7
" But as Airbnb became huge, with lots of hosts and travelers, it became increasingly common to have to make multiple attempts to nail down a reservation. Meanwhile, Airbnb’s main competitors were no longer other small Internet businesses, but giant hotel corporations such as Hilton, Marriott, and Best Western. And one huge advantage these huge hotel chains offer to travelers is speedy confirmation. Their transactions are fast: by phone or on the Web, you can quickly find out whether rooms are still available and book one for the night you want. That’s because all the rooms in, say, a Hilton are managed by a central computer system, so one call lets you check all the rooms at the same time. Imagine instead if you had to call Hilton to inquire about each room individually. On any given call, the only thing the reservation clerk could tell you was whether, say, room 1226 at the San Francisco Hilton was available for the night you wanted. If not, you had to make another call to find out about room 1227, then another for room 1228. Booking a room with an Airbnb host was a little like that. So Airbnb had to figure out how a market with many hosts offering one room at a time could compete more effectively with hotels. Price was obviously important. But it was the spread of smartphones that helped Airbnb close the speed gap, and that may have mattered even more than price. Today, as hosts manage their reservations on their smartphones, they don’t have to wait until they return home to confirm a booking—they just check their phones. They can also, as soon as the room is booked, immediately update their Airbnb listing to remove its availability. That in turn makes it easier for a traveler searching for a room to find one that’s available, even though he or she still has to query one room at a time. Thus smartphones make the home hosting market work better not just because hosts can respond faster but also because they can update their bookings, which makes them more informative. This, too, reduces congestion (fewer rooms appear to be available, and a room that looks available is more likely to actually be so), and as a result helps travelers search more efficiently, with fewer time-wasting false leads. "
― Alvin E. Roth , Who Gets What — and Why: The New Economics of Matchmaking and Market Design
9
" MAKING MARKETS SAFE is one of the oldest problems of market design, going back to well before the invention of agriculture, when hunters traded the ax heads and arrowheads that archaeologists today find thousands of miles from where they were made. More recently, one of the responsibilities of kings in medieval Europe was to provide safe passage to and from markets and fairs. For healthy commerce, buyers and sellers needed to be able to participate in these markets safely, without being waylaid and robbed (or worse) by highwaymen. Indeed, the word waylay captures the act of robbing travelers carrying money or valuables on their way to or from a market. Without some assurance of safe passage, these markets would have failed; they would have been too risky to attract many participants. And if the markets had failed, the kingdoms would have been deprived of the prosperity that markets, and the taxes on them, bring. "
― Alvin E. Roth , Who Gets What — and Why: The New Economics of Matchmaking and Market Design
12
" Another possible solution would be to think about kidney exchange in a global way. There is virtually no kidney transplantation, and little or no access to dialysis, in places such as Nigeria, Bangladesh, and Vietnam, where kidney failure is a death sentence. Presumably, many kidney patients there have willing donors, but in a country such as Nigeria, for example, where fewer than 150 transplants occurred from 2000 to 2010, that willingness doesn’t do patients any good. But suppose we were to offer them access to American hospitals, at no cost? That may sound expensive, but it wouldn’t have to be—indeed, it could be self-financing. Remember that removing an American patient from dialysis saves Medicare a quarter of a million dollars. That’s more than enough to finance two kidney transplants, as well as postsurgical care and medicines. That money could pay for an exchange between an American patient-donor pair and, say, a Nigerian pair. "
― Alvin E. Roth , Who Gets What — and Why: The New Economics of Matchmaking and Market Design
