Market design and water conservation in the the Great Salt Lake

Silvia Console Battilana, who co-founded Auctionomics along with Paul Milgrom, writes in Forbes about the prospects for market design efforts to help conserve Utah's Great Salt Lake. 

How Market Design Could Help Save Utah’s Great Salt Lake by 
By Silvia Console Battilana

 "the Great Salt Lake is drying up.

"To save the lake while protecting water users, business leaders can adopt a little-known but powerful economic tool: market design. When water levels drop, the consequences immediately hit commercial supply chains and local commerce. Market-based incentives give businesses a way to reward upstream water conservation, bringing more water to the lake without hurting regional growth. The invisible hand of the market could identify the least expensive conservation, compensate participating water users and restore the Great Salt Lake.

...

"The shrinking of the Great Salt Lake has many causes, and there is no silver-bullet fix. But any solution to refill the lake will likely involve conservation within Utah. Seventy-one percent of the water diverted from the lake’s basin is allocated to agriculture. If those commercial users could make more efficient use of water, more would reach the lake.

The catch is that many conservation practices, like water-friendly infrastructure and precision irrigation, are expensive. Under Utah’s traditional “use-it-or-lose-it” water rights system, users have little financial reason to conserve. Without modern economic incentives, asking businesses and farms to voluntarily cut back simply isn’t realistic.

Even if water users could be forced to cut back, it’s not clear who should cut back, or by how much. The costs of water conservation aren’t the same across users, and they can be very hard to estimate.

Market design can address both of these challenges. Crucially, markets don’t force particular actions or behaviors. Instead, well-designed markets create an incentive for farms and communities to cut back on water and be rewarded for their efforts. Anyone who can cost-effectively reduce consumption will do so, while others aren’t compelled to conserve if it would be too expensive.

Market Design Works
Even when the stakes are high and a lot stands in the way, intentionally designed markets can successfully align self-interest with the public good.

Further, market design can be used to align incentives even when money isn’t exchanged: it has been used for organ donation exchanges and food banks. Harnessing the invisible hand of the market to align incentives in pursuit of a common goal is an effective tool for difficult problems."

 

 

NBER Market Design Working Group Meeting, tomorrow at Stanford

 Here's the program for the NBER Market Design Working Group Meeting, Fall 2026

I'll be discussing Moral Economics with Canice Prendergast. 

Friday, October 16

8:00 am Continental Breakfast

 

9:00 am Personalized Recommendations Without Inducing Congestion: Mitigating Disparities in the NYC High School Match

Erica Chiang, Cornell University

Nikhil Garg, Cornell University

Jon Kleinberg, Cornell University

Rebecca Lichtenstein, New York City Public Schools

Brielle McDaniel, New York City Public Schools

Kristen O’Neil, New York City Public Schools

Kenny Peng, Cornell University

Eva Tardos, Cornell University

Dejaunique Thomas, New York City Public Schools

Lianna Wright, New York City Public Schools

 

9:45 am Who Gets What in Education: Can School Matching Improve Student Achievement?

Atila Abdulkadiroglu, Duke University and NBER

Parag A. Pathak, Massachusetts Institute of Technology and NBER

Christopher R. Walters, University of California, Berkeley and NBER

 

10:30 am Break

11:00 am Searchable Menus

Piotr Dworczak, Northwestern University

Frank Yang, Stanford University

 

11:45 am Two-Sided Matching with Partial Participation

Avinatan Hassidim, Bar-Ilan University

Assaf Romm, Hebrew University of Jerusalem

Ran Shorrer, The Pennsylvania State University

 

12:30 pm Lunch and Conversation with Al Roth about his latest book, "Moral Economics" with Canice Prendergast as Moderator

 

2:30 pm Clearing Multi-Unit Markets with Simple Pricing

Ali Makhdoumi, Duke University

Saša Pekeč, Duke University

Xinchang Wang, Duke University

 

3:15 pm Quota Marketplace: Dynamic Pricing for Efficient Allocation of ML Training Resources

Vasilis Gkatzelis, Drexel University

Renato Paes Leme, Google Research

Ian McFarlane, Google Research

Nehal Mehta, Google Research

Vahab Mirrokni, Google Research

Balasubramanian Sivan, Google Research

Mihai Tiuca, Google Research

Amin Vahdat, Google Research

Soheil Hassas Yeganeh, Google Research

 

4:00 pm Break

 

4:30 pm One-Shot Pricing for Hands-Off-the-Wheel Advertising Markets

Emerson Melo, Indiana University

Matthew Shum, California Institute of Technology

Rakesh Vohra, University of Pennsylvania

 

