So I would like to see some organized effort in that direction, which would also give us some information about the elasticity of supply.
I got into this by trying to understand why it’s against the law everywhere to buy and sell kidneys.
Instead, presumably you get to interview bunches of people who would like to work here and you get to hire some of them. Lots of markets clear very early—before lots of information is available. Publishers buy books before the books are written and they don’t really know what they’re getting.
If you’re graduating from law school, you get hired long before you graduate. Before you might know what kind of law you really want to do.
But when you look at the microsecond level, many microseconds can go by with no trades.
So a market that is really thick on a human scale becomes very thin when you look at microseconds.
A guy who is doing really interesting work on financial markets is Eric Budish at the University of Chicago.While Roth’s early research focused on somewhat abstract areas of economics including game theory, over time he has transformed himself into something of a matching market guru.Roth swung by Quartz’s New York offices recently to chat about his new book, , which explains how matching markets work, why almost everyone makes it illegal to buy kidneys, and why it’s increasingly rare for people to marry their high-school sweethearts. Alvin Roth: Once you start looking at marketplaces one of the things you notice is that not all marketplaces are set up so that their job is merely to find a price at which supply equals demand. But lots of markets, even when they have prices as very important parts of the market, don’t set the price so that supply equals demand. Quartz doesn’t hire people by lowering the wage until [only] just enough people want to come work here.Well, we could hardly have the global capitalist economy we have today if you didn’t have a market for capital. You would sign a contract that would voluntarily commit you to be a slave for years.So there are things that used to be okay that are now not so okay.