In “Who Gets What – and Why,” Alvin Roth’s jargon-free clear free writing skills help its readers to navigate the implications and nuances of how the market is designed. Alvin Roth’s wit, prowess, and the case studies he vividly describes in detail are of much importance to the reader. For instance, Roth’s description of how the gastroenterology fellowship’s market (internal medicine residency before the educational step) is “unraveled.” This section is titled: “Finding the Right Guts to Wait.”
The book is packed with fascinating stories, which ranges from the history behind the Oklahoma Sooners’ nickname to the role played by repugnance play in designing the market. “Who Gets What – and Why” is at for once entertaining and supremely entertaining – a rare well-crafted combination for economic texts (Roth, 2015). The paper, therefore, is a summary of the book and discussion of the theme of money. Additionally, the paper will also provide arguments to either in favor or against the hypothesis, which is the pursuit of “money” versus its purchasing power has it represents in the essence of the pursuit of “power.”
A patient diagnosed with a kidney disease visits his doctor with the good news that he has identified a donor would is willing to donate to him one of his (donor) kidneys. However, after a series of tests, the doctor revealed that the match between the donor and the recipient is incompatible. The scenario took place in the Rhode Island Hospital in the presence of two pairs of recipients and donors (Roth, 2015). The surgeons at the Rhode Island came to the realization that one pair of the donors was a chance compatible with a different pair of the recipients vice versa. With both the donors’ and recipients’ permission, the surgeons carried out “exchange” of kidneys.
After all those operations, the seed of what could come to be identified as the “New Program for Kidney Exchange” (NEPKE) was planted. The program is a “matching market” for donor kidneys, which is based on algorithms created by Alvin Roth, the Novel Prize-winning economist (Roth, 2015). The program opposed the commodity markets because the “matching markets” allow both the buyers and sellers the freedom of choice of what to buy, and to who to sell.
In Alvin Roth’s new book, “Who Gets What – and Why,” there is an engaging exploration and identification of the different roles and different types of “matching markets,” which underpin the much the world would operate. In the book, the author, Alvin Roth, devotes the entire chapter to NEPKE’s creation and expansion. According to Roth (2015), it is a market that is not about the money since kidneys’ sales is illegal, even though it has been expanding because of the continual evolution of its rules.
Rules are necessary for the markets’ success. A rule, according to Roth (2015), is at the center of the market design, which is the discipline for which the author, Alvin Roth, is perhaps considered the world’s most pre-eminent markets expert. Some of the politicians talk about the free markets as there is no rule, which is applicable. Additionally, they speak soundly about the free markets as if self-control and self-interest will guarantee markets’ efficiency. Through the many examples in the book, the author shows that rules are required because it is only under favorable conditions that the markets will work. For instance, markets should be thick, which is, there must be enough number of sellers and buyers who actively buy and sell equally for the markets to function. The kidney transplant functioned well because the database of patients and donors was established.
At almost the same time, there is not congestion in the markets. The buyers are required to be in a better position to be able to identify what they need to the market in a timely way. Airbnb travelers, the company that created rooms’ market and personal rooms, which acts as hotel rooms, where interfered with the time of response from the hosts that uses personal computers. The smartphones helped relieve the congestion because the hosts no longer had to wait any longer to examine the computers during the night (Roth, 2015). The markets should also be safe in that both the buyers and the sellers must be guaranteed that they will be duped. Uber experienced challenges, which involved convincing the travelers that car would be made available. Uber convinces both the drivers and passengers that they would wait. The markets that are no longer uncongested or thick would likely to unravel and not meet the expectations of the function.
Themes about Money
Matchmaking: Economic theories focus on the commodity markets whereby any person willing to pay the price achieves anything good. Matchmaking, one of the themes in Alvin Roth’s “Who Gets What – and Why,” dictates that in matching markets, the price of goods does not determine who gets what (Roth, 2015). The willingness to accept a specific payment is one part of a person getting the job but is not the only one. In particular cases, for example, assigning kidneys to carry out dialysis on patients, money and prices is not in the equation.
In his book, “Who Gets What – and Why,” the author worked hard to discover the best and efficient way method of matchmaking and implementation. The theme describes a lot of market malfunctions. The author’s approach to the theme is different from the standard debates over the free markets versus governmental regulation. Matchmaking emphasizes that the markets should be quick, thick, trustworthy, and timely; however, without design markets, it can be thin, ill-timed, slow, and dangerous.
The ultimate solution to some of these problems will likely be on high legislation regulated. In the book, the regulation, which is promoted, is not central to planning, but a way to assist market participants to achieve their purposes. For example, the author was asked to come up with a rule, which will emphasize on efficient matchmaking of the medical students with health centers, and the one that will increase matchmaking in rural hospitals.
