Comments on: Can Markets Be Designed?

By: Vladimir Dzhuvinov

Vladimir Dzhuvinov — Mon, 18 Jun 2007 12:07:29 +0000

Markets are human creation. There’s always intent behind them.

By: Rethinking Markets » Blog Archive » Beyond physics and the economic molecule

Fri, 15 Jun 2007 14:40:12 +0000

[...] they be designed if they are found in nature. This was rehearsed recently in its last iteration at Organizations and Markets, and referenced by Braydenbut occurs quite regularly. I think the idea of the ‘natural’ [...]

By: REW

REW — Thu, 14 Jun 2007 02:36:52 +0000

Mr. Briggeman,

Anonymity is a vastly undervalued asset! And if you will permit an inept segue, I must note in this thread that many markets are designed for anonymity in transactions. Begin with the development of US commodity markets at the end of the 19th century. The markets for grains were designed overtly so that a large number of anonymous transactions could occur. This led eventually to the design of derivative markets (futures) that work because of the specificity of the design of the commodity markets. Moreover the options markets are derivatives on the derivatives — anonymous sales of options on anonymous sales of futures contracts on anonymous sales of number 2 yellow corn. These markets did not emerge; they were designed and constructed. No Hayekian process. No Blind Watchmaker.

By: Jason Briggeman

Jason Briggeman — Wed, 13 Jun 2007 18:12:09 +0000

A good comment, Secret Professor W. (You never know, but you just might sell a few more books if you own up to your full identity…) ;)

By: REW

REW — Wed, 13 Jun 2007 16:48:09 +0000

Should Peter and Joe design a market between them, i.e. charging each other tuition? In a meeting with the Dean of Business at the Katholieke Universiteit Leuven, I was introduced to the concept of a “closed pocket” exchange program. In an exchange between two institutions, students pay tuition and fees to their home institution, attend the other, and the repatriate their learning. No tawdry exchange of cash between the ivory towers.

No doubt these arrangements, like the ongoing unpriced exchange between Messers Mahoney and Klein, are socially constructed. Eventually, they are designed (codified in a contract or e memorandum of agreement). But I believe these arose from a long process of experimentation, between dyads over time and across the set of relationships that most universities maintain.

I vote for Hayekian process for the specific case of inter-university exchange. Do we ascribe the same to Mahoney-Klein or is teleology afoot?

By: do sociologists have anything to say about market design? « orgtheory.net

do sociologists have anything to say about market design? « orgtheory.net — Wed, 13 Jun 2007 16:20:31 +0000

[...] at Organizations and Markets, Peter asks, what is meant by market design? The concept seems like an oxymoron. According to the pure [...]

By: Peter Klein

Peter Klein — Wed, 13 Jun 2007 13:58:08 +0000

Joe, my thanks to you as well — when can we begin charging each other tuition?

By: Mike Giberson

Mike Giberson — Wed, 13 Jun 2007 13:50:40 +0000

Thanks for the Mulherin, Netter, and Overdahl cite, which looks interesting, and actually, more generally, thanks for the comments on our posts. I think I must have read Gordon’s review back when I was in graduate school, but I should refresh my memory.

My post represents my instinctive opposition to the propensity of some readers of Hayek to instinctively oppose any attempt to mention “Hayek in one breath and then speak of ‘designing’ a market in the next.” There is a big difference between “planning” or “design” or even “economic engineering” in a local, contextual manner, and the kind of constructivist rationalism that Hayek wrote in opposition to.

By: Joseph Mahoney

Joseph Mahoney — Wed, 13 Jun 2007 11:19:56 +0000

Henry Mintzberg poses the question of planning versus emergence at the firm level and its impacts on firm-level performance, while the Hayek question concerns planning versus “spontaneous ordering” for its impacts on the “Wealth of Nations.”

As Mintzberg often emphasizes there can be emergence (spontaneous ordering) within the firm, and your note suggests that there can be planning decisions concerning markets. As an example, planning can go into markets such as Auction design.

The upshot is that we need to be careful to not unthinkingly substitute “market” for spontaneous ordering, and “firm-level hierarchy” for planning in the conversation within economics and strategy.

Thank you, Peter, for continuing to be part of my education.

By: Market Design « Asymmetry

Market Design « Asymmetry — Wed, 13 Jun 2007 08:57:19 +0000

[...] June 13th, 2007 Peter Klein, at Organizations and Markets, just published an interesting post on Market Design. He asks the following question: “Are attempts to design markets examples of what Hayek [...]