5:15 pm Paying for Information, Not for Clicks: A Block-Level Publisher Content Marketplace for AI Answers

Markus Mobius, Microsoft Research

Nicole Immorlica, Microsoft Research

Oliver Kiss, Spreadmonitor

Brendan Lucier, Microsoft Research

Ishan Mahajan, Microsoft Research

Jingyi Qiu, University of Michigan School of Information

Tanya Rosenblat, University of Michigan

David M. Rothschild, Microsoft Research

Andras Sari, Central European University

Colin Watson, Microsoft Research

6:30 pm Group Dinner 

 

Saturday, October 17

8:00 am

Continental Breakfast

9:00 am

Screening for Usage

Justin Hadad, Stanford University

Kyle Woodward, Assign Group

 

9:45 am

Pricing the Right to Renege in Search Markets: Evidence from Trucking

Richard Faltings, University of California, San Diego

 

10:30 am

Break

 

11:00 am

Competition and Welfare in Airport Slot Allocation

Sebastian D. Bauer, Universidad Carlos III de Madrid

11:45 am

Road Pricing under Heterogeneity

Itai Ater, Tel Aviv University

Brad Ross, University of Pennsylvania

Adi Shany, Tel Aviv University

Shoshana Vasserman, Stanford University and NBER

 

12:30 pm

Boxed Lunch and Adjourn

Market Design Impact Award to Yan Chen

 Here's the announcement from INFORMS:

Announcing the Winner of 2026 Market Design Impact Award

 "The Auctions and Market Design section of INFORMS is pleased to announce that Yan Chen, Daniel Kahneman Collegiate Professor of Information at the University of Michigan School of Information, has been selected as the recipient of the 2026 Market Design Impact Award. The award will be presented at the AMD Business Meeting at the INFORMS Annual Meeting in San Francisco, tentatively scheduled for Monday, November 2, 6:45–7:45 PM.

Award citation:
"For pioneering behavioral market design-combining theory, digital experiments, and large-scale field experiments-with lasting impact on the practice of market design, including the reform of Chinese college admissions, the organization of gig workers on ride-sharing platforms, and the design of recommender systems that increase contributions to digital public goods."

Now in its second year, the Market Design Impact Award recognizes major contributions to market design-original research from the past fifteen years that has had a lasting impact, directly or indirectly, on the field and/or the practice of market design.

Award Committee:
Eric Budish, The University of Chicago Booth School of Business
Tim Roughgarden, Columbia University
Nicolas Stier, Meta

Conflicts of interest were carefully handled such that they would not influence the committee decision. "

#########

Here's last year's (inaugural) award:

Friday, October 31, 2025 Market Design Impact Award to Hassidim, Romm, and Shorrer

 

Market design from the Perspective of Theological Anthropology, by Christina McRorie (in the January 2027 ASSA program)

I'm always on the lookout for different perspectives on market design, and here's a paper that caught my eye in the  ASSA Preliminary Program for the January 2027 meetings in Washington DC.

 It's in a session called  What Economic Models Can and Cannot See: Human Flourishing, Freedom, and the Common Good (B4)  Hosted by the Association of Christian Economists 

Can Market Design Make Us More Free? Some Notes on the Use of Experimental Economics from the Perspective of Theological Anthropology  by Christina McRorie, Boston College 

Abstract
Although modern thought tends to construe freedom as freedom from constraint or freedom of choice, Catholic theological anthropology has long defined true freedom as the state of being agentially oriented toward the good. As Servais Pinckaers puts it, it is “freedom for,” rather than “freedom from”—specifically, freedom for living in a Christ-like way, which becomes possible as we come to participate in Christ’s character. This perspective suggests that social influences which encourage our growth in character are not only helping us become more good, but also more free. Moreover, because this conception of freedom is not based in autonomy, this remains true even if these formative influences are not chosen by us, and work on us without our awareness.
Using this concept of freedom, this paper considers the theological implications of experimental research on prosocial behavior in markets. It appears that certain conditions encourage subjects to act with more fairness, trustworthiness, and even generosity than they might under other conditions. (E.g., when market participants can observe each other’s behavior and communicate, and when the social framing of various options emphasizes values, or at least does not emphasize competition or the threat of loss, among other factors.) Insofar as laboratory studies replicate conditions present in actual markets, this indicates that some real markets elicit more moral behaviors than others.
Moreover, because virtue theory assumes that character is built through repeated moral action, markets which encourage individuals to act in prosocial ways can be read as supporting their growth in virtue, insofar as these elicited actions eventually influence individuals’ dispositions and habits. To the extent that this occurs, this paper proposes that good market design can encourage us to become more good, and thus more free. 

