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You are here: Home > Suggested readings > Roth - Who Gets What (market design) - ISBN 9780007520787 - 3.5/5

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Published on 2018-05-06 20:59:02 | words: 1199


Roth, Alvin E.
Who Gets What ? and Why: The New Economics of Matchmaking and Market Design
BookID 155506942
ISBN 9780007520787
(see LibraryThing.com card)
Description (from Amazon)"In his fluent and accessible book, Mr. Roth vividly describes the successes of market design." - Economist.com?

"In this fascinating, often surprising book, Alvin Roth guides us through the jungles of modern life, pointing to the many markets that are hidden in plain view all around us." - Dan Ariely, author of Predictably Irrational and The (Honest) Truth About Dishonesty

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.

"Mr. Roth's work has been to discover the most efficient and equitable methods of matching, and implement them in the world. He writes with verve and style . . . Who Gets What-and Why is a pleasure to read." - Wall Street Journal

"A book filled with wit, charm, common sense, and uncommon wisdom." - Paul Milgrom, professor of economics, Stanford University and Stanford Business School
My review: 3.5/5[review posted on 2018-05-06]

Today I finished re-reading this book. Why re-reading? Because I first read a library copy (in Italian), and while reading it decided that it was worth buying.

Yes, the presentation from Amazon.com gives a fair assessment of the book- but it is worth reading it for other reasons.

New businesses (not just online) nowadays are often built around a concept of "ecosystem"- and many large companies in "mature" industries (automotive, banking, retail) are repositioning themselves as providers of experience and reasons to reinforce belonging to their own ecosystems.

This extended so far that some "traditional" (i.e. pre-Internet) business leaders claimed that their own company in few decades will make more money from services than from their own products- in automotive.

Actually, it is also what I was told about a decade ago from somebody in banking, making more money from real estate and facilities management (including ICT services outsourcing) than from the "bread-and-butter" of retail banking.

But, as in the case for Amazon and AWS, being seen as a serious player within its own "traditional" business was what gave them credibility for the other activities.

Now, in reality any "ecosystem" needs embedded reasons to keep anybody joining it feeling that it is actually a relatively "fair" environment.

Therefore, while the Amazon presentation focuses (as the book title) on decision-making by those joining the market, with the support of few other books could actually be useful as a manual for those that need to design new business ecosystems.

"Market Design" (what this book is about) as well as "motivational and product design" (e.g. see my review of "Hooked" https://www.librarything.com/work/14582334/book/155253259 and "Transformationale Produkte" https://www.librarything.com/work/20694812/book/148511031) require designing something that delivers stable results (that's the operational definition of "fair"- similar amount of resources committed to the market should produce similar results under similar conditions, no bias on results upon who is the player, as otherwise the perception of the market as worth playing in is lost).

And this is also the reason our "level playing field" laws and regulations (e.g. anti-trust).

Now, I have to apologize with the Italian translator: I like to buy books in their original language, but in this case the text was convoluted in Italian- so I assumed that maybe the English original would be better.

Well... The syntax is the same, and, of course, the constant repetition across of the book of whole segments smacks of "copy-and-paste".

Nonetheless, it is useful to remind of something else, that I will leave the author to describe in his own words (page 228):
"__The Language of the Marketplace__

We encounter markets through marketplaces, just as we experience language through speeches, conversations, books, essays, and tweets.

And markets are like language. Both are ancient human inventions. Both are tools we use to organize ourselves, to cooperate and coordinate and compete with one another, and ultimately to figure out who gets what. These two fundamental human artifacts play a role in all the things we do and in everything we make (we can't even make love, let alone war, without them).

Markets and languages both constantly adapt. [omissis] And there are specialized markets, such as kidney exchange, that are custom-designed to accomplish what more conventional markets cannot- just as there are specialized mathematical and computer languages to communicate things that elude ordinary speech.

Markets, like languages, come in many varieties. Commodity markets are impersonal, but matching markets can be deeply personal, as personal as a job offer or a marriage proposal. And once you observe that matching is one of the major things that markets do, you realize that matching markets- markets in which prices don't do all the work, and in which you care about whom you deal with- are everywhere, and at many of the most important junctures of our lives.


__Economists as Engineers__

[omissis] The first farmers grew what they found, but over time farmers began to keep the seeds from their most successful crops to plant the following year, and so they started, inadvertently, to be plant breeders. [omissis] Because markets and languages are tools that we use collectively, they may be hard to redesign even when they are working badly. As a result, we have to limp along with some bad designs, like awkward spellings.

But sometimes we do get to redesign markets that are working badly. And sometimes we even get to design entirely new markets.

There are the opportunities to treasure, to study, to approach with humility, and to monitor with care.

Markets are human artifacts, not natural phenomena. Market design gives us a chance to maintain and improve some of humanity's most ancient, essential inventions."
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