Axel Ockenfels, interviewed about market design

Here's a recent interview of Axel Ockenfels, about market design.

Interview Marc Kley

1. Professor Ockenfels, your work focuses on the design of markets and incentives. How can founders leverage your scientific insights when developing their business models?

Every business model is, to some extent, an exercise in incentive and market design, whether founders are aware of it or not. Whoever builds a platform, a pricing scheme or an app decides who can trade with whom, what information they see, and what incentives they face. Market design research offers three lessons for founders. First, details matter: seemingly minor rules can make or break a market. I have seen many systems fail because of seemingly innocuous design mistakes. Second, behavior matters: people reciprocate, care about fairness, are loss averse, and are quickly overwhelmed by complexity. Third, testing matters: experiments are the wind tunnel of market design and the gold standard for finding out what works and what does not. 

... 

4. In your opinion, which major societal challenge could be solved more effectively if we designed markets, platforms, and incentives more intelligently?

Almost any. Take climate change. It is often framed as a moral problem, but at its core it is a cooperation problem: everyone benefits if emissions fall, yet each country, company and individual prefers others to bear the cost. A uniform carbon price would steer billions of everyday decisions toward climate protection without micromanaging any of them. Not less importantly, our research shows that carbon pricing facilitates international negotiations built on reciprocity, which can stabilize cooperation where unilateral pledges fail. A similar logic creates value elsewhere: kidney exchange programs save lives, well-designed electricity markets keep the energy transition affordable, and clever matching systems allocate school places more fairly. Wherever incentives are misaligned, better economic design can unlock large social value

 

Regulated and black market marijuana in Germany

 The FT has the story:

Germany becomes Europe’s largest regulated cannabis market.  Critics are calling for legislation to be tightened two years after the drug was partially liberalised,  by Aysun Bora 

"Legal marijuana imports have increased sixfold since 2024, according to data from the Federal Health Institute. That year, the leftwing government led by then-chancellor Olaf Scholz passed laws allowing adults to possess and privately cultivate cannabis, while also expanding legal sales to users with a prescription.
 ...

"Despite the partial legalisation, more than half of weed consumers do not rely on medical prescriptions to get the drug.

“Social supply”, meaning purchasing cannabis through social contacts, makes up 35.2 per cent of the market, even as selling the plant without a medical prescription remains illegal. The next biggest source, at 21 per cent, is for consumers to grow their own, according to a study conducted in the second half of 2025.
 

Abortion opponents seeking to ban surrogacy in Texas (and supporters are thinking about more regulation)

 Human reproduction gives rise to lots of different controversies, with the partisans not always aligned across issues the ways you might suppose. Here are two articles responding to a recent controversy in the news, one about a proposed ban on surrogacy in Texas, and one proposing more comprehensive regulation as a way of supporting access to surrogacy in the face of opposition.

Here's an article from the 19th News (named after the 19th Amendment to the US constitution, which gave women the right to vote), about how abortion opponents in Texas are hoping to also outlaw surrogacy there. 

Why abortion opponents are turning their attention to banning surrogacy 

 "Anti-abortion activists and lawmakers in Texas are pressing to limit or even outlaw surrogacy, a new step toward restricting major forms of infertility treatment.

"Surrogacy, though far from common, has entered the national spotlight this summer, the result of an explosive case in which an Alaska woman named McKenna West — who had been hired to carry a pregnancy for a California-based couple — traveled to Texas to seek medical care after refusing to have an abortion. She gave birth in Dallas last week.

...

"the case has become a lightning rod for national anti-abortion activists, including Texas Attorney General Ken Paxton, who intervened in the case on behalf of West to argue that the child must receive life-sustaining treatment in Texas, even though court records indicate his parents sought for him to receive care in California. (Paxton, who has frequently allied himself with social conservatives, is in a competitive race to represent Texas in the U.S. Senate.) West has secured representation from the Alliance Defending Freedom, a prominent anti-abortion legal group. 

Abortion opponents have argued that the case underscores a need to outlaw surrogacy entirely.  

...

"Kristan Hawkins, the president of the national anti-abortion group Students for Life of America, argued on the social media platform X that surrogacy “is human trafficking with better marketing.”

...

“It’s reasonable to expect some legislation will move at least out of the Senate on this topic,” John Seago, the head of Texas Right to Life, an anti-abortion organization that opposes surrogacy in all forms, told The 19th. Seago’s organization also opposes the freezing of and destruction of embryos that are not used for pregnancy, a standard component of IVF. 

...

"The Texas Public Policy Foundation, an influential right-wing think tank in the state, has also argued in favor of banning surrogacy. And the state Republican Party adopted a platform this summer saying it would support outlawing any “commercialization of human reproduction in Texas.”  

