Peter A. Coles
Assistant Professor of Business Administration
Peter Coles is a member of the Negotiation, Organizations, and Markets Unit at Harvard Business School. Peter's research focuses on entrepreneurial market design - the study of creating for-profit marketplaces. Such marketplaces often require innovations (market rules, information flows, timing adjustments, reputation mechanisms) to resolve longstanding inefficiencies (lack of market thickness, adverse selection, high transaction costs, etc). These innovations can create significant value for market participants, and at the same time offer a promising business model for the entrepreneur.
Peter has recently written cases on prediction markets at Google, strategy at Microsoft's adCenter, the market for carbon credits, pricing and the "market ecosystem" at TheLadders.com, and on numerous other topics. Current projects include the design of a prediction market for drug clinical trials, as well as implementation and analysis of the American Economics Association signaling mechanism, a service intended to streamline the job market for new economists. Peter works with companies in a variety of fields, helping managers develop their marketplace strategy and navigate negotiation challenges.
Peter teaches "The Online Economy: Strategy and Entrepreneurship," a second year course at Harvard Business School he developed along with Professor Ben Edelman. Peter also teaches a doctoral course called "Market Design and Electronic Marketplaces" in the Harvard Economics Department. Prior to this, Peter taught the core negotiation class at Harvard Business School. Also at HBS, Peter convenes a periodic Market Design Workshop, in which practitioners and academics get together to share insights in the functioning of marketplaces.
Peter received his A.B. in mathematics from Princeton University and his PhD in economics from Stanford University.
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Book
| 2012
Auctions, Market Mechanisms, and Their Applications: Second International ICST Conference, AMMA 2011
Peter Coles, Sanmay Das, Sebastien Lahaie and Boleslaw Szymanski
This book constitutes the thoroughly refereed post-conference proceedings of the Second International ICST on Auctions, Market Mechanisms, and Their Applications (AMMA 2011) held in New York, August 22–23, 2011. The 22 revised full papers presented were carefully selected from numerous submissions covering topics such as school choice, markets for housing, energy, advertising, prediction markets, and the theory of market design.
Keywords: Information Management;
computer industry;
internet;
market design;
Citation: Coles, Peter, Sanmay Das, Sebastien Lahaie, and Boleslaw Szymanski, eds. Auctions, Market Mechanisms, and Their Applications: Second International ICST Conference, AMMA 2011. Vol. 80, Lecture Notes of the Institute for Computer Science, Social Informatics and Telecommunications Engineering. Springer, 2012. (Revised Selected Papers.)
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Article
| American Economic Journal: Microeconomics
| Forthcoming
Preference Signaling in Matching Markets
Peter A. Coles, Alexey Kushnir and Muriel Niederle
Many labor markets share three stylized facts: employers cannot give full attention to all candidates, candidates are ready to provide information about their preferences for particular employers, and employers value and are prepared to act on this information. In this paper we study how a signaling mechanism, where each worker can send a signal of interest to one employer, facilitates matches in such markets. We find that introducing a signaling mechanism increases the welfare of workers and the number of matches, while the change in firm welfare is ambiguous. A signaling mechanism adds the most value for balanced markets.
Keywords: signaling;
matching;
cheap talk;
congestion;
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Article
| B.E. Journal of Theoretical Economics
|
Correlation in the Multiplayer Electronic Mail Game
Peter A. Coles and Ran Shorrer
In variants of the Electronic Mail Game (Rubinstein, 1989) where two or more players communicate via multiple channels, the multiple channels can facilitate collective action via redundancy, the sending of the same message along multiple paths or else repeatedly along the same path (Chwe, 1995 and De Jaegher, 2011). This paper offers another explanation for how multiple channels may permit collective action: parties may be able to coordinate their actions when messages' arrivals at their destinations are sufficiently correlated events. Correlation serves to fill in information gaps that arise when players are uncertain of the source of message failure, effectively strengthening messages from one player. This asymmetry in message strength in turn permits cutoff equilibria, where players take action after receiving a minimum number of confirmations.
