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- Convenors:
-
Edward Nik-Khah
(Roanoke College)
Gabriel Chouhy
José Ossandón (Copenhagen Business School)
Trine Pallesen (Copenhagen Business School)
Christian Frankel (CBS)
Daniel Breslau (Virginia Tech)
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- Format:
- Traditional Open Panel
Short Abstract:
This panel calls STS work inspecting algorithmic market design. We welcome papers (1) covering the history of algorithmic market design; (2) covering the work of market-designers; and (3) reflecting on how algorithmic market design pushes STS to new and problematic collaborative practices.
Long Abstract:
While the bidding mechanisms for advertisement slots at Facebook and Google come most readily to mind, algorithmic market design orchestrates far more aspects of online platforms. Wherever platform companies deploy matching mechanisms (viz., Airbnb, Uber and eBay), we can find the work of market designers. As work in the social studies of finance have shown, trading in contemporary finance is usually mediated by engineered algorithmic market encounters as well. Similarly, large infrastructures for public goods (e.g., electricity, water, emission certificates) are managed by engineered markets mechanisms. Finally, algorithmic market design is becoming increasingly relevant for the reorganization of marketized areas of policy making (e.g., school matching). This panel takes as its starting point that (1) algorithmic market design is an essential component of critical infrastructures for the digital economy, (2) it consolidates a new expertise in engineering and repairing markets, (3) this expertise represents a basic transformation in how professional economists and computer scientists understand themselves vis-à-vis the market, and (4) that algorithmic market design provokes and challenges how STS have usually understood their own conceptualization and practices vis-à-vis economics knowledge. We welcome contributions addressing the following topics:
· Historical papers covering developments – such as mechanism design, matching markets, the design of auction experiments – that might contribute to our understanding of the history of algorithmic market design;
· Work covering the work of market-designers in different economic areas and countries across the globe, for example, studies of designers of platforms, financial exchanges, energy markets, school-choice mechanisms, and kidney exchange;
· Papers that inspect and reflect on how algorithmic market design provokes consolidated understandings of the market in STS (e.g., performativity approach) and how it might trigger new problematic forms of collaborative practice.
Accepted papers:
Session 1Christian Frankel (CBS) Trine Pallesen (Copenhagen Business School) José Ossandón (Copenhagen Business School)
Short abstract:
To better understand markets used in the government of collective concerns, we study how policy goals and the life of those involved in each area are importantly transformed as relevant issues in the area are problematized through the lenses of market design.
Long abstract:
Algorithmic market design is important for businesses (e.g., the automated auctions used to sell online advertising slots, algorithms that platforms use to manage workers that are not contractually bound). It is equally important for markets for collective concerns: namely, situations where markets – or properties attributed to the market – are used as policy instruments. Our claim is that to understand what algorithmic markets do in the government of collective concerns, we must pay attention to the specific problems market designers respond to, and how policy goals and the life of those involved in each area are importantly transformed as relevant issues in the area are problematized through the lenses of market design. Empirically, the paper inspects two such transformations. A case concerns what economists call ‘matching markets’, in particular, the algorithmic digital instruments governments advised by market designers have implemented in various countries to pair students and schools. Here, we show how, with matching markets, the arcane game theoretical notion of strategy-proofness becomes a goal of school policy. A second case concerns ‘aggregators’, a new actor in energy markets systems engineers turned market designers have introduced with the expectation that will facilitated the integration of renewable sources. We focus on, through the lenses of market engineering, domestic practices become a resource that can be extracted and traded in new ‘markets for flexibility’.
Jérémy Grosman (Research Center for Information Law and Society)
Short abstract:
The paper, documenting the evolution of school-choice problems since the 1990s, uncovers ways scientific and ethical knowledge mingle in economic practices. Namely: I suggest that economists' actual involvement in school choice reforms significantly altered their framing of school choice problems.
Long abstract:
The present contribution explores the ways in which scientific and ethical knowledge entangle within economic practices. More concretely: I propose to document how economists have variously framed and reframed school-choice problems between 1990 and 2020. First, an historical review of the relevant scientific literature enables me (i) to uncover trends sketched by specific questions rising and falling into prominence (e.g. algorithms, tie-breakers, fairness, quotas, etc.) as well as (ii) to excavate the main strategies through which economists attempt to gain knowledge about school choice (e.g. accumulating properties, exploring assumptions, reinterpreting results, documenting strategies). Second, a careful analysis of some economists' trajectories suggests they may have come to develop richer political perspectives (i.e. showing greater attention to ordinary moral or political concerns) and pursue slightly different economic questions (i.e. displaying a subtler articulation of social and scientific significance) once involved in actual school choice reforms (e.g. Parag Pathak, Estelle Cantillon). The research invites me to advance two broader claims. Empirically, political perspectives have framed economic problems (i.e. devising metrics and enlarging inquiries' scope) as much as economic problems have framed political perspectives (i.e. formulating objectives and picking algorithms). Philosophically, economic problems and results appear to both be value-laden, in the following non-trivial sense: their significance seem to intimately depend on social, moral or political presuppositions (e.g. stability, envy-freeness, fairness). Thus, the present research, initially triggered by an empirical study on Belgian school choice reforms, hopes to better our understanding of the school choice problems' formation.
