Markets are generally an efficient way to organize economic activity, but sometimes natural forces cause markets to unravel and fail. Scott Kominers, the Becker Friedman Institute’s first research scholar, spends a great deal of his time thinking about and testing ways to design markets with better outcomes.
His work suggests methods for achieving fair student assignment in school choice systems with affirmative action and for improving the efficiency of land aggregation for economic development. Kominers has also uncovered relationships among disparate areas of matching theory, a branch of economics widely applied in real-world market design and subject of the 2012 Nobel Prize in Economics. (The Prize went to Alvin Roth and Lloyd Shapley, pioneers of matching; Roth chaired Kominers’s dissertation committee.)
“Market design takes an engineering approach,” Kominers said. “It asks why markets are failing. And then it tries to improve incentives for players on all sides of the market in order to reveal preferences and alleviate frictions—and thus achieve good outcomes for everyone involved.”
While market design is Kominers’s focus, it is only the tip of his intellectual iceberg. Kominers’s interests include game theory, law and economics, eminent domain, the economics of entrepreneurship and market entry, and even ethnomusicology.
Diving Deep Into Research
The Becker Friedman Institute’s research scholar positions are designed to give promising young scholars just out of their doctoral programs time to expand and deepen their research interests. Kominers, who completed his PhD in business economics at Harvard in spring 2011, is taking full advantage of the opportunity.
At one point about six months into his two-year residency, he was working on dozen research papers, including a couple in mathematics, with a number of new projects under development. A list of research ideas jotted on a whiteboard included such varied keywords as “attention”, “privacy”, and “vision.” (Unfortunately for curious visitors, Kominers often lists his projects in code.) Kominers’s most recent paper examines the impact of empty voting on financial markets.
Kominers, a Phi Beta Kappa Harvard math major, said he became an economist “because economics is a field that allows you to pursue and integrate diverse interests.” He came to Chicago in part to learn to apply the theoretical matching models developed in his dissertation. “I wanted to find compelling applications. Chicago is an incredible place to do that because when you are walking down the hall, you are bombarded with links between your work and other parts of economics.”
Kominers described an experience where he ran into Nobel Laureate Robert Lucas, and Lucas asked about Kominers’s current work. Kominers described his recent paper (joint work with Tayfun Sönmez) that uses matching models to guide the design of school choice mechanisms that meet affirmative action goals. Lucas, not satisfied with the explanation, kept asking questions, and Kominers kept rethinking his answers and approach. He walked away with a much clearer sense of his own research.
The Chicago Experience
“Everyone here is passionately interested in economics, and everyone really, truly wants to understand the work, even in fields far from their own,” Kominers said. “My Chicago experience has helped my research style mature. I have gained much more clarity, confidence, and understanding about the links between theory, application, and empirics. Moreover, here you do not get away with anything. People question you and push you. If you cannot answer a question with theory, you had better go out and get the data!”
While energetically pursuing his diverse research interests, Kominers has also been an active contributor to the UChicago economics community. While still at Harvard, he collaborated with Nobel Laureates Gary Becker and James Heckman, as well as several other researchers, to organize a Becker Friedman Institute conference bringing together scholars working in matching and price theory. In 2012, he co-organized a similar conference at the intersection of matching and advanced mathematics.
Kominers is a coleader of the Human Capital and Economic Opportunity Working Group’s Inequality: Measurement, Interpretation, and Policy Network. In a new collaboration with UChicago and Northwestern University faculty, he is a coinvestigator on a National Science Foundation grant exploring the interface between computer science and economics.
So how does Kominers decide which ideas to pursue? Three things count: “I think about structure—if there is something really deep and general in a problem, then I can apply it to other settings. The whole idea of my work in matching theory is to create machinery that can be applied to a range of practical problems.
“Another thing is beauty. Number theory is incredibly beautiful, and I still study it sometimes—just for fun."
Third, he notes, “Impact is something I look for. I want to contribute to our understanding of economics and the real-world problems that economists can solve.”