Market design is a practical methodology for creation of markets of certain properties, which is partially based on mechanism design.[1] In some markets, prices may be used to induce the desired outcomes — these markets are the study of auction theory. In other markets, prices may not be used — these markets are the study of matching theory.[2]
In his 2008, Nemmers Prize lecture, Market Design and Stanford University economist Paul Milgrom commented on the interdisciplinary nature of market design: “Market design is a kind of economic engineering, utilizing laboratory research, game theory, algorithms, simulations, and more. Its challenges inspire us to rethink longstanding fundamentals of economic theory.”[2] Milgrom is, along with fellow Stanford economist Al Roth, one of the founders of modern Market Design.