The Inner Lives of Markets

Ray Fisman and Tim Sullivan argue that the recent upheaval in how people shop, rent and hire is less a story about technology than about the transformation of markets, resting on theory economists worked out first. Tracing 50 years of economic thought, they connect ideas to familiar businesses, from the auction theory behind Google's ad sales to the models online retailers use against fraud. They question the assumption that efficiency is always good, pointing out that illegal markets often run more efficiently than legal ones. Along the way they explain why a $10,000 used car may fetch $2,000 or less and why it matters that healthy people buy medical insurance.

Reid Hoffman endorsed it for non-economists trying to grasp how markets, including platforms like Amazon, Airbnb and eBay, shape the world.