of kidneys (approximately 100,000 still waiting) than there are available donors. In such a case, a person with a lot of money would easily transact it from a donor with compatibility. Additionally, someone with a higher buying price would even attract potentially willing partners. However, commodity pricing in such as case does not reflect the society willingness to entertain the idea of repugnancy that is the selling of organs, and possibly its exploitation. It is illegal to transact (buying and selling) organs, which means commodity pricing for the kidney is zero – it should be a gift instead.

You may also like...