Markets are Dead, Long Live Markets

TL;DR

This paper evaluates the practicality of market-based resource allocation in computer systems, emphasizing the importance of integrating economic mechanism design with system design for efficiency.

Contribution

It demonstrates the usefulness of market-based approaches and advocates for combining economic and system design for improved efficiency.

Findings

Market-based resource allocation is effective.

Integration of mechanism design and system design enhances efficiency.

Economic approaches are more relevant than previously thought.

Abstract

Researchers have long proposed using economic approaches to resource allocation in computer systems. However, few of these proposals became operational, let alone commercial. Questions persist about the economic approach regarding its assumptions, value, applicability, and relevance to system design. The goal of this paper is to answer these questions. We find that market-based resource allocation is useful, and more importantly, that mechanism design and system design should be integrated to produce systems that are both economically and computationally efficient.