MERCURY, the Roman god of markets, is a quick-witted, eloquent, thieving rascal. Appropriately, many markets, where mere mortals hustle and haggle, reflect his spontaneous nature. Whenever two people meet in the market and engage in a well-informed transaction free from coercion, they benefit from it. As long as these transactions do not hurt others, free exchange without government meddling makes the whole society better off. Yet for markets to work well, as Alvin Roth, a Stanford economist, argues in his new book, "Who gets what—and why", they often require patient and intelligent design.
Mr Roth has spent his career studying markets that are far from this ideal. He argues that economists should be more like engineers and think carefully about designing well-functioning markets. One example that Mr Roth describes in his book is the clearing-house that matches American medical students to their residency programmes in hospitals. Hospitals submit lists of students they want to hire to the clearing-house and students write down their...Continue reading
from Economics http://ift.tt/1TKgx6V
via IFTTT
No comments:
Post a Comment