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Market Design (market + design)
Selected AbstractsKnowledge Market Design: A Field Experiment at Google AnswersJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 4 2010YAN CHEN In a field experiment at Google Answers, we investigate the performance of price-based online knowledge markets by systematically manipulating prices. Specifically, we study the effects of price, tip, and a reputation system on both an answerer's effort and answer quality by posting real reference questions from the Internet Public Library on Google Answers under different pricing schemes. We find that a higher price leads to a significantly longer, but not better, answer, while an answerer with a higher reputation provides significantly better answers. Our results highlight the limitation of monetary incentives and the importance of reputation systems in knowledge market design. [source] Financial Market Design and the Equity Premium: Electronic versus Floor TradingTHE JOURNAL OF FINANCE, Issue 6 2005PANKAJ K. JAIN ABSTRACT We assemble the announcement and actual introduction dates of electronic trading by the leading exchanges of 120 countries to examine the impact of automation, controlling for risk factors and economic conditions. Dividend growth models and international CAPM suggest a significant decline in the equity premium, especially in emerging markets. Consistent with this reduction in the equity premium in the long run, there is a positive short-term price reaction to the switch. Further analysis of trading turnover supports the notion that electronic trading enhances the liquidity and informativeness of stock markets, leading to a reduction in the cost of capital. [source] The Economist as Engineer: Game Theory, Experimentation, and Computation as Tools for Design EconomicsECONOMETRICA, Issue 4 2002Alvin E. Roth Economists have lately been called upon not only to analyze markets, but to design them. Market design involves a responsibility for detail, a need to deal with all of a market's complications, not just its principle features. Designers therefore cannot work only with the simple conceptual models used for theoretical insights into the general working of markets. Instead, market design calls for an engineering approach. Drawing primarily on the design of the entry level labor market for American doctors (the National Resident Matching Program), and of the auctions of radio spectrum conducted by the Federal Communications Commission, this paper makes the case that experimental and computational economics are natural complements to game theory in the work of design. The paper also argues that some of the challenges facing both markets involve dealing with related kinds of complementarities, and that this suggests an agenda for future theoretical research. [source] Knowledge Market Design: A Field Experiment at Google AnswersJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 4 2010YAN CHEN In a field experiment at Google Answers, we investigate the performance of price-based online knowledge markets by systematically manipulating prices. Specifically, we study the effects of price, tip, and a reputation system on both an answerer's effort and answer quality by posting real reference questions from the Internet Public Library on Google Answers under different pricing schemes. We find that a higher price leads to a significantly longer, but not better, answer, while an answerer with a higher reputation provides significantly better answers. Our results highlight the limitation of monetary incentives and the importance of reputation systems in knowledge market design. [source] Marktdesign und Experimentelle WirtschaftsforschungPERSPEKTIVEN DER WIRTSCHAFTSPOLITIK, Issue 2009Axel Ockenfels Institutions matter because they affect incentives, and decision makers respond to incentives. Yet, they do not always do so rationally. Experimental economics complements economic theory by observing the performance of mechanisms in the context of actual decision processes faced by real people. It also answers questions that cannot be answered by theory and field data, tests hypotheses and identifies causalities suggested by theory and field observations, collects facts and phenomena that may stimulate behavioral theories of market design, eases cross-disciplinary cooperation, and communicates economic research to market participants, managers and other real-world decision makers. This article presents selected examples to illustrate how experimental economics may interplay with the more traditional economic toolbox to promote economic engineering both in research and in practice. [source] What Have We Learned from Market Design?,THE ECONOMIC JOURNAL, Issue 527 2008Alvin E. Roth This article discusses some things we have learned about markets, in the process of designing marketplaces to fix market failures. To work well, marketplaces have to provide thickness, i.e. they need to attract a large enough proportion of the potential participants in the market; they have to overcome the congestion that thickness can bring, by making it possible to consider enough alternative transactions to arrive at good ones; and they need to make it safe and sufficiently simple to participate in the market, as opposed to transacting outside of the market, or having to engage in costly and risky strategic behaviour. I will draw on recent examples of market design ranging from labour markets for doctors and new economists, to kidney exchange, and school choice in New York City and Boston. [source] A model of price discovery and market design: Theory and empirical evidenceTHE JOURNAL OF FUTURES MARKETS, Issue 12 2004Michael T. ChngArticle first published online: 11 OCT 200 Price discovery is an essential function performed by derivative markets. For a derivative exchange, its markets' ability to incorporate information into prices to "derive" the underlying asset's value is a key objective of market design. The J. Hasbrouck (1991a) model is applied to examine the design and price discovery of a futures market. First, the model is extended to consider a comprehensive dynamic interaction between the price-size coordinates of orders and trades. Second, floor and screen tick data from LIFFE's FTSE 100 index futures market is used to estimate the two models. The significance of order size variables in the extended model suggests that order flow transparency, which is supported by an electronic trading platform, improves price discovery. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:1107,1146, 2004 [source] | ||||||||||||||||||||||