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

 

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."

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...

Introduction to market design and medicine: video of my public lecture in Taiwan

 Here's a video of the talk I gave in Taiwan on Markets, marketplaces and medicine. My talk begins at around minute 9:35, after introductions and photographs, and the camera focuses on me rather than on my slides, but I think you can follow the talk well even without seeing the slides.  A Q&A session begins at around minute 59:45, with the first question being about marriage (in which I get to quote Claudia Goldin on dads versus duds:)*

 ###########

* See, earlier

Tuesday, September 23, 2025  The Downside of Fertility by Claudia Goldin---Dads versus duds

 

Judd Kessler: the most helpful advice I ever got (YouTube short video)

 I was charmed by this very short video featuring Judd Kessler (and I'm very grateful to whoever gave him that advice):

 

 

https://youtube.com/shorts/zBTlYwvYE2M?si=q6_vRIflWvAmMDYb 

 

 

 

 

You can see his new book, Lucky By Design in the background 

“Lucky by Design is that rarest of things: an economics PAGE-TURNER.” —Lin-Manuel Miranda 

Market Design Impact Award to Hassidim, Romm, and Shorrer

 The Hebrew University breaks the news with this congratulatory message:

"Congratulations to our very own Assaf Romm  and coauthors! 🎉Assaf, along with Avinatan Hassidim and Ran Shorrer , has been awarded the inaugural INFORMS Auctions and Market Design (AMD) Market Design Impact Award- recognizing major contributions in market design over the past 15 years.
Their groundbreaking work has transformed both theory and practice, from redesigning Israel’s Psychology Master’s admissions and Pre-Military Academy programs to improving the medical internship match, impacting thousands of lives. Beyond implementation, their research revealed how real-world behavior can differ from theoretical predictions, helping to pioneer the field of behavioral market design.
Through innovative design, rigorous theory, and a deep understanding of human behavior, Assaf and his coauthors have shown how market design can address pressing social needs while advancing the field.
👏 Remarkable achievement! "

 

 

 

I expect that a full(er) account will soon be given on the INFORMS  Market Design Impact Award  page 

Experiments and behavioral market design at Pitt (tomorrow)

 I'm flying  back to my old haunts in Pittsburgh today, for (among other things) two events at the University of Pittsburgh tomorrow:

 October 17, 2025 PEEL Reopening Ceremony with Professor Vesterlund & Professor Roth

"The History of PEEL: The Pittsburgh Experimental Economics Laboratory (PEEL) was founded by John Kagel and Alvin Roth, a Nobel Laureate in Economics. Since its inception, PEEL has served as a hub for pioneering research in experimental economics. Notably, the lab contributed to foundational work on market design, which played a significant role in Roth’s Nobel Prize-winning contributions. Over the decades, PEEL has maintained its reputation as a center of excellence, attracting top scholars and fostering innovation in economic research. +

 

October 17, 2025 BEDI Workshop (Behavioral Economics and Design Initiative)

BEDI Workshop - Friday, October 17th, 2025

Breakfast | 8:15 am – 8:45 am
Wesley W. Posvar Hall, 4130, 230 S Bouquet St, Pittsburgh, PA 15213 

Conference Welcome | 8:45 am – 9:00 am
Lise Vesterlund, BEDI Director, Andrew W. Mellon Professor, University of Pittsburgh

Session 1 | 9:00 am – 10:40 am
Erina Ytsma– Assistant Professor, Carnegie Mellon University, “Gender Differences in the
Response to Incentives: Evidence from Academia”
Stephanie Wang – Professor, University of Pittsburgh
Claire Duquennois – Assistant Professor, University of Pittsburgh, “Minority athletic performance,
racial attitudes, and racial hate”
Jonathan Woon – Professor & Associate Dean, University of Pittsburgh, “The Epistemology of
Justice: Awareness and Institutional Choice”

Refreshment Break | 10:40 am – 11:10 am

Session 2 | 11:10 am – 12:00 pm
Jenny Chang – Graduate Student, Carnegie Mellon University, “When Women Self-Promote:
Evidence on Beliefs and Downstream Consequences”
Aden Halpern – Graduate Student, University of Pittsburgh 

Brandon Williams – Graduate Student, University of Pittsburgh
Dhwani Yagnaraman – Graduate Student, Carnegie Mellon University, “Crowd-in and crowd-out of
climate policies”
Aaron Balleisen– Graduate Student, Carnegie Mellon University, “Cheap Talk and Pluralistic
Ignorance”