Keywords: electronic mail game;
networks;
stag hunt;
coordination;
signaling;
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Article
| Journal of Economic Perspectives
|
The Job Market for New Economists: A Market Design Perspective
Peter A. Coles, John Cawley, Phillip B. Levine, Muriel Niederle, Alvin E. Roth and John J. Siegfried
This paper, written by the members of the American Economic Association (AEA) Ad Hoc Committee on the Job Market, provides an overview of the market for new Ph.D. economists. It describes the role of the AEA in the market and focuses in particular on two mechanisms adopted in recent years at the suggestion of our Committee. First, job market applicants now have a signaling service to send an expression of special interest to up to two employers prior to interviews at the January Allied Social Science Associations (ASSA) meetings. Second, the AEA now invites candidates who are still on the market, and employers whose positions are still vacant, to participate in a web-based 'scramble' to reduce search costs and thicken the late part of the job market. We present statistics on the activity in these market mechanisms and present survey evidence that both mechanisms have facilitated matches. The paper concludes by discussing the emergence of platforms for transmitting job market information and other design issues that may arise in the market for new economists.
Keywords: market design;
Market Design;
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Mimeo
| 2012
Optimal Truncation in Matching Markets
Peter A. Coles and Ran Shorrer
Since no stable matching mechanism can induce truth-telling as a dominant strategy for all participants, there is often room in matching markets for strategic misrepresentation. In this paper we study a natural form of strategic misrepresentation: reporting a truncation of one's true preference list. Roth and Rothblum prove an important but abstract result: in certain symmetric, incomplete information settings, agents on one side of the market (the "women") optimally submit some truncation of their true preference lists. In this paper we put structure on this truncation, both in symmetric and general settings, when agents must submit preference lists to the Men-Proposing Deferred Acceptance Algorithm.
We first characterize each woman's truncation payoffs in an incomplete information setting in terms of the distribution of her achievable mates. The optimal degree of truncation can be substantial: we prove that in a uniform setting, the optimal degree of truncation for an individual woman goes to 100% of her list as the market size grows large, when other women are truthful. In this setting, we demonstrate the existence of an equilibrium where all agents use truncation strategies. Compared to truthful reporting, in any equilibrium in truncation strategies, welfare diverges for men and women: women prefer the truncation equilibrium, while men would prefer that participants truthfully report.
In a general environment, we show that the less risk averse a player, the greater the degree of her optimal truncation. Finally, when correlation in preferences increases, players should truncate less. While several recent papers have focused on the limits of strategic manipulation, our results serve as a reminder that without the pre-conditions ensuring truthful reporting, even in settings where agents have little information, the potential for manipulation can be significant.
Keywords: matching;
market design;
truncation;
Market Design;
Marketplace Matching;
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Working Paper
| HBS Working Paper Series
| 2010
The Job Market for New Economists: A Market Design Perspective
Peter A. Coles, John Cawley, Phillip B. Levine, Muriel Niederle, Alvin E. Roth and John J. Siegfried
This paper provides an overview of the market for new Ph.D. economists. It describes the role of the American Economic Association (AEA) in the market and focuses in particular on two mechanisms adopted in recent years at the suggestion of our committee. First, job market applicants now have a signaling service to send an expression of special interest to up to two employers prior to interviews at the January Allied Social Science Associations (ASSA) meetings. Second, the AEA now invites candidates who are still on the market, and employers whose positions are still vacant, to participate in a web-based "scramble" to reduce search costs and thicken the late part of the job market. We present statistics on the activity in these market mechanisms and present survey evidence that both mechanisms have facilitated matches. The paper concludes by discussing the emergence of platforms for transmitting job market information.
Keywords: Cost Management;
Information;
Surveys;
Jobs and Positions;
Job Interviews;
Job Search;
Emerging Markets;
Market Platforms;
Service Operations;
Search Technology;
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Teaching Note
| HBS Case Collection
|
2012
On Two Wheels in Paris: The Vélib' Bicycle-Sharing Program (TN)
Peter Coles
Keywords: Bicycle Transportation;
Bicycle Industry;
Paris;
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Course Overview Note
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2012
(Revised from original 2011 version)
The Online Economy: Strategy and Entrepreneurship - Course Architecture Note
Peter A. Coles and Benjamin G. Edelman
This note provides an overview of the Harvard Business School course "The Online Economy: Strategy and Entrepreneurship." It covers the framework for the course, key principles within each course module, and a synopsis of each case, along with the lessons the case is meant to convey.
