One of the challenges of electric power market design comes in the need to consider the consequences of design choices for both market outcomes and grid reliability. Strictly speaking, the two kinds of consequences are not neatly separable, as market choices affect system reliability and system reliability affects market outcomes. The interaction between the two … More Integrating reliability-must-run practices into wholesale electricity markets
Alex Tabarrok reviews Al Roth‘s new book, Who Gets What — and Why: The New Economics of Matchmaking and Market Design, in the Wall Street Journal. An excerpt: Most economic theory focuses on commodity markets, in which anyone willing to pay the price gets the good and anyone not willing to pay the price doesn’t. In … More Al Roth’s new book on matchmaking and market design
Since 2008, multiple smart grid pilot projects have been occurring in the US, funded jointly through regulated utility investments and taxpayer-funded Department of Energy cost sharing. In this bureaucratic market environment, market experimentation takes the form of the large-scale, multi-year pilot project. The regulated utility (after approval from the state public utility commission) publishes a … More Technology market experimentation in regulated industries: Are administrative pilot projects bad for retail markets?
Michael Giberson Stanford’s alumni association magazine has a good article on recent economics Nobelist Al Roth. Several things about the article will trigger resistance among some free market readers, beginning with the title (“The Visible Hand”) and the subhead (A new breed of economist, Alvin Roth brings an engineering sensibility to fixing markets.). Deep into … More Al Roth, Matchmaker
Michael Giberson Buzzfeed columnist Russell Brandom explains, “Economists Are Taking Over the Game Industry: The game industry is hiring a new class of central bankers — but not in time to save Diablo III.” The post links to my earlier post on Diablo’s auction market design. Perhaps in support of Brandom’s title, the current (June 2012) Job … More Game-industry market design job openings for economists
Michael Giberson I don’t play Diablo III, but I do follow price gouging discussions online, which led me to this post on the Diablo III discussion forum: “Auction House and Price Gouging.” The initial complaint comes from a player trying to equip a new character through purchases in the Auction House, an in-game player-to-player trading mechanism, and … More Poor market design causing high prices in Diablo III auction house?
Michael Giberson Harvard economic systems designer Al Roth is profiled in the Boston Globe: Academically speaking, Roth is a pioneer of so-called market design: finding situations where a market is failing — often, a place that most people wouldn’t even recognize as a market — and making it work better. Roth has influenced a cadre … More Market design helps people attain goals effectively