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.
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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
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