Keywords: Business Model;
Business Plan;
Business Education;
Curriculum and Courses;
Entrepreneurship;
Business Strategy;
Information Technology;
Internet;
Online Technology;
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Case
| HBS Case Collection
|
2012
(Revised from original 2012 version)
Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market
Peter Coles, Joshua Gans and Wei-Yuan Yu
Keywords: Entrepreneurship;
Markets;
Online Technology;
Web;
Information Industry;
Information Technology Industry;
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Case
| HBS Case Collection
|
2012
(Revised from original 2011 version)
On Two Wheels in Paris: The Vélib' Bicycle-Sharing Program (Supplement)
Peter A. Coles and Elena Corsi
Keywords: Bicycle Industry;
Paris;
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Case
| HBS Case Collection
|
2012
(Revised from original 2011 version)
On Two Wheels in Paris: The Vélib' Bicycle-Sharing Program
Peter A. Coles, Elena Corsi and Vincent Dessain
Keywords: Bicycle Transportation;
Bicycle Industry;
Paris;
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Case
| HBS Case Collection
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2011
Attack of the Clones: Birchbox Defends Against Copycat Competitors
Peter A. Coles and Benjamin Edelman
Keywords: Competition;
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Teaching Note
| HBS Case Collection
|
2011
Carbon Trading Simulation: Green Cement Inc. (TN)
Peter A. Coles
Teaching Note for 911051.
Keywords: Environmental Sustainability;
Trade;
Decisions;
Risk and Uncertainty;
Production;
Pollution and Pollutants;
Price;
Sales;
Profit;
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Teaching Note
| HBS Case Collection
|
2011
Cork'd: Building a Social Network for Wine Lovers (TN)
Peter A. Coles
Teaching Note for 911026.
Keywords: Social and Collaborative Networks;
Online Technology;
Competitive Strategy;
Web Services Industry;
Food and Beverage Industry;
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Case
| HBS Case Collection
|
2012
(Revised from original 2010 version)
Cork'd: Building a Social Network for Wine Lovers
Peter Coles
Lindsay Ronga and Gary Vaynerchuk are launching Cork'd, an online social network for wine lovers. Despite Gary's status as a celebrity wine connoisseur, the team faces a significant challenge: several other wine social networks are well established and already have large user bases. How can Cork'd gain traction in this crowded space?
Keywords: Entrepreneurship;
Product Launch;
Network Effects;
Market Entry and Exit;
Social and Collaborative Networks;
Competitive Strategy;
Food and Beverage Industry;
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Teaching Note
| HBS Case Collection
|
2011
Prediction Markets at Google (TN)
Peter A. Coles
Teaching Note for 607088.
Keywords: Interests;
Forecasting and Prediction;
Market Participation;
Information Technology Industry;
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Module Note
|
2011
Market Design in Online Businesses
Peter A. Coles
"Market Design in Online Businesses" characterizes the challenges entrepreneurs may face in creating a well-functioning ecosystem of users, and helps equip entrepreneurs with tools to overcome these obstacles. Key principles include ensuring thickness, alleviating congestion stemming from overuse, addressing asymmetric information, ensuring that it is safe and straightforward for users to participate, and designing monetization strategies that do not disrupt, but instead contribute to the well-being of the ecosystem.
Keywords: Entrepreneurship;
Framework;
Information Management;
Market Design;
Problems and Challenges;
Safety;
Strategy;
Online Technology;
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Module Note
|
2011
Mobilizing Networked Businesses
Peter A. Coles and Benjamin G. Edelman
This module note presents six strategies for mobilizing networked businesses.
Keywords: Business Model;
Business Plan;
Entrepreneurship;
Networks;
Internet;
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Supplement
| HBS Case Collection
|
2011
Carbon Trading Simulation: Brown Cement Inc.
Peter A. Coles
This simulation presents students the opportunity to experience firsthand the economics of carbon markets and permit trading. Each student has private role information about a company he or she manages. The student must make decisions about pollution-reducing investments and production levels in the face of uncertainty about pollution permit prices. Students form groups of five, and throughout the exercise students may buy or sell permits within their group. Trading outcomes dictate permit prices, and at the end of trading, each firm calculates profits and pays over pollution penalties as needed.
Keywords: Decisions;
Economics;
Investment;
Business or Company Management;
Market Design;
Pollution and Pollutants;
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Supplement
| HBS Case Collection
|
2011
Carbon Trading Simulation: Black Cement Inc.
