NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

How Artificial Intelligence and Machine Learning Can Impact Market Design

Paul R. Milgrom, Steven Tadelis

NBER Working Paper No. 24282
Issued in February 2018
NBER Program(s):Industrial Organization, Productivity, Innovation, and Entrepreneurship

In complex environments, it is challenging to learn enough about the underlying characteristics of transactions so as to design the best institutions to efficiently generate gains from trade. In recent years, Artificial Intelligence has emerged as an important tool that allows market designers to uncover important market fundamentals, and to better predict fluctuations that can cause friction in markets. This paper offers some recent examples of how Artificial Intelligence helps market designers improve the operations of markets, and outlines directions in which it will continue to shape and influence market design.

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Document Object Identifier (DOI): 10.3386/w24282

Forthcoming: How Artificial Intelligence and Machine Learning Can Impact Market Design, Paul R. Milgrom, Steven Tadelis. in The Economics of Artificial Intelligence: An Agenda, Agrawal, Gans, and Goldfarb. 2018

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