 |
|
|
|||||
Below, Judd Kessler shares five key insights from his new book, Lucky by Design: The Hidden Economics You Need to Get More of What You Want. Judd is an award-winning professor of economics at the Wharton School of the University of Pennsylvania. His research and writing have been featured in leading media, such as The New York Times, The Wall Street Journal, Scientific American, and Harvard Business Review, among others. For his work on organ allocation, Kessler was named one of the 30 under 30 in Law and Policy by Forbes. He has been researching market design for the past 15 years. Whats the big idea? Life is full of hidden markets quietly deciding who gets whatand learning their rules is the real competitive edge. See the system, play it strategically, and you can manufacture your own luck. Listen to the audio version of this Book Biteread by Judd himselfbelow, or in the Next Big Idea App. 1. You are constantly playing in hidden markets all around you. Economists think about the world as a bunch of markets. In each market, people are trying to get something that they want. But we have a problemscarcity. There is rarely enough of what people want to just give it to everyone. So, we need a way to decide who gets access to the scarce resource and who does not. We often decide who gets what by letting the price rise. As the price rises, a bunch of people decide that paying such a high price isnt worth it and they leave the market. (Fewer people wanting something as the price rises is so reliable that economists call it a law of demand.) I call markets that use prices to decide who gets what visible markets. Theyre visible because its easy to see them. And playing in them is also easy: you simply decide whether something is worth the price and then buy it (or not). But scarcity is not always resolved with prices. Some things are doled out by hidden markets that do not rely on prices to decide who gets what. These hidden markets are harder to see and more complicated to play in, but they are all around you. Sometimes prices exist but are set too low to resolve the scarcity: Taylor Swift sold tickets to her most recent tour, the Eras Tour, for an average of $204, but some tickets were as low as $49 each. At those prices, many people would have happily bought each ticket. Some restaurants are so popular that its nearly impossible to get a table. New iPhones used to fly off the shelves the day they were released. Fad toys (most recently the Pop Mart product Labubus) may be incredibly hard to get your hands on. Scarcity is not always resolved with prices. Other times, we decide not to use prices at all: government benefits like public housing, seats in public schools, and library books are not sold to the highest bidder. We dont let price decide who gets life-saving donor organs or access to the last hospital bed or ventilator. In these cases, we still resolve scarcity: some people get the tickets, reservations, products, government benefits, and life-saving medical care while others do not. Those are the hidden markets all around you. They have their own rules, and you need to learn them. 2. You need to learn the market rules. Every hidden market has its own set of market rules. Your first step toward success in hidden markets is learning them. What are the types of market rules? One class is based on the principle first-come, first-served. With first-come, first-served, whoever gets to a product first gets to claim it. But while this principle might sound simple, the market rules it generates take three very different forms. For example, first-come, first-served market rules can take the form of a race. If you want a reservation at The French Laundry, a world-renowned restaurant with three Michelin stars in the Napa Valley of California, you need to secure a reservation for one of its 17 tables in a first-come-first-served race. All reservations for a given month are offered online simultaneouslyif you want to eat there in November, you need to be ready to click quickly at 10 am on October 1st. First-come, first-served market rules can also take the form of a waiting list or line. People who need a life-saving kidney transplant can join a multi-year waiting list for a deceased donor organ through their local transplant center. The longer that they have been waiting, the higher their priority for an organ when it becomes available. If you want to see a masterpiece like the ceiling frescos of the Sistine Chapel, buy high-end apparel at a clothing drop, or just make your way through airport security, youll be standing in a first-come, first-served line. These first-come, first-served market rules all reward arriving early or waiting the longest. But other market rules operate completely differently. Another class of market rules uses lotteries to decide who gets what. The New York City Summer Youth Employment Program gives 100,000 jobs to youth each summer, but still has to turn away tens of thousands of kids. They use a lottery to decide who gets a job and who does not. Lotteries also provide access to spots in the London Marathon, license plates in Beijing, seats in charter schools, and tags to hunt big game. Every hidden market has its own set of market rules. Another class of market rules involves centralized clearinghouses, where you must rank your preferences: telling an algorithm your first choice, second choice, and so on. This is how we decide which kids go to which elementary schools in New York City, how doctors are assigned to residency programs, and how college admissions work in China. Dating markets, labor markets, and private school admissions markets operate with different market rules. I call these markets choose-me markets because you are choosing someone, a firm, or an academic institution. But for a match to take place, you must also be chosen. Every hidden market has its own specific set of market rules. To succeed in a given market, you need to learn them. Once you know how the game is played, you can develop a strategy to win. 3. You might want to settle for silver. Once you have figured out the rules of the game, you can develop an optimal strategy to get what you want. Across many hidden markets, one common strategy you might want to play is what I call settling for silver. This strategy requires acting like something less desirablesomething that is not your real first choiceis at the top of your list. Why might you want to play this strategy? Imagine youre in a first-come-first-served race, like for a restaurant reservation at The French Laundry. Say you really want to have dinner there on a Saturday night in