David Grether, 1938-2021

 David Grether, a pioneer in experimental economics at Caltech has died.

Here's the initial Caltech announcement, promising more to come: 

David Grether, Caltech Frank Gilloon Professor of Economics, Emeritus, passed away on September 12. He was 82.

The paper of his that I remember best (and that I have taught whenever I cover preference reversals) is his incentivized replication of the preference reversals first noticed in hypothetical choice psychology experiments:

Grether, David M., and Charles R. Plott. "Economic theory of choice and the preference reversal phenomenon." The American Economic Review 69.4 (1979): 623-638.

Here are the papers he listed prominently on his web page:

SELECTED PUBLICATIONS

"Mental Processes and Strategic Equilibration: An fMRI Study of Selling Strategies in Second Price Auctions" with C. Plott, D. Rowe, M. Sereno and J. Allman Experimental Economics Vol. 10 (2007) pp. 105-122

Sequencing strategies in large, competitive, ascending price automobile auctions: An experimental study with Charles R. Plott  Journal of Economic Behavior and Organization Vol. 71 (2009) pp.75-88 http://dx.doi.org/10.1016/j.jebo.2009.02.018

The preference reversal phenomenon: Response mode, markets and incentives, with James Cox. Economic Theory 7 (1996): 387-405.

Individual behavior and market performance. American Journal of Agricultural Economics 76 (1994): 1079--1083.

Are people Bayesian? Uncovering behavioral strategies, with Mahmoud A. El-Gamal. Journal of the American Statistical Association 90 (1995): 1127-1145.

School choice in Latin America, in BBC News Mundo

 A news story with an unusually detailed account of school choice algorithms discusses some of the issues in Latin America, in Spanish, in BBC News Mundo. (Google translate does an adequate job...).  One of the issues discussed is that geographic priorities for schools give wealthier families an advantage, and perpetuate geographic segregation.

Qué es el Mecanismo de Boston y por qué expertos denuncian que hay segregación en las asignaciones de escuelas en América Latina  Analía Llorente  BBC News Mundo

[G translate: What is the Boston Mechanism and why experts denounce that there is segregation in school assignments in Latin America]

Some snippets:

"The Boston mechanism allows for a lot of parenting strategy and that means that it generates a lot of inequalities " [says] Paula Jaramillo, Associate Professor in Economics at the Universidad de los Andes in Colombia

...

"The criticism is against the Boston Mechanism because it continues to be applied, but it is also against the deferred acceptance method because it is generating segregation at the neighborhood level," says Caterina Calsamiglia, a leader in the investigation of these methods.

"The specialist refers to the fact that a student obtains more points for his proximity to the preferred school, therefore he has a greater chance of being admitted to it.

"This creates one of the main strategies is the moving neighborhood, decision can only carry out families with middle income to high, creating inequality."

...

"In many places in Latin America the selection method is not even regulated, and where it is, they are not very transparent with parents in communicating the methods.

"We know a lot about what is done by cities in the United States, in Europe, in Asia, we don't know so much about Latin America," says Paula Jaramillo.

...

"In conclusion, the experts believe that there is no magic method that can be applied uniformly in the countries of the region to avoid segregation and inequality in school selection.

"They agree that the deferred acceptance method is the "fairest" but not perfect. There are many factors to take into account from the quality of the schools to their location."

Market design (I talk to the entering Ph.D. class at Escola Nacional de Administração Pública)

 Yesterday I gave what I think was the first lecture to the entering class of Ph.D. students at the Escola Nacional de Administração Pública (ENAP) in Brasilia.  I spoke about market design, using as my main examples school choice and kidney exchange.  Afterwards there was Q&A on a variety of subjects, including black markets and repugnance.

Here's a video (I start to speak around minute 8):

Compatible pairs are (slowly) benefitting from kidney exchange

 Two articles forthcoming in the American Journal of Tranplantation consider the slowly increasing use of kidney exchange by compatible pairs (which is a good thing, but has been a long time in coming).  Compatible pairs can get better-matched kidneys through exchange (which has long term benefits), and because compatible pairs are largely easy to match, they additionally help create matches for hard to match pairs.

