Economics & Finance / Economic Theory / Microeconomics
In Finding the Optimal Match: Market Design and Game Theory, Alvin Roth explores the operational
Who Gets What — and Why: The New Economics of Matchmaking and Market Design
Nobel Prize in Economics Papers Series： In Finding the Optimal Match: Market Design and Game Theory, Alvin Roth explores the operational mechanisms of matching markets, pointing out that price is not the sole determinant of resource allocation. A successful market must possess depth, overcome congestion, and ensure safe and convenient interactions for participants. Through analyses of cases such as kidney transplants, school admissions, and employment, the author reveals how information asymmetry and premature trading can lead to market failures. The paper emphasizes the importance of market design, namely, addressing pain points such as "front-running" and trust issues through algorithmic and rule optimization. Furthermore, the author explores how negative trading defines market boundaries, reflecting the constraints of social values on economic behavior. Ultimately, these studies demonstrate how scientific design can make complex, non-monetary markets operate more efficiently and fairly.
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