New ZEW Research Group "Market Design" Takes up Work

On June 1, 2016, the new Research Group "Market Design" started its work at the Centre for European Economic Research (ZEW) in Mannheim. The group's focus lies on the analysis and optimisation of markets. Its aim is to improve the performance of existing markets by actively shaping market rules. To this end, it examines the peculiarities of each market and identifies their prevailing modes of action.

The group's head, Dr. Vitali Gretschko, explains, "Recently, market design has come to be one of the most important fields of economic research. In addition, market design has a great practical relevance, because it addresses the question of how markets and organisations must be designed in order to make economic activities as efficient as possible and to avoid unnecessary consumption of resources. This is of great importance not only for market makers but also for the economy as a whole."

The Research Group "Market Design" focuses on three main areas. The research area "Design of General Rules for Public Procurement" analyses the optimal design of general rules for public procurement. Public procurement accounts for about 16 per cent of EU gross domestic product. Therefore, even small relative efficiency gains result in savings in the billions, which makes the successful implementation of optimisation measures in this area all the more important. The research area "Auction Market Design" focuses on the analysis and design of specific auction markets. Examples include the public sale of energy, government bonds and mobile radio frequencies. The aim of the analysis of auction markets is to identify optimal auction formats and to examine the extent to which they can be implemented. Finally, the research area "Design of Matching Markets" focuses on the analysis and the design of markets in which the use of money is impossible or undesirable. Prominent examples include the allocation of school and university places or the distribution of donor organs.

For more information please contact

Dr. Vitali Gretschko, Phone +49(0)621/1235-310, E-mail gretschko@zew.de