Paper presentation at CHI 2017 conference. Abstract below. Full paper available at the ACM Digital Library (http://dl.acm.org/citation.cfm?doid=3025453.3025515) and as a freely accessible preprint (http://mobilelifecentre.org/sites/default/files/chi%202017%20market%20design.pdf) For further publications, see: airilampinen.fi/publications "This paper explores an HCI approach to designing markets, with a primary focus on peer-to peer exchange platforms. We draw on recent work in economics that has documented how markets function, how they can be evaluated, and what can be done to fix them when they fail. We introduce five key concepts from market design: thickness, congestion, stability, safety, and repugnance. These lend HCI an analytic vocabulary for understanding why markets may succeed or struggle. Building on prior empirical work, we apply these concepts to compare two well-known network hospitality platforms, Couchsurfing and Airbnb. As a second illustrative case, we use market design to shed light on the challenges experienced by smaller-scale peer-to-peer marketplaces for lending, renting, and selling physical goods. To conclude, we discuss how this kind of analysis can make conceptual, evaluative, and generative contributions to the study and design of exchange platforms and other socio-technical systems."

1. M A R K E T D E S I G N F O R H C I
S U C C E S S E S A N D FA I L U R E S O F
P E E R - T O - P E E R E X C H A N G E P L AT F O R M S
Airi Lampinen and Barry Brown
Mobile Life Centre, Stockholm University
{airi, barry}@mobilelifecentre.org

2. • What might HCI gain from
engaging with market design?
• How can market design
help us understand successes
and failures of peer-to-peer
exchange platforms?
H C I A N D M A R K E T S

3. • A branch of economics focusing
on how to create, operate,
evaluate, and fix markets
• Five key concepts: thickness,
congestion, safety, stability,
repugnance
M A R K E T D E S I G N

4. 1
W H Y M A R K E T S I N H C I ?

5. • Markets as human artifacts – actively designed and
shaped, not free-standing or naturally occuring
• Matching markets – relation-specific, price is not
the only determinant & do not always involve money
• Rather than commodity markets that are
impersonal and driven by price
W H AT K I N D S O F M A R K E T S ?

6. • Auctions and commodity markets
Resnick & al, 2000; Resnick & Zeckhauser, 2002
• Game markets and virtual economies
Lehdonvirta & Castronova, 2014
• Business-to-business markets
Kollock & Russell Braziel, 2006
O N L I N E M A R K E T S

7. • Crowdsourcing
Kulkarni et al, 2012; Dow et al, 2012,
Irani & Silberman, 2013; Salehi et al 2015
• On-demand labour
Teodoro et al, 2014; Thebault-Spieker, 2015;
Raval & Dourish, 2016; Rosenblat & Stark. 2016
• Peer-to-peer exchange
Suhonen et al 2010; Bellotti et al 2014;
Ikkala & Lampinen, 2015; Malmborg & al, 2015
C R O W D S O U R C I N G A N D
P 2 P E X C H A N G E P L AT F O R M S

8. 2
K E Y C O N C E P T S
& C A S E S T U D Y

9. • Focus on smaller peer-to-peer marketplaces
that enable lending, renting, and selling physical
goods
• Persistent fascination with local or niche exchange
arrangements – yet so far, halting success
P E E R - T O - P E E R M A R K E T P L A C E S
F O R P H Y S I C A L G O O D S

10. • Not only a matter of ‘mass’ in terms of
raw number of participants but
the number of potential matches
• A temporal issue: for a market to work
effectively, many people need to
participate at the same time
T H I C K N E S S

11. • Timing: Bringing together the two
sides of the market
• Social proof: Perceptions matter
• Number of potential matches:
Likelihood for successful exchanges
are higher if participants can swap
sides in the marketplace
T H I C K N E S S

12. • A problem resulting from success:
achieving thickness creates the risk
of congestion
• A situation where participants are
not able to review enough
relevant options in a timely
manner to arrive at beneficial
transactions
C O N G E S T I O N

13. • Facilitating participants’ efforts to
negotiate and complete exchange
• Risk of negotiations not resulting in an
exchange – lost time and missed
alternative opportunities
• Risk of outdated information,
especially if participants opt for
alternative markets
C O N G E S T I O N

14. • Having the market organised so that
participants can make decisions based
on reliable information
• Being able to state preferences
honestly without fearing harm
• Signalling: reliable and comprehensive
information is key for successful
matches
S A F E T Y

15. • Risk of disintermediation: transacting
outside of the marketplace
• The geographically local nature of a
marketplace can make the cost of
meeting in-person low
• Invisible exchanges lead to missing
reputational information
S A F E T Y

16. • Transactions that are objected to based on
values and morals
• Sometimes the involvement of money
turns otherwise acceptable transactions
repugnant (objectification & coercion)
• The repugnance of a market depends
on context and on who is judging
R E P U G N A N C E

17. 3
A P P LY I N G
M A R K E T D E S I G N
I N H C I

18. • Encouraging participants
to try multiple roles
• Addressing temporal aspects
of markets (e.g. surge mechanisms?)
• Making it easier for participants to
pull friends to the market by
proposing potential matches
I D E A S F O R D E S I G N :
T H I C K N E S S

19. • What hinders effectiveness? What trade-offs
does improving effectiveness entail?
• The most effective solution may not be what
best serves the values of a marketplace
• Exchange platforms are not powerless to
shape outcomes among participants
C O N S I D E R I N G
A LT E R N AT I V E S

20. “As we start to understand better
how markets and marketplaces work,
we realize that we can intervene in them,
redesign them,
fix them when they’re broken,
and start new ones where they will be useful.”
–Roth, 2015
C O N C L U S I O N