By Alvin E. Roth
Most of the study of economics deals with commodity markets, where the price of a good connects sellers and buyers. But what about other kinds of “goods,” like a spot in the Yale freshman class or a position at Google? If you’ve ever sought a job or hired someone, applied to college or guided your child into a good kindergarten, asked someone out on a date or been asked out, you’ve participated in a kind of market. This is the territory of matching markets, where “sellers” and “buyers” must choose each other, and price isn’t the only factor determining who gets what. In Who Gets What - and Why, Nobel laureate Alvin E. Roth reveals the matching markets hidden around us and shows us how to recognize a good match and make smarter, more confident decisions.
About Alvin E. Roth
According to Wikipedia "Alvin Elliot Roth is the Craig and Susan McCaw professor of economics at Stanford University and the Gund professor of economics and business administration emeritus at Harvard University. He was President of the American Economics Association in 2017. Roth has made significant contributions to the fields of game theory, market design and experimental economics, and is known for his emphasis on applying economic theory to solutions for 'real-world' problems. In 2012, he won the Nobel Memorial Prize in Economic Sciences jointly with Lloyd Shapley 'for the theory of stable allocations and the practice of market design'."
Peter M. Jaworski on Economics and Philosophy wrote:
"Alvin Roth’s Who Gets What - And Why provides a richly accessible introduction to his pioneering work on market design. Much of economics ignores the institutions that allocate goods, blithely assuming that the mythical Walrasian auctioneer will handle everything perfectly. But markets do fail and Roth details those failures, like the market for law clerks that unravels because clerks and judges commit to each other too quickly. Roth combines theory and pragmatic experience to show how the economist can engineer successful markets. He has even enabled welfare-improving trades in kidney exchanges, where law and social repugnance forbids cash payments. [...] He may be an economic engineer, but his engineering is profoundly humane and his book captures his sense that economics should be turned to the common good. "
"The book is a significant success on its own terms. It is targeted at an intelligent lay audience, and hits that target. It is fun to read. Roth’s book is full of engaging case studies of successful and unsuccessful matching markets that are as intriguing as they are illustrative. [...] While the book did not tell me enough about the academic history of market design, nor about the debates that animate this particular field in economics, that is not what the book was meant to do. It is not a deep dive into market design. Without being shallow, the book is an invitation to the broader field. [...] It would be good to hear Roth’s opinion on whether or not he thinks repugnant markets are immoral, or not, or which ones, and why. Roth doesn’t offer us his moral take in this book. He doesn’t go so far as to tell us that kidney markets are wrongly banned. But you can read at least some of his views between the lines. Consider that Roth has gone to significant lengths to try to construct a matching market for kidneys that avoids repugnance. Instead of the exchange of cash, the valuable consideration offered is of the same token – a kidney for a kidney. [...] a possible extension of the market design approach that Roth has taken to matching markets could be a market design that categorizes moral objections to markets, and then finds ways of avoiding those features to eliminate the repugnance. Not only would this improve efficiency, it might, just as Roth has done in the case of kidneys, save lives."
Short Video on the Book
A 4.5 minute in which Roth briefly introduces the book, and then gets interviewed:
If you have more time, you may want to watch this 1-hour lecture about the book at Duke University in 2016.
Table of Contents of Who Gets What - and Why
Part I - Markets Are Everywhere
- Introduction: Every Market Tells a Story
- Markets for Breakfast and Through the Day
- Lifesaving Exchanges
Part II - Thwarted Desires: How Marketplaces Fail
- Too Soon
- Too Fast: The Greed for Speed
- Congestion: Why Thicker Needs to Be Quicker
- Too Risky: Trust, Safety and Simplicity
Part III - Design Interventions to Make Markets Smarter, Thicker, and Faster
- The Match: Strong Medicine for New Doctors
- Back to School
Part IV - Forbidden Markets and Free Markets
- Repugnant, Forbidden ... and Designed
- Free Markets and Market Design