Lunch | 12:00 am – 1:15 pm

Session 3 | 1:15 pm – 2:30 pm
Osea Giuntella – Associate Professor, University of Pittsburgh, “Beliefs, Resilience, and Leadership: Evaluating Trauma-Informed Training”
John Conlon – Assistant Professor, Carnegie Mellon University, “Memory Rehearsal and Belief Biases”
Alex Chan – Professor, Harvard University, “Preference for Explainable AI”

PEEL Re-Opening + Refreshment Break | 2:30 pm to 3:30 pm

Session 4 | 3:30 pm – 4:45 pm
Alistair Wilson – Professor, University of Pittsburgh, “Veto Delegation: A Mechanism that works! (Kinda)”
Yucheng Liang – Assistant Professor, Carnegie Mellon University, “Asking the Right Questions: Information Acquisition for Choices under Risk”
Muriel Niederle - Professor, Stanford University

 

U.Penn celebrates Judd Kessler's new book with a short excerpt

 You can read an excerpt from the introduction to Judd Kessler's new book Lucky by Design (which came out yesterday) here: 

The Hidden Markets All Around Us
October 14, 2025 • 6 min read
In an excerpt from his new book, 'Lucky by Design,' Wharton’s Judd Kessler looks at the hidden markets that determine who gets what in everyday life, and the rules that underpin them. 

Stanford celebrates 100 years of GSB

 GSB at 100: A Century of Impact, by Michael McDowell  interviews leading faculty members including

"Susan Athey: The GSB has had so many impacts, but let me just pick one particular issue that’s close to my heart, which is that it’s been several times in its history, it’s really been on the frontier of important ideas. One of the big ideas in the group that I’m in was market design and the use of formal strategic thinking and game theory and information economics to understand real phenomena. And Bob Wilson, who’s one of the grandfathers of the group that I sit in, Economics, he worked with oil companies in 1960s and looked at their bidding data and then developed formal theories that helped understand what was going wrong in those markets and how to fix it. And then later, he advised one of my advisors, Paul Milgrom, and they shared the Nobel Prize for some of their work on market design.

"And so, there’s many different takes on that, but one of my takes was that there was the connection to the world and the fact that the problem they were solving was coming out of a real problem leading to cutting edge theory that then created a field that didn’t exist. More recently, we were on the cutting edge of using machine learning for decision problems and what’s called causal inference, formally, and now Stanford is the best place in the world to do this kind of research. To go from zero in 2012 to best in the world with multiple amazing young scholars doing cutting edge research in 12 years is really stunning. And the GSB really supported us in that endeavor.

"So I think the GSB has been a really fabulous place for helping us stay grounded and really connected to real problems, but also allowing us to hire the kind of talent and giving us the space to do the pure research that doesn’t just solve today’s practical problems, but that actually builds the foundation for many people to solve applied problems."

Kidney exchange in Operations Research (and elsewhere)

 Kidney exchange is an important medical innovation that has given rise to literatures not only in medicine but in economics, computer science and operations research. (That diversity of literatures is related to the interdisciplinary growth of market design.)

Here's a new survey of the OR literature on kidney exchange.

Mathijs Barkel, Rachael Colley, Maxence Delorme, David Manlove, William Pettersson, Operational research approaches and mathematical models for kidney exchange: A literature survey and empirical evaluation,  European Journal of Operational Research, 2025, ISSN 0377-2217, https://doi.org/10.1016/j.ejor.2025.08.059.

Abstract: Kidney exchange is a transplant modality that has provided new opportunities for living kidney donation in many countries around the world since 1991. It has been extensively studied from an Operational Research (OR) perspective since 2004. This article provides a comprehensive literature survey on OR approaches to fundamental computational problems associated with kidney exchange over the last two decades. We also summarise the key integer linear programming (ILP) models for kidney exchange, showing how to model optimisation problems involving only cycles and chains separately. This allows new combined ILP models, not previously presented, to be obtained by amalgamating cycle and chain models. We present a comprehensive empirical evaluation involving all combined models from this paper in addition to bespoke software packages from the literature involving advanced techniques. This focuses primarily on computation times for 49 methods applied to 4320 problem instances of varying sizes that reflect the characteristics of real kidney exchange datasets, corresponding to over 200,000 algorithm executions. We have made our implementations of all cycle and chain models described in this paper, together with all instances used for the experiments, and a web application to visualise our experimental results, publicly available.
Keywords: Combinatorial Optimisation; OR in health services; Kidney paired donation; Cycle packing; Computational experiments