Auctions and Market Design, Lecture 9: Electricity market design and climate policy, Peter Cramton

Market design combines auction and matching theory with behavioral and experimental economics to design innovative markets to better meet goals. Applications are seen in almost all markets and government programs that assign and sometimes price scarce resources. Market design research leads to a better understand­ing of the incentives that guide behavior. Applications include matching students to schools, interns to hospitals, and kidneys to patients. In settings where prices are used to motivate behavior, auction markets are developed to assign and price scarce resources. Applications include markets in mobile communications, electricity, financial securities, transportation, and emissions.