Today in my econ class we talked about this paper, which discusses Feeding America’s switch from a centralized resource allocation model to a market where local food banks use fake currency to bid on the food they want.
Which was a cool example of market design, but my favorite part was the reactions of the food bank directors. Initially they were really resistant; as one director told the economists:
I am a socialist. That’s why I run a food bank. I don’t believe in markets.
And now everyone is really happy with the system. Especially the aforementioned socialist, who wakes up at 6 am to submit his bids, buys food he thinks is underpriced even if he doesn’t need it hoping to resell it to other food banks, and is generally the most aggressive trader on the market.