Peter A. Coles
This simulation presents students the opportunity to experience firsthand the economics of carbon markets and permit trading. Each student has private role information about a company he or she manages. The student must make decisions about pollution-reducing investments and production levels in the face of uncertainty about pollution permit prices. Students form groups of five, and throughout the exercise students may buy or sell permits within their group. Trading outcomes dictate permit prices, and at the end of trading, each firm calculates profits and pays over pollution penalties as needed.
Keywords: Market Design;
Pollution and Pollutants;
Investment;
Price;
Profit;
Agreements and Arrangements;
Decisions;
Service Industry;
Energy Industry;
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Supplement
| HBS Case Collection
|
2011
Carbon Trading Simulation: Greenpeace
Peter A. Coles
This simulation presents students the opportunity to experience firsthand the economics of carbon markets and permit trading. Each student has private role information about a company he or she manages. The student must make decisions about pollution-reducing investments and production levels in the face of uncertainty about pollution permit prices. Students form groups of five, and throughout the exercise students may buy or sell permits within their group. Trading outcomes dictate permit prices, and at the end of trading, each firm calculates profits and pays over pollution penalties as needed.
Keywords: Decisions;
Economics;
Investment;
Profit;
Business or Company Management;
Market Design;
Risk and Uncertainty;
Environmental Sustainability;
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Supplement
| HBS Case Collection
|
2011
Carbon Trading Simulation: White Cement Inc.
Peter A. Coles
This simulation presents students the opportunity to experience firsthand the economics of carbon markets and permit trading. Each student has private role information about a company he or she manages. The student must make decisions about pollution-reducing investments and production levels in the face of uncertainty about pollution permit prices. Students form groups of five, and throughout the exercise students may buy or sell permits within their group. Trading outcomes dictate permit prices, and at the end of trading, each firm calculates profits and pays over pollution penalties as needed.
Keywords: Decisions;
Economics;
Investment;
Profit;
Business or Company Management;
Market Design;
Risk and Uncertainty;
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Exercise
|
2011
Carbon Trading Simulation: Green Cement Inc.
Peter A. Coles
This simulation presents students the opportunity to experience firsthand the economics of carbon markets and permit trading. Each student has private role information about a company he or she manages. The student must make decisions about pollution-reducing investments and production levels in the face of uncertainty about pollution permit prices. Students form groups of five, and throughout the exercise students may buy or sell permits within their group. Trading outcomes dictate permit prices, and at the end of trading, each firm calculates profits and pays over pollution penalties as needed.
Keywords: Ethics;
Investment;
Markets;
Agreements and Arrangements;
Production;
Corporate Social Responsibility and Impact;
Business and Government Relations;
Environmental Sustainability;
Pollution and Pollutants;
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Case
| HBS Case Collection
|
2010
(Revised from original 2008 version)
TheLadders
Peter A. Coles, Benjamin G. Edelman, Brian J. Hall and Nicole Bennett
Despite strong appeal among job seekers and outside recruiters, TheLadders' corporate job listings seem to lag. Could raising prices help solve the problem? TheLadders considers this strategic paradox.
Keywords: Customer Satisfaction;
Price;
Recruitment;
Job Search;
Marketing Strategy;
Employment Industry;
Citation: Coles, Peter A., Benjamin G. Edelman, Brian J. Hall, and Nicole Bennett. " TheLadders." Harvard Business School Case 908-061, April 2010. (Revised from original April 2008 version.) ( request a courtesy copy.)
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Case
| HBS Case Collection
|
2010
(Revised from original 2008 version)
Microsoft adCenter
Peter Coles and Benjamin G. Edelman
Microsoft considers alternatives to expand its presence in online advertising, especially text-based pay-per-click advertising. Google dominates, and it is unclear how Microsoft can grow, despite considerable technical and financial resources. Microsoft considers a set of alternatives, each with clear benefits but also serious challenges.
Keywords: Online Advertising;
Growth and Development Strategy;
Competition;
Advertising Industry;
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Teaching Note
| HBS Case Collection
|
2010
(Revised from original 2008 version)
Microsoft adCenter (TN)
Peter A. Coles and Benjamin G. Edelman
Teaching Note for [908049].
Keywords: Technology;
Advertising;
Software;
Information Technology Industry;
Citation: Coles, Peter A., and Benjamin G. Edelman. " Microsoft adCenter (TN)." Harvard Business School Teaching Note 908-062, February 2010. (Revised from original April 2008 version.)
