Why markets fail — and how to fix them, a conversation about market design, among Scott Kominers, Tim Roughgarden and Al Roth

 I've now been the guest on many podcasts, aimed at many different kinds of listeners. This is the one for people with an academic interest in market design as a growing part of economics (as well as Scott Kominers' academic origin story, and an inside joke about a colleague at HBS:)

Why markets fail — and how to fix them, a conversation among Scott Kominers, Tim Roughgarden and Al Roth 

 

Why markets fail — and how to fix them (ft. Nobel economist Alvin Roth)
22.7K subscribers
Jul 10, 2026
Long before crypto made coordination programmable, Nobel Prize winner Alvin Roth was designing markets where coordination could save lives.

In this episode of First Principles, Roth tells the story of how he helped build systems for some of the hardest matching problems in the world, from where doctors train and where students go to school to how kidney donors can reach the patients who need them.

He joins Tim Roughgarden, Head of Research at a16z crypto, and Scott Kominers — Harvard Business School professor, a16z crypto research partner, and one of Roth’s former students — for a conversation about how market design moves from theory into the real world.

They explore how economic theory becomes practical engineering, whether that's matching riders to Ubers, doctors to medical residencies, students to New York City high schools, or organ donors to people whose lives depend on it. They also cover how these same problems show up in today’s crypto networks. 

Roth explains why markets are not just natural forces, but engineered systems; why the details of timing, congestion, incentives, and trust can make or break a marketplace; and why some of the most important markets are the ones where simply exchanging money can’t do the work.

This is a conversation about economics at its most practical and profound: how to design systems that coordinate people, solve real problems, and sometimes save lives.

00:00 Intro: Why market design matters
04:18 The economist as engineer
08:09 When theory meets the real world
07:02 Fixing the medical residency match
15:32 Why markets unravel
18:22 Redesigning NYC high school admissions
28:05 The hidden problem of congestion
34:47 How kidney exchange saves lives
45:26 How the internet changed market design
48:25 Airbnb, Uber and smarter marketplaces
51:28 Repugnant transactions and moral economics
53:32 When markets need social support
54:32 The unexpected effects of criminalizing surrogacy
01:04:58 Preference signals and the job market 01:18:53 A broken market: resettling refugees and other migrants
 

Hear more from: Tim Roughgarden:   / tim_roughgarden   Scott Kominers:   / skominers   Follow a16z crypto: X:   / a16zcrypto   LinkedIn:   / posts   YouTube:    / @a16zcrypto   Substack: https://a16zcrypto.substack.com/subsc...

Crypto art by Scott Kominers

Scott Kominers is interviewed about crypto art, by Lorepunk:

How Harvard Professor Scott Kominers Makes PFP Puzzles Out Of Math
Lorepunk

"The meaning of art lies in more than just beauty, and the meaning of math resides in more than the work it can do in our technologies and lives. Both reflect, and describe, the reality of our existence.

"That’s what drew this writer to the art of Scott Kominers, who is what they used to call “a man of parts,” accomplished in many fields. He’s a professor at Harvard Business School, a research partner at the crypto arm of venture capital firm a16z, and a designer of market incentives. We in the web3 space also know him as a great commentator and champion of NFTs, who penned “The Everything Token” alongside Steve Kaczynski.

"His art collections, first launched in January 2025, bring these threads together, weaving playful math references and cultural connections into bold, colourful fields of pixels, generative and fully on-chain.

"They are appealing to the eye, but what inspires most about Kominers’ artworks is that they have their own vernacular, or artistic language.

"NFT collectors know about these. Opepen is one, Punks another. You can express or reference many things with an artistic grammar: check out, for example, this version of the Magna Carta, the document that established the principle that nobody is above the law. Kominers’ version dropped on June 14, the day that Trump watched a tepid military parade on his birthday.

...

"Lorepunk: For those who might be new to your body of artistic work: how did you develop with your unique style – fields of pixels, often referencing cultural phenomena within our community via colour and pattern, math-forward, with puzzles attached?

Scott Kominers: 2025 is a perfect square, i.e., 45². I’ve always loved celebrating unusual properties of numbers – and, on New Year’s Day I realized that this means that the year can be expressed as a perfectly square 45 x 45 pixel canvas."

...and more...

 

The Everything Token. By Steve Kaczynski and Scott Duke Kominers

 Here's a look into a possible future of the web (but it's still available in hardcover):

The Everything Token.  HOW NFTS AND WEB3 WILL TRANSFORM THE WAY WE BUY, SELL, AND CREATE.  By Steve Kaczynski and Scott Duke Kominers

"A Harvard Business School professor and a16z crypto research partner and a career marketer and Web3 entrepreneur demystify the coming digital revolution, showing how NFTs will transform our online and offline interactions."

“NFTs were a mystery to me. Thanks to this book, both the economics of NFTs and how businesses can use them are now in sharp focus and no longer mysterious. It helps, too, that the book was so much fun to read!”

— Paul Milgrom, Shirley and Leonard Ely Professor of Humanities and Sciences at Stanford University and Nobel Laureate in Economics"

“You can’t ask for savvier or more enthusiastic guides to the potential of NFTs than Kaczynski and Kominers.”
— Alvin E. Roth, Craig and Susan McCaw Professor of Economics at Stanford University and Nobel Laureate in Economics

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Earlier: 

Saturday, November 13, 2021

Non-fungible tokens (NFTs), in Harvard Business Review, by Kaczynski and Kominers

Scott Kominers on the history of matching, at Tsinghua, tomorrow

 CMSA/Tsinghua Math-Science Literature Lecture: Scott Kominers

"Beginning in Spring 2020, the CMSA began hosting a lecture series on literature in the mathematical sciences, with a focus on significant developments in mathematics that have influenced the discipline, and the lifetime accomplishments of significant scholars."

Scott Kominers speaks about Strategy-Proofness, Investment Efficiency and Marginal Returns -- video

Here's a video of a recent lecture by Scott Kominers: Strategy-Proofness, Investment Efficiency and Marginal Returns

"In this presentation, Scott Duke Kominers noted that mechanism design tends to examine only the market clearing stage. The field treats human capital as a fixed or predetermined input, rather than a dynamic range of possibilities. His own model uncovers a relationship between three variables: strategy-proofness, investment efficiency, and marginal rewards."