Misallocation of scarce resources too often deprives users of them even as others waste their supply. Well-designed markets can overcome such problems by enabling voluntary transactions that allow existing users to retain their allotments while enabling higher-value uses.
STANFORD – In 2010, the United States faced a challenging allocation problem. Demand was surging for a resource vital to daily life, but the available supply was being used by incumbents that had built an important industry around it. Moreover, incremental transfers to new uses were impossible. Could new rules alleviate growing scarcities while respecting existing users’ rights and enabling a voluntary, multi-party reallocation?
STANFORD – In 2010, the United States faced a challenging allocation problem. Demand was surging for a resource vital to daily life, but the available supply was being used by incumbents that had built an important industry around it. Moreover, incremental transfers to new uses were impossible. Could new rules alleviate growing scarcities while respecting existing users’ rights and enabling a voluntary, multi-party reallocation?