"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 problem- scarcity. 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."
"As the price rises, a bunch of people decide that paying such a high price isn't 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. They're visible because it's 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)."
Markets allocate scarce goods by selecting who gains access when demand exceeds supply. Visible markets use price increases to trim demand, a phenomenon captured by the law of demand, making participation straightforward: decide if the price is worth paying. Many allocation systems are hidden rather than price-driven, requiring knowledge of non-price rules, timing, and strategic behavior. Recognizing the existence of hidden markets and learning their rules enables strategic participation. By seeing the system and playing strategically, individuals can increase their odds of receiving scarce resources and effectively manufacture their own luck within constrained environments.
Read at Fast Company
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