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The Economist as Engineer: Game Theory, Experimentation, and Computation as Tools for Design Economics (2002)
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| Venue: | ECONOMETRICA |
| Citations: | 263 - 28 self |
BibTeX
@ARTICLE{Roth02theeconomist,
author = {Alvin E. Roth},
title = {The Economist as Engineer: Game Theory, Experimentation, and Computation as Tools for Design Economics},
journal = {ECONOMETRICA},
year = {2002},
volume = {70},
number = {4},
pages = {1341--1378}
}
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Abstract
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.
Keyphrases
game theory design economics market design american doctor national resident matching program radio spectrum general working future theoretical research engineering approach principle feature natural complement federal communication commission related kind market complication entry level labor market simple conceptual model theoretical insight computational economics
