Navigate Hidden Markets With Judd Kessler - TWMJ #1015

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Dec 21, 2025

Judd Kessler, an influential economist and the inaugural Howard Marks Endowed Professor at Wharton, dives into the concept of hidden markets. He discusses how these markets operate based on rules rather than prices, using examples like concert tickets and organ donations. Kessler explains the role of lotteries and waiting lists in reducing friction and promoting fairness. He highlights AI's disruptive impact on market signaling and the importance of strategic design in daily life. Discover how understanding these hidden systems can help us navigate scarcity.

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INSIGHT

Hidden Markets Govern More Than You Think

Many markets don't use price to allocate goods; they use rules and institutional designs instead.
Understanding those hidden rules changes how you compete for scarce resources.

ANECDOTE

Taylor Swift Tickets As A Case Study

Judd uses Taylor Swift ticketing as a live example of price failing to clear demand.
Ticketmaster and artist rules create other allocation mechanisms that decide who gets tickets.

ANECDOTE

Personal Loss Selling Resold Tickets

Judd recounts buying US Open tickets at face value and then learning Ticketmaster takes 30% on secondary sales.
He lost money reselling and observed how the platform benefits from resales.

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Welcome to episode #1015 of Thinking With Mitch Joel (formerly Six Pixels of Separation).

At a moment when scarcity shapes everything from opportunity to attention, understanding who gets what (and why) has become one of the most consequential questions in modern life. Judd Kessler is the inaugural Howard Marks Endowed Professor at the Wharton School of the University of Pennsylvania, an award-winning economist, and one of the leading thinkers in market design, public policy and behavioral economics. His research examines how rules, incentives, and institutional structures shape outcomes in environments where price alone cannot (or should not) decide allocation, from organ donation systems to education, labor markets, and beyond. Recognized early for his impact, Judd was named one of Forbes' "30 Under 30" in Law and Policy for his work on organ allocation and received the Vernon L. Smith Ascending Scholar Prize in 2021. His first (and new) book, Lucky by Design - The Hidden Economics You Need to Get More of What You Want, distills years of research into how "hidden markets" - those governed by rules rather than prices - quietly determine access to jobs, schools, tickets, healthcare, and even relationships. Judd explores the mechanics of scarcity, the strategic role of lotteries, waiting lists, and signaling, and how individuals unknowingly participate in market design every day. He also examines how AI is beginning to reshape allocation systems, why visible markets increasingly contain hidden layers, and how better design can improve both efficiency and equity. Grounded in rigorous scholarship yet deeply practical, Judd's work reframes luck not as randomness, but as something shaped by systems we can understand and sometimes redesign. Enjoy the conversation…

Running time: 57:59.
Hello from beautiful Montreal.
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Here is my conversation with Judd Kessler.
Lucky by Design - The Hidden Economics You Need to Get More of What You Want.
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Chapters:

(00:00) - Navigating Economic Sentiments. (03:03) - Understanding Hidden Markets. (06:11) - The Dynamics of Scarcity and Value. (08:53) - The Role of Consultants in Hidden Markets. (11:48) - Market Design and Equity. (14:57) - Strategies for Market Participation. (18:11) - The Impact of Social Proof on Demand. (20:54) - Reimagining Market Structures. (31:57) - Creating Scarcity and Demand. (34:28) - Market Design and Allocation Strategies. (36:39) - The Impact of Replicas and Knockoffs. (46:44) - Hidden Markets: Positive or Negative? (49:47) - AI in Market Design. (59:01) - Becoming a Market Designer.