Economist as engineer
- from Shaastra :: vol 01 issue 06 :: Nov - Dec 2022
Why tech companies are building strong teams of economists.
Economists have traditionally analysed markets. They are now playing an important role in building them. One result is that technology companies are assembling strong teams of economists to collaborate with engineers. Amazon employs more than 400 economists. Dozens of other international technology companies seek to bring economists into their teams. Why?
The first area where technology companies find economics skills useful is in market design. Most markets have naturally emerged through centuries of economic interactions. Some markets are designed for purpose by companies or governments. There are three issues that matter in market design: the alignment of incentives among various players; the quality of information available to someone who wants to arrive at a decision; and a high level of trust that you will get what you have paid for.