PALO ALTO, CA / ACCESSWIRE / November 18, 2021 / What do access to phone broadband, internet advertising, and medical residency matching have in common? The answer might sound surprising, but all three are complex problems with a shared solution: market design.
Photo Credit: Lisa Wiseman
Solving complex problems through market design
While most people might mistake market design for a business strategy, the term refers to the mathematical field of economics that is surprisingly complex.
Market design involves designing algorithms to solve complex, large-scale, multibillion-dollar problems, often related to the allocation of scarce resources. It is already used to effectively make connections in markets such as spectrum auctions, internet advertising, charitable food banks resource allocation, organ donations, and more. In these settings, resource allocations are improved by designing market rules that enable safe, efficient, and mutually beneficial transactions.
Cutting edge research
At the forefront of research and execution in this little-celebrated field is the US-based company, Auctionomics. Today, you can stream movies on your phone because 25 years ago, Auctionomics' co-founder and Nobel prize winner, Paul Milgrom walked into the FCC (Federal Communications Commission) with a floppy disk. His mission? To prove that mobile operators could buy broadband rights more effectively through auctions. Since then, the world has relied on his designs to allocate broadband licenses worth over $100 billion.
Over the years, Auctionomics has forged a name for itself in delivering bespoke solutions designed for large, complex country-wide auction and market design problems. Large bodies such as government organizations and consulting firms hire Auctionomics to help deliver solutions to complex market design problems via simplified front end bidder interfaces.
Auctionomics is making huge strides in the industry, and has so far achieved feats that many companies can only dream of:
- Redesigning the entire gas market in Colombia
- Proposing fishing rights auctions in Chile
- Assessing the likelihood of treasury interest rate manipulation on behalf of the Department of Justice
- Acting as a key player for internet advertising giants and advising bidders worldwide
- Reassigning underutilized radio spectrum from TV operators to mobile operators so that we can all enjoy mobile phone video streaming
Winning while outnumbered
As CEO and co-founder of Auctionomics, Silvia Console Battilana is one of the very few women at the forefront of cutting-edge market design implementation. It is a well-known fact that STEM careers have a well-documented gender representation problem. For example, only 21% ofdoctoral-level Mathematics-related STEM positions are occupied by women. So, how did Silvia end up in such a complex and high-stakes field?
"While studying for my PhD at Stanford, I had started a different company to pay the bills," Silvia recalls. "Paul had been put in charge of PhD student recruitment at the economics department and had asked me for help. Together, we went from performing badly in competitions with Harvard and MIT to getting top students. Shortly after, the mortgage crisis of 2008 hit and the U.S. Treasury had approached Paul to design a solution as he had a patent that fit the job."
In his search for a co-founder to answer the call, Paul reached out to Silvia for a coffee and a chat. He needed someone with technical expertise, social skills and good business acumen and he took a bet on Silvia, a young, promising PhD graduate.
While the banks ended up picking a different solution, the idea for Auctionomics was born and Silvia led the company to design solutions for other high-stakes projects. Her co-founder Paul went on to win the 2020 Nobel prize for his work on market design, including a $19 billion incentive auction designed by Auctionomics.
What does the future hold for Auctionomics?
In the future, Auctionomics wants to tackle bigger, more audacious problems such as solving the worldwide water crisis together with silicon valley climate deep tech investment leader, DCVC. Freshwater is not just limited in supply but it is inefficiently allocated. Using auction design, Auctionomics wants to allocate tradable rights efficiently to competing bodies (towns, industries, etc) within regulatory boundaries.
"We want to see a world in which scarce resources are allocated efficiently. With advanced technologies that allow redefining rights to scarce resources, we can redesign big markets for a fairer future", says Silvia.
Auctionomics wants to explore its full potential by applying its proprietary theories and practices to new and evolving allocation problems. For example, COVID-19 vaccine shortages can be addressed by designing efficient exchanges across space and time for crucial raw materials and manufacturing inputs. Cryptocurrency exchanges can use auction theory to effectively allocate stocks and generate revenue. In our fast-evolving world, auctions for spectrum licenses will transform to accommodate 5G technologies and support small-scale IOT (Internet of Things) and AI (Artificial Intelligence) applications.
These complex problems can only be adequately solved by combining the smartest economists with software engineers using cutting-edge artificial intelligence and machine learning techniques.
Tips for women in STEM and high-stakes careers
"It is possible to make a difference as a mother, and in a high-stakes multibillion-dollar business," Silvia says, having spoken at prestigious universities such as Harvard, Berkeley and Caltech. She's also been named ‘Young Global Leader' at the World Economic Forum, ‘European Young Leader' and made the Business Journal's 40 Under 40 list.
Now with two young daughters, Silvia wants to inspire young women in STEM. To those that find themselves outnumbered, she advises: "While there's gender bias, there are some very supportive men and women out there. Have them as mentor friends and ignore those who make themselves obstacles - as you cannot please everyone."
Success stories like these serve as a reminder that everyone can make a difference - even while outnumbered. Silvia's strength lies in her belief that where there's a will, there's a way, and in knowing that big, bold ambitions always come with pushback. Just because something hasn't been done before, doesn't mean that it cannot be done!
Media Contact
Veronica
+1 (650) 740-9859
Media@auctionomics.com
SOURCE: Auctionomics
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