Social Science Bites

Al Roth on Matching Markets   The system that runs the ride-sharing company Uber doesn’t just link up passengers and drivers based on price. It also has to connect the two based largely on where they are geographically. It is, says Nobel laureate Stanford economist Alvin E. “Al” Al Roth, a matching market. In this Social Science Bites podcast, Roth explains to interview David Edmonds some of the ins and outs of market matching, starting with a quick and surprisingly simple definition. “A matching market is a market in which prices don’t so all the work,” Roth details, “So matching markets are markets in which you can’t just choose what you want even if you can afford it – you also have to be chosen.” But while the definition is simple, creating a model for these markets is a tad more complex, as Roth shows in offering a few more examples and contrasting them with commodity markets. “Labor markets are matching markets. You can’t just decide to work for Google – you have to be hired. And Google can’t just decid