Motivations and outcomes of compatible living donor-recipient pairs in paired exchange, by Valerie Chipman, Matthew Cooper, Alvin G. Thomas, Matthew Ronin, Brian Lee, Stuart Flechner, David Leeser, Dorry L. Segev, Didier A. Mandelbrot, Tyler Lunow-Luke, Shareef Syed, Garet Hil, Chris E. Freise, Amy D. Waterman, Garrett R. Roll  First published: 01 September 2021 https://doi.org/10.1111/ajt.16821

This article has been accepted for publication and undergone full peer review but has not been through the copyediting, typesetting, pagination and proofreading process, which may lead to differences between this version and the Version of Record. Please cite this article as doi:10.1111/ajt.16821

Abstract: Increasing numbers of compatible pairs are choosing to enter paired exchange programs, but motivations, outcomes, and system-level effects of participation is not well described. Using a linkage of the SRTR and National Kidney Registry, we compared outcomes of traditional (originally incompatible) recipients to originally compatible recipients using the Kaplan-Meier method. We identified 154 compatible pairs. Most pairs sought to improve HLA matching. Compared to the original donor, actual donors were younger (39 vs. 50 years, p<0.001), less often female (52% vs. 68%, p<0.01), higher BMI (27 vs 25 kg/m², p=0.03), less frequently blood type O (36% vs. 80%, p<0.001), and had higher eGFR (99 vs. 94 mL/min/1.73 m², p=0.02), with a better LKDPI (median 7 vs. 22, p<0.001). We observed no differences in graft failure or mortality. Compatible pairs made 280 additional transplants possible, many in highly sensitized recipients with long wait times. Compatible pair recipients derived several benefits from paired exchange including better donor quality. Living donor pairs should receive counseling regarding all options available including kidney paired donation. As more compatible pairs choose to enter exchange programs, consideration should be given to optimizing compatible pair and hard-to-transplant recipient outcomes.

***************

Rethinking incompatibility in kidney transplantation  Kyle R. Jackson, Dorry L. Segev

First published: 31 August 2021 https://doi.org/10.1111/ajt.16826

This article has been accepted for publication and undergone full peer review but has not been through the copyediting, typesetting, pagination and proofreading process, which may lead to differences between this version and the Version of Record. Please cite this article as doi:10.1111/ajt.16826

Abstract: Donor/recipient incompatibility in kidney transplantation classically refers to ABO/HLA-incompatibility. Kidney paired donation (KPD) was historically established to circumvent ABO/HLA-incompatibility, with the goal of identifying ABO/HLA-compatible matches. However, there is a broad range of donor factors known to impact recipient outcomes beyond ABO/HLA-incompatibility, such as age and weight, and quantitative tools are now available to empirically compare potential living donors across many of these factors, such as the living donor kidney donor profile index (LKDPI). Moreover, the detrimental impact of mismatch at other HLA antigens (such as DQ) and epitope mismatching on post-transplant outcomes has become increasingly recognized. Thus, it is time for a new paradigm of incompatibility that considers all of these risks factors together in assessing donor/recipient compatibility and the potential utility for KPD. Under this new paradigm of incompatibility, we show how the LKDPI and other tools can be used to identify donor/recipient incompatibilities that could be improved through KPD, even for those with a traditionally ‘compatible’ living donor.

A living kidney donor podcast by Ned Brooks

 Here's a link at which you can hear Ned Brooks, on the latest episode of Donor Diaries. 

"Ned is a high-profile activist for living kidney donation and the founder of The National Kidney Donors Organization.  Ned’s appearance on Freakonomics podcast and his TEDx Talk on living kidney donation are often mentioned by living kidney donors as an early inspiration for their donation."  

https://www.donordiaries.com/episodes

David Cooper to lead Econ at Iowa

 Iowa celebrates David Cooper as new head of Economics. (Iowa was a leading department in experimental economics, in the early days of experiments in economics).

Experimental economist David J. Cooper is new head of Tippie Department of Economics

"David J. Cooper, a leading researcher and widely published author in experimental economics, is the new departmental executive officer for the Department of Economics at the Tippie College of Business.

"Cooper, 54, comes to Iowa after 14 years on the faculty of the Florida State University College of Social Sciences and Public Policy. He has been the director of Florida State’s experimental social sciences cluster since 2011.

Amy Kristof-Brown, dean of the Tippie College of Business, says Cooper’s scholarly record as an experimental economist and his administrative experience running Florida State’s experimental social sciences cluster stood out.

...

"Cooper says that Tippie’s Department of Economics was one of the top 25 in the nation when he was in graduate school, and he said he is eager to lead a department that once produced such legendary economists as Frank Knight, Edward Chamberlin, and Howard Bowen, who would go on to become president of the University of Iowa.