November. All the reservations are going to be released on October 1st at 10 am. And when theyre released, you will race to click on a particular reservation time. Which time should you click first? Your real first choice might be 7:30 pm on Saturday. You might decide to click that time slot first. I call playing that stratgytrying to get the thing you actually want the mostgoing for gold. The problem with going for gold is that its risky. What you want is often popular with many other people. So, when youre racing for that highly desirable reservation slot, youre likely competing with many other diners who want the same thing as you. Settling for silver would mean pretending that an earlier dinner reservation, say 5 pm or even 4:30 pm, is your first choice. If you prefer getting a reservation at 4:30 pm to not getting to eat at the restaurant at all, settling for silver might be the right strategy for you. Since many fewer people will be racing for a 4:30 pm reservation, you are much more likely to get it. The same logic applies in markets with much higher stakes. Many applicants to private colleges in the United States choose to apply early decision, which commits them to attending the school if theyre admitted. Since an early decision application comes with a binding commitment to attend, you can only apply early decision to one school. Colleges like it when you commit to them, so they reward early decision applicants with a higher chance of admission. This strategy requires acting like something less desirablesomething that is not your real first choiceis at the top of your list. So, what school should someone apply to early? They might be tempted to apply to a reach school early decision. This could be the right move. But if the candidates chance of admission is exceedingly slim, then even if its their top choice, it might be suboptimal to apply there early. Rather than trying to go for gold, they might do better settling for silver by applying to a less selective school early. This way, they can take advantage of their improved admissions chances at their second-, third-, or fourth-choice school. 4. You might want to double dip and multi-list. Another strategy that comes up regularly in hidden markets is what I call double dipping. This strategy involves simultaneously playing in a market multiple times. Double dipping is a common strategy in markets that use lotteries. The U.S. Diversity Visa Lottery has historically offered visas to those from countries that dont send many immigrants to the U.S. The program selects applicants by lottery and gives winners a chance to come to the country and get a green card. But the lottery lets you bring your whole family if you win, so a married couple does better if they each submit an entry: if either of them wins, the whole family gets to come to the U.S. When you enter a theater ticket lottery, you can usually enter for a chance to win two tickets. If you want to go to the theater with a friend, then you should double dip. You should both enter the lottery, effectively doubling your chances of seeing a show. Allowing double dipping can be good for the efficiency of the lottery overall. People who are more motivated are more likely to put in the extra effort needed to play this strategy. Allowing double dipping gives people who care more about winning a higher chance of success. A related strategy is called multi-listing. If there are a limited number of daycare slots in your city and lots of families who want them, spots may be offered on a first-come, first-served waiting list. In that case, you might want to add yourself to waiting lists at multiple daycare centers to increase the chance that you will have secured a spot for your tot when you need it. And people in need of life-saving organ transplants may decide to multi-list by adding themselves to organ waiting lists through transplant centers in different regions. Since being affiliated with a transplant center closer to a deceased donor organ increases the chance you get offered it, being on waiting lists at multiple transplant centers increases the number of organs you get offered. In that case, multi-listing could save your life. 5. You are a market designer! Many hidden markets are designed by others, and you just have to learn the rules to try to get what you want. But there are also hidden markets that you control, like the hidden market for your time and attention or the hidden markets for household resources. You get to decide which emails you respond to promptly, which friends to call back and which to ignore. At home, you get to decide how to allocate everything from financial resources to the television remote to desserts for your kids. In these cases, you get to set the market rules. As a market designer, you can prioritize the three Es in your hidden markets: Efficiency: Not wasting resources and giving resources to people who value them most. Equity: Distributing resources as equally as possible to market participants. Ease: Letting market participants be honest about what they want and not putting them through an ordeal to get it. Good market rules strive to get as close as possible to achieving all three. Efficiency might mean prioritizing email responses where your prompt reply will be most helpful to the recipient: perhaps someone who is actively working on a project and will be more productive once they receive your feedback. It could also mean devoting your limited time to whatever your highest-return activity is today, rather than to a recurring meeting you put on your calendar months ago, which canand probably shouldbe skipped. Equity might require giving people whom you want to treat fairly the same amount of time, attention, and resources, rather than (intentionally or unintentionally) favoring the one who is most demanding. Finally, in some markets, we can make more of a scarce resource by how we prioritize access to it. In some countries, people who register as organ donors receive higher priority for organs if they ever need one. Similarly, during the Covid-19 pandemic, we prioritized medical treatmentlike the last hospital bed or ventilatorfor medical professionals serving on the front lines. These priority systems help ensure that we allocate more of the scarce resources we have. The same logic applies to your time and attention. Prioritizing some of it for yourself (perhaps for self-care) can also mean theres also more to go around. Enjoy our full library of Book Bitesread by the authors!in the Next Big Idea App. This article originally appeared in Next Big Idea Club magazine and is reprinted with permission.
