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Economics Meets UI Design: Toll Bridge Pricing and P2P Backup Markets

Speaker  Sven Seuken

Affiliation  Microsoft Research and Harvard

Host  Mary Czerwinski and Kamal Jain

Duration  01:16:58

Date recorded  24 September 2009

Market-based electronic systems are becoming increasingly pervasive. When we design new markets, we often use economic theory to guide our design decisions. However, existing economics research has neglected the importance of the user interfaces via which individuals interact with markets. Different user interfaces induce different (psychological) user models which in turn determine how users understand and interact with a market. In networked systems, small changes to the UI can have huge effects on the overall market. Thus, the intersection of UI design and economics is a novel, yet important research area.

In our work we explore this intersection of UI design and economics using two particular examples. The first example is an analysis of the design of a toll bridge pricing mechanism. We illustrate the importance of choosing the right combination of a UI and a compatible business model to achieve certain desirable equilibrium outcomes. Our second example concerns the design of a UI for a P2P backup system. We propose a new design paradigm which we call “hidden markets’’. The primary goal of hidden markets is to hide as much of the complexities of a market from the users as possible. We explore this new paradigm using the P2P backup application and provide results from a usability study. We show that our instantiation of a hidden market is usable, which provides the first evidence that this is a viable paradigm.

Joint work with Kamal Jain, Mary Czerwinski, Desney Tan, and Nikhil Devanur.

©2009 Microsoft Corporation. All rights reserved.
> Economics Meets UI Design: Toll Bridge Pricing and P2P Backup Markets