“My goal is to build a cohesive group of researchers and give the department the recognition it once had,” he says."

Matching theory in the September issue of Games and Economic Behavior

 The September 2021 issue of Games and Economic Behavior (Volume 129, Pages 1-590) has five papers on matching theory.

In the order in which they appear:

An improved bound to manipulation in large stable matches  by Gustavo Saraiva

https://doi.org/10.1016/j.geb.2021.05.005Get rights and content

Abstract: This paper builds on Kojima and Pathak (2009)'s result of vanishing manipulability in large stable mechanisms. We show that convergence toward truth-telling in stable mechanisms can be achieved much faster if colleges' preferences are independently drawn from an uniform distribution. Another novelty from our results is that they can be applied to competitive environments in which virtually all vacancies end up being filled. So this paper adds evidence to the fact that, though stable matching mechanisms are not entirely strategy-proof, in practice, when the number of participants in the market is sufficiently large, they can be treated as being effectively strategy-proof.

*************

How lotteries in school choice help to level the playing field by Christian Basteck, Bettina Klaus, Dorothea Kübler

https://doi.org/10.1016/j.geb.2021.05.010Get rights and content

Abstract: School authorities in the UK and the US advocate the use of lotteries to desegregate schools. We study a school choice mechanism employed in Berlin where a lottery quota is embedded in the immediate acceptance (IA) mechanism, and compare it to the deferred acceptance mechanism (DA) with a lottery quota. In both mechanisms, some seats are allocated based on academic achievement (e.g., grades), while seats in the lottery quota are allocated randomly. We find that, in theory, a lottery quota strengthens truth-telling in DA by eliminating non-truth-telling equilibria. Furthermore, the equilibrium outcome is stable for DA with a lottery but not for IA with a lottery. These predictions are borne out in the experiment. Moreover, the lottery quota leads to more diverse school populations in the experiment, as predicted. Students with the lowest grades profit more from the introduction of the lottery under IA than under DA.

**********

Substitutes and stability for many-to-many matching with contracts  by Keisuke Bando, Toshiyuki Hirai, Jun Zhang

https://doi.org/10.1016/j.geb.2021.07.002Get rights and content

Abstract:We examine the roles of (slightly weakened versions of) the observable substitutability condition and the observable substitutability across doctors condition of Hatfield et al. (2021) in many-to-many matching with contracts. We modify the standard cumulative offer algorithm to find stable outcomes and prove new results on the existence of stable outcomes. It is remarkable that size monotonicity at the offer-proposing side is essential for the existence result under observable substitutability across doctors.

*************

Slot-specific priorities with capacity transfers  by Michelle Avataneo and BertanTurhan

https://doi.org/10.1016/j.geb.2021.07.005

Abstract: In many real-world matching applications, there are restrictions for institutions either on priorities of their slots or on the transferability of unfilled slots over others (or both). Motivated by the need in such real-life matching problems, this paper formulates a family of practical choice rules, slot-specific priorities with capacity transfers (SSPwCT). These rules invoke both slot-specific priorities structure and transferability of vacant slots. We show that the cumulative offer mechanism (COM) is stable, strategy-proof and respects improvements with regards to SSPwCT choice rules. Transferring the capacity of one more unfilled slot, while all else is constant, leads to strategy-proof Pareto improvement of the COM. Following Kominers' (2020) formulation, we also provide comparative static results for expansion of branch capacity and addition of new contracts in the SSPwCT framework. Our results have implications for resource allocation problems with diversity considerations.

**************

Stability in sequential matching with incomplete information by Fanqi Shi

https://doi.org/10.1016/j.geb.2021.07.001Get rights and content

Abstract: I study a two-period matching model where one side of the market (e.g. workers) have an option to invest and delay matching in the first period. Investment increases each agent's matching surplus in the second period, by a magnitude of the worker's investment ability in the match pair. Assuming each worker's investment ability is her private information that unfolds in the second period, I define a notion of sequential stability, and show that the set of sequentially stable outcomes is a superset of the complete information stable outcomes. Moreover, with transferable utility, as long as the cost of delay coincides on the same side of the market, efficient investment occurs in any sequentially stable outcome. When every agent shares the same cost of delay, efficient investment also occurs in any sequentially stable outcome with non-transferable utility. My analysis suggests that efficient investment is a robust prediction in sequential matching markets.