what is considered a planned approach vs market approach?

Question

divide the donations evenly among the three shelters

offer each shelter a virtual budget and have them bid on different items

send all the donations to the shelter that has the least

ask shelters to submit their requests, and decide what to send where based on their answers

Answer 1

A planned approach is one where a policymaker, often within a government, chooses how to allocate the resources. A market-based approach is one where the resources are allocated based on whoever values them more, often using prices as signals.

In this case, only the bidding approach (policy 2) is based on a market approach since ultimately the allocation is not decided by policy makers but by the group with the highest value. All three of the other approaches are planned.