How Artificial Intelligence and Machine Learning Can Impact Market Design
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.
No funding was provided to support this paper. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Paul R. Milgrom
Paul Milgrom is co-founder and chairman of Auctionomics, which was paid to supply software and design services to the US government in connection with the incentive auction described in this paper.
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. 2019