Wall Street professionals may dominate trading on stock and bond exchanges, but they are not the only ones making market transactions on a daily basis. Nobel Prize winning economist Dr. Alvin Roth says the digital age has put marketplaces in each of our pockets. 'Google is a marketplace for ads, Uber for cars and eBay is a market for things,' says Roth, author of the new book Who Gets What – and Why. 'The fact that we now carry marketplaces in our smartphones means that markets are much more accessible than they used to be and this is only the beginning.' Roth says the new 'sharing economy' is creating a multitude of new markets. New and different problems come with new markets, however, and sometimes it takes a while for the legal system to catch up with a fast growing market. 'Uber entered a market that had lots of taxi monopolies in separate cities and, loosely speaking, they are ignoring many of the regulations in those jurisdictions,' says Roth, adding that 'eventually and the rules will catch up.' Roth says Airbnb, which he calls a 'giant decentralized hotel', is going through such market-based growing pains as well. As for traditional financial markets, Roth says the problem of high frequency trading is a tricky one because 'if trading is too slow that’s bad, but if it is too fast that can cause problems too.' 'Financial markets they are quite thick, but they work best when people compete on price,' says Roth.
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