Markets affect not only economic well-being, but also access to education and jobs. The outcome of markets is determined by the interplay of the market rules and institutions on the one hand, and the behavior of market participants on the other. Market design changes or creates the market rules and institutions. It must account for the actual behavior of market participants to reach the desired objectives. A good understanding of individual choices in strategic situations requires behavioral realism, paying attention to psychological givens and social context. The research unit focuses on the study of market outcomes under rich models of human choice. It makes use of game theory, behavioral economics, and experimental economics.

The work of the unit can be grouped into three main areas.

A. School choice, university admissions, and other matching markets

B. Social norms, ethics, and the origin of behavior

C. Bad decisions in markets