Monday, January 6, 2014

D47. Market Design is now officially a field of study

I returned last night from Philadelphia where the American Economic Association’s annual meeting was held. While I was there, my Pittsburgh colleague Asatoshi Maeshiro informed me that Market Design has arrived. In particular, the AEA publishes the Journal of Economic Literature, which classifies articles according to what field they are in. And the newest JEL Classification Codes include market design, under the overall heading of Market Structure and Pricing.  We’re D47.

        D4          Market Structure and Pricing
        D40        General
        D41        Perfect Competition
        D42        Monopoly
        D43        Oligopoly and Other Forms of Market Imperfection
        D44        Auctions
        D45        Rationing; Licensing
        D46        Value Theory
        D47 Market Design

        D49        Other

When you click on microeconomics, followed by market structure, followed by market design on the JEL classification webpage, you get to this description of the new field, with example (which are clickable on the web page, but don't seem to be when I copy them...:

D470 Market Design
Guideline: Covers studies concerning the design and evolution of economic institutions, the design of mechanisms for economic transactions (such as price determination and dispute resolution), and the interplay between a market�s size and complexity and the information available to agents in such an environment.
Keywords: Markets, Microeconomic Engineering, Price Formation, Quasi-markets
Caveats: Purely theoretical studies concerning mechanism design should be classified in D82. Purely empirical studies concerning market structure should be classified in the appropriate category under L1.


Yan Chen said...

I like the differentiation between market design and mechanism design.

Al Roth said...

I agree:)