The histories of seven regional markets for new physicians and surgeons in the United Kingdom are considered. Like the American market, these markets have experienced failures that led to the adoption of centralized market mechanisms. Because different regions employ different centralized mechanisms, these markets provide a test of the hypothesis that the success of the American market is related to the fact that it produces matches which are stable in the sense that no two agents mutually prefer to be matched to one another than to their assigned partners. Even in the more complex U.K. markets, this kind of stability plays an important role. Centralized markets that produced unstable matches in environments in which agents could act upon instabilities fared no better than the decentralized markets they replaced.

The organization of the labor market for medical interns and residents underwent a number of changes before taking its present form in 1951. The record of these changes and the problems that prompted them provides an unusual opportunity to study the forces at work in markets of this kind. The present paper begins with a brief history and then presents a game-theoretic analysis to explain the orderly operation and longevity of the current market, in contrast to the turmoil that characterized various earlier short-lived attempts to organize the market. An analysis is also given of some contemporary problems facing the market. A subsidiary theme of the paper concerns the history of ideas: the problems encountered in the organization of this market, and some of the solutions arrived at, anticipated the discussion of such issues in the literature of economics and game theory.

We examine learning in all experiments we could locate involving 100 periods or more of games with a unique equilibrium in mixed strategies, and in a new experiment. We study both the ex post ("best fit") descriptive power of learning models, and their ex ante predictive power, by simulating each experiment using parameters estimated from the other experiments. Even a one-parameter reinforcement learning model robustly outperforms the equilibrium predictions. Predictive power is improved by adding "forgetting" and "experimentation," or by allowing greater rationality as in probabilistic fictitious play. Implications for developing a low-rationality, cognitive game theory are discussed.

This paper concerns the difficulties associated with establishing a time at which a market will operate. We first describe the experience of several dozen markets and submarkets, from entry-level professional labor markets in the United States, Canada, England, and Japan, to the (American) market for postseason college football bowls. The difficulties these markets have experienced in coordinating the timing of transactions have been decisive in determining how they are organized today. The paper develops a framework in which to address the timing of transactions and the tendency observed in many of these markets for transactions to become earlier and earlier.

The history and organization of the membership recruitment process of American sororities is studied. Like entry-level labor markets studied previously, this process experienced failures that led to the adoption of a centralized matching procedure in which a matching is determined on the basis of preference lists submitted by the agents. Analysis of the rules of the match and of preference lists from 21 matches reveals an unstable matching procedure that gives agents incentives to behave strategically. The analysis also shows how the agents act on these incentives and how the resulting strategic behavior has contributed to the longevity of the matching system and to the stability of the resulting matches.

In a study of alternating offer bargaining with discounting, perfect equilibrium was found to have little predictive power, under the conventional assumption that bargainers' utility is measured by their monetary payoffs. Instead, our data exhibit a first-mover advantage, independent of the equilibrium prediction. However the pattern of rejected offers and counterproposals shows bargainers' utility was not measured by their monetary payoffs: 81 percent of rejected offers were followed by counterproposals that would earn less money. We also reanalyze data from earlier experiments, finding a similar pattern of rejections and counterproposals.

In this reply I describe the unraveling of transaction dates in several markets, including the labor market for new lawyers hired by large law firms. This and other markets illustrate that unraveling can occur in markets with competitive prices, that it can result in substantial inefficiencies, and that marketplace institutions play a role in restoring efficiency. All of these contradict the conclusions of Priest.

Economists have lately been called upon not only to analyze markets, but to design them. Market design involves a responsibility for detail, a need to deal with all of a market's complications, not just its principle features. Designers therefore cannot work only with the simple conceptual models used for theoretical insights into the general working of markets. Instead, market design calls for an engineering approach. Drawing primarily on the design of the entry level labor market for American doctors (the National Resident Matching Program), and of the auctions of radio spectrum conducted by the Federal Communications Commission, this paper makes the case that experimental and computational economics are natural complements to game theory in the work of design. The paper also argues that some of the challenges facing both markets involve dealing with related kinds of complementarities, and that this suggests an agenda for future theoretical research.