Paper 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.

Paper 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’.