Market Design and Matching Markets

These flashcards cover key vocabulary and concepts related to market design and matching markets as discussed in the lecture.

Matching Markets

Markets where participants are paired based on preferences, rather than price.

Market Friction

Barriers like search costs and transaction costs that prevent markets from functioning effectively.

Repugnance

A situation where certain transactions are considered morally unacceptable, hindering market emergence.

National Resident Matching Program (NRMP)

An algorithm that matches medical residency candidates with hospitals based on disclosed preferences.

Market Thickness

The number of buyers and sellers in a market; more participants increase the likelihood of finding good matches.

Market Congestion

A problem that occurs when a market is too large, making it hard for participants to process information or make decisions.

Market Safety

The assurance that participants will not be manipulated or misled in a market system.

Alvin E. Roth

Nobel Prize-winning economist known for his work on market design and matching markets.

Organ Donation Market

A market that involves matching donors and patients based on specific criteria, rather than price.

Centralized System

An organized method for matching participants efficiently, reducing friction and improving market outcomes.