Market design

Market design is a practical methodology for creation of markets of certain properties, which is partially based on mechanism design. In some markets, prices may be used to induce the desired outcomes — these markets are the study of auction theory. In other markets, prices may not be used — these markets are the study of matching theory.

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In his 2008, Nemmers Prize lecture, Market Design and Stanford University economist Paul Milgrom commented on the interdisciplinary nature of market design: "Market design is a kind of economic engineering, utilizing laboratory research, game theory, algorithms, simulations, and more. Its challenges inspire us to rethink longstanding fundamentals of economic theory." Milgrom is, along with fellow Stanford economist Al Roth, one of the founders of modern Market Design.

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