Tuesday, June 19, 2018

Why high incentives might require muscular informed consent (Ambuehl, Ockenfels and Stewart)

Here's a new paper (or at least just recently on the web) showing that subjects who are enticed by high payments might be disproportionately those who have difficulty gathering information about the risks...i.e.. these potential participants respond more to high payoffs than those who might have been able to gather information easily (and might have participated for a lower payment or been deterred even despite a high payment).

Attention and Selection Effects

CESifo Working Paper No. 7091 (Mai 2018)
Primary CESifo Category: [13] Behavioural Economics 
Abstract:
Who participates in transactions when information about the consequences must be learned? We show theoretically that decision makers for whom acquiring and processing information is more costly respond more strongly to changes in incentive payments for participating and decide to participate based on worse information. With higher payments, the pool of participants thus consists of a larger proportion of individuals who have a worse understanding of the consequences of their decision. We conduct a behavioral experiment that confirms these predictions, both for experimental variation in the costs of information acquisition and for various measures of information costs, including school grades and cognitive ability. These findings are relevant for any transaction combining a payment for participation with uncertain yet learnable consequences.

Monday, June 18, 2018

Alex Teytelboym on Love Island

Alex T. writes to let me know that he has been explaining British reality TV: a show where beautiful people couple up and couple on camera, apparently.

 The economics of Love Island: how game theory explains 'coupling up'
by  

His concluding paragraphs:

"So how does economic theory help contestants win Love Island? It’s very tempting to dump your partner and couple up with someone else, especially when there are eight weeks to go. But leaving your partner for someone else once tells others you are bad egg who cannot be trusted. As the series nears its end, the rewards from commitment are very high – not just within the Love Island house, but
also with the viewers.

"The public love couples who fight but appear committed. A “folk theorem” in game theory tells us that when people are sufficiently patient they can remain committed even when incentives to cheat are high. Sometimes second best is the best you can get, so you shouldn’t be greedy. Ultimately, while being liked by the public clearly helps, Love Islanders would do well to heed game theorists’
advice."

Sunday, June 17, 2018

Title IX reporting incentives and mis-incentives

The Atlantic has a story on a strange Title IX case (and a resulting lawsuit), with the suggestion that it might have to do with perverse legal and procedural incentives:

Mutually Nonconsensual Sex

Here's the critical paragraph:
"The event in prĂ©cis, as summarized by Robby Soave of Reason magazine:
“Male and female student have a drunken hookup. He wakes up, terrified she's going to file a sexual misconduct complaint, so he goes to the Title IX office and beats her to the punch. She is found guilty and suspended.”

HT: MR

Saturday, June 16, 2018

The market for fake phone numbers

I am not of an age at which I get unwelcome requests for my phone number that I can't simply decline, but if you are, Lifehacker has some suggestions of numbers you could give to creepy strangers:

Give Out These Fake Prank Numbers to Creeps

These two make it clear what is likely the demand side of this market.

  • (646) 926-6614: The Mary Sue Rejection Hotline, which will say, “Oh hello there. If you’re hearing this message, you’ve made a woman feel unsafe and/or disrespected. Please learn to take no for an answer and respect women’s emotional and physical autonomy.  

  • (605) 475-6968: The Rejection Hotline, which politely explains to the individual that whoever gave them this number is not into them.

Friday, June 15, 2018

FRONTIERS OF MARKET DESIGN, June 22 at Cornell

Cornell is a hotbed of market design these days: here's the second conference there next week.
FRONTIERS OF MARKET DESIGN

"The first Frontiers of Market Design workshop will be held in Cornell University, Ithaca, NY on June 22, 2018 in conjunction with the 19th ACM Conference on Economics and Computation (EC).
Market design is a field of applied and theoretical research that sits comfortably on the intersection of economics and computer science. In recent decades, the theory and applications of market design have blossomed. In this workshop, we will focus on a set of promising, new applications of market design. In particular, we are interested in applications of market design which involve complex allocation constraints, vast datasets, and dynamic pricing issues. We also want to explore problems which, despite receiving ample theoretical attention, have not been implemented in practice. We welcome theoretical and empirical papers that deal with new domains of market design as well as papers that discuss practical aspects of market design."


Thursday, June 14, 2018

Workshop on Mathematical Optimization in Market Design, June 18-19

Two market design conferences to be held at Cornell next week: Here's the program for the first one.

INFORMS Workshop Mathematical Optimization 

and Market Design 2018


June 18, 2018

8:00-8:30 am Registration and Breakfast


8:30-8:45 am 
Workshop Opening 
Martin Bichler, Bob Day

8:45-9:30 am  Talk (Chair: Martin Bichler)Solving Large Incomplete-Information Extensive-Form Games, and Beating the Top Human Professionals at Heads-Up No-Limit Texas Hold'em
Tuomas Sandholm, Carnegie Mellon University

9:30-9:45 am Coffee Break 

9:45-11:15 am Session (Chair: Bob Day)
Optimization and Pricing in Non-Convex Markets

Allocation Under Stochastic Demand: A Primal-Dual Approach
Sasa Pekec, Duke University

Competitive Equilibria in Combinatorial Exchanges with Financially Constrained Buyers
Stefan Waldherr, Technical University of Munich (with Martin Bichler)

Linear Prices in Combinatorial Auctions
Bob Day, University of Connecticut

11:15-11:30 am Coffee Break 

11:30-1:00 pm Session (Chair: Ben Lubin)
Iterative Combinatorial AuctionsAn Efficient Ascending Auction for Private Valuations
Oleg Baranov, University of Colorado

Adaptive-Price Combinatorial Auctions
Sebastien Lahaie, Google (with Ben Lubin, Boston University)

Machine Learning-Based Combinatorial Auctions
Ben Lubin, Boston University (with Sven Seuken and Gianluca Brero, Zurich University)
1:00-2:00 pm Lunch Break 

2:00-3:00 pm Session (Chair: Itai Ashlagi)
Matching with Constraints and Complex Preferences

Hidden Substitutes
Scott Kominers, Harvard Business School

Clearing Matching Markets Efficiently: Informative Signals and Match Recommendations
Itai Ashlagi, Stanford University

3:00-3:10 pm Break 

3:10-4:30 pm Panel DiscussionBeyond Strategyproofness
Panel Chair: Martin Bichler, Technical Univ. of Munich 
Panelists: Eric Budish, Univ. of Chicago; Peter Cramton, Cologne Univ.; Michal Feldman, Tel-Aviv Univ.

4:30-4:40 pm Coffee Break 

4:40-5:30 pm Talk (Chair: Ben Lubin)
Markets for Road Use: Eliminating Congestion through Scheduling, Routing, and Real-time Road Pricing,
Peter Cramton, Cologne University (with R. Richard Geddes and Axel Ockenfels)

6 pm Joint Reception with ACM EC at the Gates Hall

June 19, 2018

9:00-10:30 am ACM EC Opening Session and Keynote
  
10:30-12:00 noon Session (Chair: Thayer Morrill)
Market Models and Applications

Quantity Contingent Auctions and Allocation of Airport Slots 
Michael Ball, University of Maryland

Prophet Inequalities Made Easy: Stochastic Optimization by Pricing Non-Stochastic Inputs
Michal Feldman, Tel-Aviv University

Family Ties:  Incorporating Siblings into School Choice
Thayer Morrill, NCSU

12:00-12:10 pm Break

12:10-12:55 pm Talk (Chair: Thayer Morrill)
Market Design and the FCC Incentive Auction
Larry Ausubel, University of Maryland  (with Christina Aperjis and Oleg Baranov)