NEW YORK ( TheStreet) -- Wall Street professionals may dominate trading on stock and bond exchanges, but they are not the only ones making market transactions on a daily basis. Nobel Prize winning economist Dr. Alvin Roth says the digital age has put marketplaces in each of our pockets. 

"Google (GOOG) is a marketplace for ads, Uber for cars and eBay  (EBAY) is a market for things," says Roth, author of the new book "Who Gets What - and Why." "The fact that we now carry marketplaces in our smartphones means that markets are much more accessible than they used to be and this is only the beginning."

Roth says the new "sharing economy" is creating a multitude of new markets. New and different problems come with new markets, however, and sometimes it takes a while for the legal system to catch up with a fast growing market.
"Uber entered a market that had lots of taxi monopolies in separate cities and, loosely speaking, they are ignoring many of the regulations in those jurisdictions," says Roth, adding that "eventually and the rules will catch up."
Roth says Airbnb, which he calls a "giant decentralized hotel", is going through such market-based growing pains as well.
"If you rent your spare bedroom in Manhattan, you may be violating a rule in your condo or co-op," says Roth. "We have to figure out the right allocation of property rights to take care of that."
As for traditional financial markets, Roth says the problem of high frequency trading is a tricky one because "if trading is too slow that's bad, but if it is too fast, that can cause problems too."
"Financial markets they are quite thick, but they work best when people compete on price," says Roth. "Some of high frequency trading competes on speed instead of price because a market that is thick over minutes or seconds can become thin when you look at it over milliseconds."
Roth also says the increased calls for the government to regulate trading in order to slow it down are misguided.
"Markets need good rules in order to be able to work freely. The right discussion is not who should make the rules or how many rules there should be, but what are the right rules to make the market work efficiently?"

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