Designing marketplaces in complex settings requires both novel economic theory and
real-world engineering, often drawing upon ideas from fields such as computer science and
operations research. In Discovering Prices, Milgrom (2017) explains the theory and design
of the United States “Incentive Auction” that reallocated wireless spectrum licenses from
television broadcasters to telecoms. Milgrom’s account teaches us how economic designers
can grapple with complexity both in theory and in practice. Along the way, we come to
understand several different types of complexity that can arise in market design.