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Compilation
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2009
(Revised from original 2006 version)
Skype
Peter A. Coles and Thomas R. Eisenmann
Presents eBay's rationale for its $2.6 billion acquisition in late 2005 of Skype, a fast growing voice-over-Internet protocol (VoIP) provider. Describes Skype's history, technology, business model, and competition, as well as government regulation of VoIP services.
Keywords: Mergers and Acquisitions;
Business Model;
Communication Technology;
Growth and Development Strategy;
Network Effects;
Competitive Strategy;
Internet;
Technology Networks;
Telecommunications Industry;
Citation: Coles, Peter A., and Thomas R. Eisenmann. " Skype." Harvard Business School Compilation 806-165, December 2009. (Revised from original March 2006 version.)
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Teaching Note
| HBS Case Collection
|
2009
(Revised from original 2008 version)
TheLadders (TN)
Peter A. Coles and Benjamin G. Edelman
Teaching Note for [908061].
Keywords: Job Search;
Web;
Employment Industry;
Citation: Coles, Peter A., and Benjamin G. Edelman. " TheLadders (TN)." Harvard Business School Teaching Note 909-005, June 2009. (Revised from original July 2008 version.)
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Teaching Note
| HBS Case Collection
|
2009
Ocean Tomo: Building a Market for Intellectual Property (TN)
Peter A. Coles and Andrei Hagiu
Teaching Note for [709404].
Keywords: Management Teams;
Intellectual Property;
Valuation;
Auctions;
Globalized Markets and Industries;
Resource Allocation;
Banking Industry;
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Case
| HBS Case Collection
|
2009
(Revised from original 2008 version)
Ocean Tomo: Building a Market for Intellectual Property
Peter A. Coles, Andrei Hagiu and Alison Berkley Wagonfeld
Ocean Tomo's management team sought to turn the company into the leading intermediary for intellectual property. Despite its increasingly important role in the global marketplace, IP remained a notoriously illiquid asset—difficult to value, harder to trade, and often underutilized by owners. CEO Jim Malackowski and his colleagues hoped to capitalize on this inefficiency by designing and operating innovative marketplaces for intellectual property. After a successful live IP auction in the spring of 2008 (62% of 85 offered lots were sold for a total of $19.6 million), Ocean Tomo had to decide which of its five business lines to emphasize. Indeed, from its inception, Ocean Tomo had been designed as a "one-stop shop" for IP services, with five interrelated lines of business. Which of these services provided the largest market opportunity for Ocean Tomo? How should the company allocate its scarce resources (it had not sought outside funding yet) in order to get the most leverage going forward?
Keywords: Globalized Markets and Industries;
Intellectual Property;
Resource Allocation;
Auctions;
Market Design;
Service Operations;
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Case
| HBS Case Collection
|
2008
Cambrian House
Peter A. Coles, Karim R. Lakhani and Andrew P. McAfee
Cambrian House builds internet-based products and services by relying entirely on its user community for all aspects of its innovation and new product development process. Users suggest ideas for new products and services and also participate in a monthly voting process to select the best ideas. The company is now considering the deployment of a prediction market to deepen user involvement and commitment in its innovation; however, it is not sure if it is an appropriate strategy for its community.
Keywords: Decision Choices and Conditions;
Voting;
Technological Innovation;
Knowledge Management;
Marketing Strategy;
Open Source Distribution;
Product Development;
Strategic Planning;
Business and Community Relations;
Internet;
Citation: Coles, Peter A., Karim R. Lakhani, and Andrew P. McAfee. " Cambrian House." Harvard Business School Case 608-016, March 2008.
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Case
| HBS Case Collection
|
2007
(Revised from original 2007 version)
Prediction Markets at Google
Peter A. Coles, Karim R. Lakhani and Andrew P. McAfee
In its eight quarters of operation, Google's internally developed prediction market has delivered accurate and decisive predictions about future events of interest to the company. Google must now determine how to increase participation in the market, and how to best use its predictions.
Keywords: Forecasting and Prediction;
Knowledge Sharing;
Knowledge Use and Leverage;
Market Participation;
Information Technology;
Citation: Coles, Peter A., Karim R. Lakhani, and Andrew P. McAfee. " Prediction Markets at Google." Harvard Business School Case 607-088, August 2007. (Revised from original May 2007 version.)
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