The Role of Characterizations in Market Design

Much of the literature on mechanism design---the study of abstract resource allocation rules---has used an axiomatic approach to describe what is achievable in the design of resource allocation rules. Even though market design problems are often based on such abstract mechanism design problems, they tend to include additional institutional constraints or objectives that are specific to a particular industry or application. Nevertheless, since these constraints and objectives often can be expressed axiomatically, it is not surprising that a significant amount of axiomatic analysis also takes place in the market design literature. In light of this, one should consider the degree to which axiomatic market design research should mimic the style of work that has been done in mechanism design. In particular we discuss the degree to which the market design literature should emphasize axiomatic characterization results as a primary research objective.