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 And here's a call for more (and more national) regulation of surrogacy, in the WSJ:

Surrogacy Is Getting Weird
Dozens of American babies commissioned by Chinese billionaires, felony charges, embryo mix-ups and more.  By  Emma Camp 

Reasons to be cheerful discusses kidney exchange

 The magazine Reasons to be cheerful has a cheerful discussion of kidney exchange (which includes some reflections by Mike Rees on non-simultaneous chains):

The Chains of Generosity Transforming Kidney Donation
More than 90,000 people in the U.S. are on the waitlist for a kidney transplant. How many of their lives could be saved by strangers?  By: Anna Patton 

 "Momentum is building in the U.S. behind the proposed End Kidney Deaths Act, which would provide a refundable tax credit of $50,000 to those who donate a kidney to a stranger. Campaigners say this would remove financial barriers to donating, which include loss of income during testing, surgery and recovery — while saving the billions of dollars currently spent on dialysis. "

Martin Dufwenberg is celebrated at Purdue

 Purdue recognizes Martin Dufwenberg as a distinguished professor. (Here's his Google Scholar page.)

Here's the Purdue announcement:

Trustees approve named professorships and deanships, distinguished professors, appointment of new athletics director, resolutions of appreciation and namings 

 "Dufwenberg joined the faculty at Purdue in 2025 as a professor of economics. His research uses game theory and experiments to incorporate insights from psychology into economic analysis. Much of his work develops and applies a formal framework called psychological game theory, which is useful for modeling emotions, reciprocity, social norms and image concerns. His publications have appeared in many scientific outlets, including Econometrica, American Economic Review, Neuron, The Review of Economic Studies, Journal of Economic Theory, Games and Economic Behavior, and more. Dufwenberg currently serves on the editorial boards of the Journal of the Economic Science Association and Experimental Economics. His honors and awards include being named an Economic Theory Fellow as well as receiving an honorary doctorate at the University of Gothenburg, the Erik Malmsten Visiting Professorship Award, the Royal Economic Society Prize and more. "

NBER workshop on Market Design, Stanford, Oct 16-17, call for papers

 Here's the call for papers for the NBER workshop on market design, at Stanford in October.

"To: NBER Market Design Working Group

From: Michael Ostrovsky and Eric Budish

 The National Bureau of Economic Research workshop on Market Design is a forum to discuss new academic research related to the design of market institutions, broadly defined. The next meeting will be held in Stanford, California on October 16 & 17, 2026.  We are planning for an in-person only meeting. There will not be an option to attend virtually.

 We welcome new and interesting research and are happy to see papers from a variety of fields.  Participants in the past meeting covered a range of topics and methodological approaches. Last year's program can be viewed at:

https://urldefense.com/v3/__https://www.nber.org/conferences/market-design-working-group-meeting-fall-2025__;!!G92We9drHetJ8EofZw!dlT9ZZcoCaeO7GqTUkKgKVVgvGpB5MDHs3RNvyJj9679UKlOmu2AuKoOlSYuYRe1c8QYnkLCcm9R5cJtdME$

 

The conference does not publish proceedings or issue NBER working papers - most of the presented papers are presumed to be published later in journals.

 

We would appreciate it if you could pass this call for papers on to colleagues who might be interested, but who may not be on the Bureau's mailing list. Submissions are welcome from researchers with and without NBER affiliations and from researchers at all career stages.

 

If you are interested in presenting a paper this year, please upload a PDF version by midnight EDT on August 23, 2026, to this link:

 https://urldefense.com/v3/__https://conference.nber.org/confsubmit/backend/cfp?id=MDf26__;!!G92We9drHetJ8EofZw!dlT9ZZcoCaeO7GqTUkKgKVVgvGpB5MDHs3RNvyJj9679UKlOmu2AuKoOlSYuYRe1c8QYnkLCcm9RUJB5pBU$

 Preference will be given to papers for which at least a preliminary draft is ready by the time of submission. Only authors of accepted papers will be contacted.

 Unfortunately, the NBER cannot cover the travel costs or hotel expenses of participants.

 There are a limited number of spaces available for graduate students to attend the conference, though we cannot cover their costs. Please email ostrovsky@stanford.edu and eric.budish@chicagobooth.edu  a short nominating paragraph.

 Please forward this announcement to any potentially interested scholars. We look forward to hearing from you."

How heart transplants gave birth to brain death (new book by Basil Baccouche)

 Basil Baccouche has a forthcoming book, which I found pretty thrilling:

The End of Death: A Surgeon, a Heart Transplant, and the Fight to Change What It Means to Die

 

Here's my blurb for the book:

 “Basil Baccouche is a new star in the constellation of physicians who write. The End of Death tells the gripping story of a tireless doctor (Norman Shumway), a drug (cyclosporine), and a law (recognizing brain death) that combined to make heart transplants one of the miracles of modern medicine.”