Imagine that tomorrow I show up at the board meeting of a large company and tell them that I have decided to fill the vacant position of Executive Director because I am willing to accept the lowest salary out of all the candidates. I would certainly provide a good laugh in the room and I may even receive some compassion smiles.
The c-level head hunters market is not a price driven market. Unlike the auto market or the stock exchange, where if you have the best price you receive the product, it is mandatory that both parties are willing to carry out the transaction and the identity of the participants in a transaction is the most important element. Professor Alvin E. Roth calls these markets, the matching markets and for his contributions in the matching theory, a different branch of economic science and less known to the general public, he received the Nobel prize for economics.
’’Alvin Roth is an atypical economist and an extraordinary person. Perhaps less known about Al is the fact that he did not received a high school diploma. Instead of going to the high school, he preferred to take courses offered by Columbia University and then obtained his doctorate in operational research from Stanford University at … just 23 years old. Al was a pioneer in experimental economics and his contributions helped establish and recognise this field, and he was awarded a Nobel Prize for these contributions.’’ stated Professor Alexandru Nichifor, one of his collaborators in an interview I took some years ago.
Who gets What and Why by Prof. Alvin E. Roth debates the factors that influence this matching market (the matching algorithms) such as ease of use, their safety, optimal size and congestion.
Such markets are not exceptions and definitely not only in the academic realm. Probably you are accustomed with the most famous ones: UBER, Lyft and AirBnB but more and more platforms are being build based on new technologies to match interests, people and needs. The trend is specific relevance.
Recently we published a news alert on the DBJ platform about the UK-based education startup that launched a new blockchain start-up that makes it easier for students to apply for university. University hopefuls can use the platform, called the Libereka Common Application & Scholarship System (LCASS) to apply to multiple universities and accept scholarships with a single application form.
Vanguard Group is testing a blockchain-powered platform that would allow asset managers to trade currencies without using major banks as intermediaries, Bloomberg reported Thursday.
The currency market handles $6 trillion each day, and is currently dominated by firms like JPMorgan Chase and Citi.
Vanguard’s platform would skirt the banks’ fees through peer-to-peer trading, and has already handled a few trades, a source told Bloomberg.
In San Francisco a ticket exchange platform, Lyte, has secured $15 million in Series A financing to drive the development of the platform and scale operations.
And of course, companies like Tinder is matching partners for convenient encounters.
Matching markets are going to be very important in the new technological advanced world and this caters for convenience and relevance.