Human interactions and behaviors: About market economics, the theme of human interactions and behaviors prompts the author to discuss some ways to assist both the Boston school and New York City interaction systems to focus on ways of improving the connection between students with the best schools, while gaming and strategizing the whole system (Roth, 2015). Roth’s method of establishing improved schools is another example, which emphasizes on improving interaction and behaviors during the selection of the participants during the bowl games at the end of the season. The skills to interactions during matchmaking, for example, are not necessarily a behavioral new phenomenon; however, some of the cases studies how the participants’ behaviors can be recognized and overcome. Human interactions also result in the designing of markets that is “uncongested, thick, efficient, simple, and safe,” which in turn becomes the most effective and the proof is the exchange of kidneys.
Market Design: In the book, “What Gets What – and Why,” the theme of market design dictates that money “is likely to play a small or no role” at all when it comes to a profit-driven commodity market. The market, which draws relevance from matchmaking in turn, benefits the whole society. For example, the theme of the market design is evidenced by the traces of kidney exchange system evolution (Roth, 2015). The book assisted in form to identify the manner in which the approach has improved both the number of the kidney transplant while the market designs and dictates those who are in need of new kidneys. Over a period, market solutions have been established to handle logistical problems that may come around, for example, surgery operating and scheduling facility availability.
Commodity pricing: The theme is focused on kidney exchanges and prices. The driving force behind the theme is the book’s indication that there are a lot of patients that are in need of kidneys (approximately 100,000 still waiting) than there are available donors. For instance, if kidneys performed like commodity markets, then the prices for kidneys would have been made available (Roth, 2015). In such a case, a person with a lot of money would easily transact it from a donor with compatibility. Additionally, someone with a higher buying price would even attract potentially willing partners. However, commodity pricing in such as case does not reflect the society willingness to entertain the idea of repugnancy that is the selling of organs, and possibly its exploitation. It is illegal to transact (buying and selling) organs, which means commodity pricing for the kidney is zero – it should be a gift instead.
The Pursuit of “Money” is not, in Essence, the Pursuit of “Power.”
The arguments presented in the book, “Who Gets What – and Why,” is against the hypothetic idea that the pursuit of money versus the purchasing power, which it represents, is not, in essence, the pursuit of power (Roth, 2015). To draw examples from Roth’s book, the pursuit of money does not guarantee kidney compatibility. As a society, there is the issue of money perceptions and what it can do. There is also the perception that pursuing and having money can guarantee good health, and possibly exploitative. However, the hypothesis is against the illegality of sell or buys an organ, which makes the pursuit and perception of money become zero.
There is also the issue of organ donation. A recipient may not be compatible with a donor from anyone in his or her family or even close friends, who makes the pursuit of money becomes redundant. It is true to say that money comes with having money, by Roth’s book disregard the whole perception of what money can do. Alvin Roth worked on the perception of kidney exchange. The author worked on finding different ways of matching both the patients and donors and not just for paired exchanges.
The whole hypothetic pursuit goes against the essence of pursuing “power.” It also goes against the purchasing power, which it represents as is evidenced by the regulation that there is no central planning when it comes to market participation to achieve what they want with the availability of money, and thus the presence of power (Roth, 2015). For instance, there is the presence of matching sets, which sets the pace for the less need to pursue money, while increasing the population of medical students studying in the rural hospitals. The sealed deals would be undermined when it comes to matching markets stability. What goes against the whole perception also provides lessons that when one want to make it possible to handle matchmaking, he or she has to create or establish incentives to ensure that there are desired matches irrespective of the availability of money or power.
The second half of the book, “Who Gets What – and Why,” focuses on the available offers for clerk laws and the manner in which judges uses their power to self-regulate. Here, the pursuit of money and what it represents when it comes to power is demonized as it reflects with kidney traders. The author, for instance, explains the algorithm traders to be accruing profits with the current market rules. On the other hand, he explains while citing an example of a bad market design, which is characterized by inefficient liquidity providers (Roth, 2015). His argument is based on HFT causes with the providers who fail to identify higher specs for kidney trading due to their inability to trade kidneys with money.
The only instance that the pursuit of money and what it represents will be in alignment with the pursuit of “power” is if the system works based on the trust among the participants that every individual will obey the golden rule. Additionally, if a few individuals would break the rule, then it would inspire other people to disregard the perception. Here, it is important that when the participants do not trust the whole system, but want to participate in it, all of them will play in a strategic manner, which could everybody’s detriment or disadvantage (Roth, 2015). To trust the system, which emphasizes the need to focus on compatibility and not on money, the matching markets should be trusted to bring out the best outcome. If this is not emphasized, the increase in the focus on money will continue while the market may end up falling apart because of misinformation.
Alvin Roth’s book, “Who Gets What – and Why,” focus on the matching markets, by paying attention to the mind-expanding study of the markets, which matters to its readers. The matchmaker skills have been identified not necessarily to be a new phenomenon; however, the case studies has been used in the paper to illustrate how some of the problems have helped shaped the themes I the book. These problems are noted to obstruct the success of matches. The paper also focused on the arguments against the pursuit of “money” versus what it represents as the essence of pursuing “power.” The pursuit of money does not play a huge role in having power over some of the cases, for example, kidney compatibility.
Roth, A. E. (2015). Who gets what–and why: The new economics of matchmaking and market design. Boston: Houghton Mifflin Harcourt.