Planet Money Summer School Govt 6: When the markets need fixing (Market Design)
Aug 13, 2025
Alex Tadelboim, a market design expert from the University of Oxford, dives into the fascinating world of economics. He explains how markets operate, illustrating their importance with everyday examples. Tadelboim discusses market failures and the vital role of government in correcting inefficiencies. Engaging anecdotes from Alaska's fishing derbies showcase resilience amidst danger. He also explores concepts like transferable quotas and double auctions, shedding light on how these can optimize resource management and reduce inefficiencies in various markets.
AI Snips
Chapters
Transcript
Episode notes
Markets And Government Nudge
- Markets are venues where buyers and sellers interact and reveal supply and demand through prices.
- When markets fail, the government can redesign rules to nudge them toward better outcomes.
Danger Of The 24‑Hour Derby
- The 24-hour halibut derby forced fishermen to race regardless of weather and caused many dangerous trips.
- Deckhand Carcass survived multiple sinkings yet kept returning to the Derby for the cash prize.
Rules Shape Risky Behavior
- Limiting fishing by time created perverse incentives that encouraged risky behavior to maximize short windows.
- Changing the rule structure altered fishermen's risk-taking dramatically.