Division

With the labor landscape facing transformative changes including a decline in the working population—due to the declining birthrate and population aging—and changes in job-hunting rules, improving the labor market through institutional design is becoming an urgent issue. For example, members of the research center  have already put forward specific proposals for improving the system by which medical residents are assigned to their positions, and we aim to pursue further research and implementations in collaboration with real-world institutions in this area. We also plan to engage in collaborative research with various public and private-sector organizations with a view to correcting the trend toward excessively early job hunting among graduates, improving mid-career hiring and the rehiring of people past retirement age, developing the market for mid-career leavers  with high career aspirations (career market design), and increasing human resources efficiency within companies and other organizations.

Education is, needless to say, crucial to modern societies, and an important research theme at UTMD is that of examining how scarce educational resources can be distributed as efficiently and as fairly as possible. For example, to address Japan’s childcare waitlist problem, we hope to further advance our current research in collaboration with local governments with the aim of implementing a solution. Applications we envision for our work include the issue of school choice (i.e., the choice of which public elementary or middle school to attend), high-school and university entrance examinations, and intra-institutional matching problems such as the University of Tokyo’s senior course selection system and laboratory assignments (i.e., which laboratory students are assigned to for graduate work ). We aim to amass institutional knowledge in these areas while carrying out collaborative research with a view to implementing solutions.

This project incorporates appropriate monetary transfer rules into institutional structures to design the desired platforms. Humans have been using forms of auctions such as the ascending-price auction since ancient times. Our project seeks to illuminate the pros and cons of existing rules here in order to propose better designs tailored to the circumstances. Specifically, we are looking at areas such as the rules for allocating and reallocating telecommunications frequency bands intended for a wide range of business uses as well as the development of blockchain platforms for fueling startups through the use of cryptocurrency. Other areas under consideration include the shift to online agricultural markets, the allocation of airline takeoff and landing slots, the electricity market, and the financial system.

Japan experiences a high rate of natural disasters, including earthquakes and flooding, and it is further out on the curve than any other country in terms of population aging and birthrate decline, and this is making its various systems related to disasters, medical care, and nursing care all the more important. The country also has a strong need for systems that are effective in dealing with the threat of coronaviruses and other infectious diseases. This project aims to develop methods for achieving the desirable allocation of medical resources, with examples including implementations of institutional design in organ transplant networks that have advanced outside of Japan , the distribution of vaccines, testing kits and therapeutics for combatting pandemics, the prioritization of testing and inpatient treatment, and the way in which medical triage is handled. Our research in the area of natural disasters focuses on the distribution of emergency relief supplies, the matching of disaster victims and (temporary) housing, and the creation of systems for optimally assigning volunteers (who increase in number sharply immediately after a disaster) to different disaster-stricken areas. We also plan to conduct institutional design research aimed at broadly improving the social safety net, dealing with topics such as the decision to place elderly individuals in special-care nursing homes and the apportionment of food by food banks.

A key aspect of our center’s activities is applying cutting-edge research in game theory and computer science to design good “mechanisms” that are easy for the mechanism’s participants to use while also achieving high performance. These practical applications also inspire new theoretical research at the center. The Theoretical Research Division promotes not only theoretical research with immediate potential for practical use but also a wide range of fundamental research activities. The matching and auction theories that we use for market design today were not developed solely with practical applications in mind; they are also the product of the free exploration of ideas. The Theoretical Research Division thus encourages theoretical researchers to freely explore ideas in a spirit of creativity, with the long-term goal ultimately being to make our society even better.

The 19th-century economist John Stuart Mill predicted a future where, after economic growth reached a certain limit, it would stagnate, and society would transition to a steady state where it seeks not material wealth but rather spiritual fulfillment and cultural development. However, contrary to this prediction, economic growth continues to progress, exacerbating environmental destruction, social inequality, and international conflicts. Ensuring both material and cultural well-being for future generations has become challenging. Therefore, in modern times, it is necessary to comprehensively consider the economy, environment, and society as an integrated whole. While supporting economic growth to some extent, efforts should be made to minimize its environmental impact and ensure fair benefits for all, effectively passing the baton on to future generations.

In response to the demand for sustainability, this project proposes a concept of a circular economy system primarily from the perspective of market design. The aim of the circular economy system is to minimize resource use and waste by reusing waste as resources, thereby reducing environmental burden. This concept includes addressing various critical issues such as energy transition, environmental innovation, CO2 emission reduction, and biodiversity and ecosystem protection. Additionally, considerations must be made for social justice, inequality, international order, governance, and adaptation to climate change-induced disasters.

This project takes a broad perspective and collaborates with other projects within UTMD, such as the auction sector and disaster and healthcare sectors, as well as interdisciplinary research projects from fields beyond economics. It aims to propose policy recommendations that model market designs as crucial components for the concept of a circular economy system.