Melchior Simioni (Sorbonne Université OFDT) Steiner Philippe (Sorbonne Université)
Short abstract:
What place matching algorithms can take in the cartography of exchange institutions set up in Polanyi’s The Great Transformation? On the basis of the circulation and processing of information, we propose to introduce two new institutions of exchange: the commons and matching arenas.
Long abstract:
This paper aims at defining matching algorithms as a new institution for the allocation of goods. It takes as its starting point the debate between the proponents of centralized planning and the proponents of decentralized market economy. This debate is crucial not only because it is referred to by theorists of matching markets, but above all because it highlights the importance of collecting and processing the information needed to allocate goods (§1). Secondly, we examine the relational form of matching arenas, summed up by the formula “You choose and you are chosen”, and the social structure that enables it to function as an institution of exchange alongside the market and the plan (§2). The central question, then, is what place this institution can take in the cartography of exchange institutions set up by Karl Polanyi in The Great Transformation. We propose to recompose this cartography on the basis of the circulation and processing of information, to introduce two new institutions of exchange: the commons and matching arenas (§3). We conclude by considering the political dimensions of matching, taking into account its specific form of quantification of the self, and the way in which the individual and the collective are administered (§4).
Nikita Sorgatz (Deutsches Zentrum für Hochschul- und Wissenschaftsforschung)
Short abstract:
This paper wants to help to "[nail] down what it is that the ‘market’ is performing” (Nik-Khah and Mirowski 2019, 269) by looking at the diverse market design practices found in the game industry and the valuation and valorization processes they enable.
Long abstract:
A core insight of Science and Technology Studies is that technical devices are used for different purposes by different social groups (Feenberg 2017, 639; Pinch and Bijker 1984, 415). Those uses can radically depart from the uses intended by their creators. One site of such a re-purposing of markets are games. Ranging from simple bartering to complex simulations of the global economy, games contain a wide variety of markets. Market mechanisms like the Gale-Shapely-Algorithm are used for a variety of purposes from matchmaking to the prevention of unwanted player behaviour. These markets are designed by people from a variety of professions, bringing with them different design criteria and goals. In order to contribute to "[nail] down what it is that the ‘market’ is performing” (Nik-Khah and Mirowski 2019, 269), this paper will give an overview on the diverse uses of markets in video games (including as calculative devices as well as affective (Picard 1995; Schüll 2012) and data generating devices). Because games can contain different overlapping market mechanisms, which are — for lack of a better word — “real” to different degrees, this paper will also add another wrinkle to the multiple markets problem (Frankel 2015). Finally the paper will touch on the work and expertise required to govern, manage and maintain large video game economies after their launch, which includes a variety of scoring and classification practices.
Guillaume Yon (RWTH Aachen University)
Short abstract:
Prices for flights are highly dynamic. This is the outcome of a technologically complex marketplace, with the so-called airlines’ revenue management systems at its core. The paper studies the work of the engineers who built revenue management systems for airlines.
Long abstract:
The paper studies how the engineers who built revenue management systems for airlines work and think, based on 44 in-depth interviews, participation in industry conferences, and an analysis of the technical literature they produced. Revenue management systems emerged in the 1980s United States, as a way for airlines to price discriminate (i.e. to offer the same seat in the same class of service of the same flight at different prices) at industrial scale, and this required the automation of pricing: large datasets for systematic demand forecasting, algorithms for revenue maximization, electronic commerce infrastructure for real-time management of availability. This paper shows: (1) Market design - the field in economics - is nowhere to be found in that story. Ways of thinking, models and tools to build revenue management systems came from operations research, statistics and probability, and computer science. (2) Econometrics took center stage since the 2000s, for the estimation of customers' willingness-to-pay. The paper details the two approaches implemented by airlines: consumer choice modeling using the multinomial logit model, or the estimation of elasticity curves with machine learning techniques. (3) The accuracy of the econometric estimation matters, yet for the marketplace engineers in the airline industry two other dimensions are crucial: data collection and the techno-economics of the marketplace itself. To estimate willingness-to-pay, airlines can use their own historical booking data, or they can use online shopping data gathered on their own website. The later requires moving around powerful middlemen: the global distribution systems.
Edward Nik-Khah (Roanoke College)
Short abstract:
This paper examines three circumstances contributing to the historical development of tech economics: the response of the field of business economics to the ascendance of platform capitalism, the legacy of operations research, and the training received by practitioners in the field of market design.
Long abstract:
Economics have undertaken to perform some of their most significant work on behalf of for-profit platform enterprises—a set of activities now commonly gathered under the heading “tech economics.” The American Economic Association has extolled the “mutual influence between tech companies and economists”; spokespersons have proclaimed the advent of a new scientific field; researchers in artificial intelligence and human-computer interaction have sought to build bridges to this work. Economists claim these activities to be the new wave of market design, offering novel methods of addressing market failures to improve how markets work. But their “designs” do not actually resemble the generic markets of textbook economics, leading some to question whether they should even be understood as “markets.” To illuminate the significance of their ministrations, this paper scrutinizes the respect in which the things that tech economists design are markets, such that they may qualify as candidates for improvement. Moving beyond the published word of such designers, this paper tugs on three threads running through the historical development of tech economics: the response of the field of business economics to the ascendance of platform capitalism, the legacy of operations research, and the training received by headline practitioners in the field of market design. It distinguishes multiple conceptions of markets in terms of epistemological presumptions and assesses them for fit with the platform firm.