Category:
E-Commerce
I just launched a wine app, which means I’ve spent the last six months thinking obsessively about one thing: how do you remove friction from decisions that shouldn’t be hard? The answer taught me something bigger about rituals, and why so many of the ones we create at the end and beginning of the year fail us. Here’s my founder story, but from the wine aisle. Last December, I was standing in front of a wall of bottles, paralyzed. Not because I don’t like wine. I do. I was paralyzed because the entire experience was designed to make me feel small. The sommelier energy, the gatekeeping language, the implied message that if I couldn’t name the terroir, I didn’t deserve a good bottle. So I did what I always did: grabbed the same safe choice, went home, and told myself I’d “branch out next time.” But here’s the founder insight I missed: I wasn’t actually going to branch out. The friction was too high. The stakes felt too real. So I’d repeat the same ritual, the same bottle, the same outcome, because at least it was safe. This is exactly how most people approach their end-of-year and New Year rituals. They feel obligatory. Performative. Exhausting. You’re supposed to reflect deeply, set 10 ambitious goals, create a vision board, establish a meditation practice. It all sounds great in theory. In practice? Most people abandon their resolutions by January 15th. Here’s why: we’re designing rituals for the person we think we should be, not the person we actually are. As a founder, I’ve learned that the best products remove friction around what people actually want to do. The same principle applies to rituals. So instead of telling you to rethink your entire approach, here’s what actually works: 1. Audit Your Rituals for Performance vs. Authenticity Before the New Year, write down your current rituals and practices. Your morning routine. Your goal-setting process. Your end-of-day wind-down. The commitments you’ve made to yourself. Now ask: Which of these would I do if nobody was watching? Which ones feel authentic to how I actually want to live? If your answer is “honestly, not many,” you’ve identified your problem. You’re living someone else’s ritual. I built Theodora because I realized I was performing wine expertise instead of just enjoying wine. Once I removed that performance, everything changed. 2. Replace Goal-Setting with Three Core Questions Instead of your 10-goal action plan, try this framework: What do I actually spend time on when nothing is required of me? (What you’re naturally drawn to.) Who do I want to spend more time with? (What relationship matters.) What outcome would make 2026 feel like a win, stripped of all performance? (What success actually looks like to you, not what it’s supposed to look like.) Write these down. These three answers are your real ritual. Everything else is just context. Most people I know abandon their New Year’s resolutions because those resolutions were designed by someone else’s standard of success. When you build from what actually matters to you, the rituals stick. 3. Identify Your Friction Points and Remove Them As I was building the app, I asked myself: What stops people from choosing wine they love? The answer was friction: too many options, unclear labels, judgment if you didn’t know the language. So I removed it. Simplified the decision. Let people be honest about what they wanted. Do the same with your rituals. What gets in the way when youre setting your goals? Dont judge yourself for not being disciplined enough and instead build systems that are easy for you. Is it that you hate planning spreadsheets? Don’t use them. Is it that you feel guilty about not journaling? Don’t journal. Find the practice that actually works for your brain and your life, not the one that looks good on Instagram. The people I respect most aren’t the ones with the fanciest routines. They’re the ones whose rituals are so well-designed for their actual life that the rituals almost disappear. They just work. Here’s the bottom line for anyone building a 2026 strategy, whether that’s business goals, leadership development, or personal goals: Stop designing your rituals for who you think you should be. Stop performing. Audit what’s actually working, build from what you genuinely care about, and remove the friction that’s keeping you stuck repeating last year’s choices. Good rituals don’t feel like work. They feel like they were made for you, because they were. As we head into the New Year, that’s the framework I’m offering: Stop trying to look the part. Start designing the rituals that actually move you forward. Everything else is just noise.
Category:
E-Commerce
Porsche is recalling 173,538 vehicles in the U.S. as the rearview camera image may not display when the vehicle is placed in reverse, the U.S. National Highway Traffic Safety Administration said on Wednesday. This is one of the largest single safety recalls issued by Porsche Cars North America in recent years, following a 2022 recall pertaining to missing headlight adjustment screw covers that affected 222,858 vehicles. The current recall affects certain 2019-2025 Cayenne, Cayenne E-Hybrid, 2020-2025 911, Taycan, 2024-2025 Panamera, and 2025 Panamera E-Hybrid models. The regulator flagged that the vehicles fail to comply with the Federal Motor Vehicle Safety Standard’s requirement for rear visibility. Dealers will update the driver assistance software, free of charge, the regulator said. Earlier this year, the NHTSA also issued recalls of Hyundai Motor America, Ford Motor, Toyota Motor, and Chrysler vehicles over similar rearview camera issues that may fail to display, increasing the risk of a crash. Ruchika Khanna and Aatreyee Dasgupta, Reuters
Category:
E-Commerce
All news |
||||||||||||||||||
|
||||||||||||||||||