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EIDOS Institute
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Market Design
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Forming a clearer understanding of the choices open to government in the quest to achieve maximum policy impact will be best achieved through capitalising on the principles of market design, utilising an entirely new set of theoretical and philosophical perspectives aimed at innovation, synthesis and integration across both the marketplace and field of public policy.

The Eidos Research Network represents both a set of theoretical and philosophical paradigms and a ‘kit-bag’ of tools and techniques that:

  • provide new perspectives and vehicles for innovation, synthesis and integration across the economic, social and behavioural sciences;
  • facilitate cross- and inter-disciplinary team research; and,
  • greatly enhance the evidence base to better inform policy formulation, program implementation, and business decisions.

Market design is a growing proportion of the public policy activity in the economic and social sciences. Our search of the international literature identifies more than 900,000 publications and citations including many contributions from our Network members. What differentiates the network from other social science network proposals: Most deliberately - and very explicitly - Eidos thinks that there is significant opportunity to find potential new solutions in integrating market design theory and explicit methodologies into policy design and implementation. This differs from other programs of work which tend to focus on traditional approaches.

For example, if we take this paradigm to exploring homelessness policy solutions we may benefit from segmenting the homeless market by the cause of homelessness, for example:

  1. shortage of affordable accommodation,
  2. emergency response to family violence
  3. long-term mental or substance abuse
  4. remote Aboriginal housing shortage.

Having segmented the homeless ‘market’ an analysis could be applied to determine which homeless may be provided a remedy at least cost. This could also include assessment of how many ‘homeless’ might be affected by different policy choices. The research would inform long term solutions and longitudinal research on causes and remedies:

  • Identify those aspects of homelessness that are amenable to market based solutions;
  • Identify any mechanisms and impediments in that market;
  • Identify any incentives that could be supplied to make the market operate better; and,
  • Identify market based solutions for those sectors of the homelessness challenge that are amenable and strategies for how to remove the impediments.

Eidos believes that stimulating investment in areas of social welfare such as homelessness represents a fresh and innovative way to develop tangible policy outcomes, in addition to fostering the development of markets which interact productively with strong public institutions. By changing the structure and design of the way in which we target and develop public policy responses to pressing social issues such as homelessness, a focus on marketisation, contestability choice architecture and drivers of behavior offers considerable scope for innovation and a dynamic re-thinking of our strategic priorities.

Eidos is working towards providing the platform to generate new knowledge and understanding of those processes through collaborative, cross-disciplinary effort to enhance Australia’s capacity and capability to conduct research.

The market design work program will contribute to Australia's international profile in rapidly developing an integrating research paradigm that matches innovation in ‘blue-sky’ research with policy-relevant and practical, market-useful applications.