Sales by auction are coming to the new condo market in New York City: And Do I Hear $2 Million? No? $1 Million? Sold!
"Real estate auctions, rarely used in New York, have the potential to both move property and indicate to reluctant buyers what the true market prices are. Given the current sales drought, even a handful of auctions could reset prices for new condominiums citywide, said Jonathan J. Miller, the president of Miller Samuel, a Manhattan research and appraisal company. He said he expects the auctioned properties to sell for 40 to 45 percent below the asking prices of the first quarter of 2008, when the market peaked"
...
"In the auctions run by Accelerated, only a portion of a building’s unsold units are sold in one swoop, to avoid depressing values more than necessary. The remainder are marketed the traditional way, at the new, lower auction prices. "
...
"Auctions have succeeded in loosening other battered markets, like South Florida. In two held there last fall by Accelerated, 30 to 40 units in partly sold developments went for about half their peak prices. The developers say sales have picked up since then, at prices slightly below those received at auction. "
The real estate auction firm mentioned in the article is Accelerated Marketing Partners, of Boston.
I'll post market design related news and items about repugnant markets. See also my Stanford profile. I have a general-interest book on market design: Who Gets What--and Why The subtitle is "The new economics of matchmaking and market design."
Saturday, February 28, 2009
Friday, February 27, 2009
Kidney Exchange in Australia
Western Australia has a new Kidney Exchange Program directed by Professor Paolo Ferrari of the University of Western Australia. Like kidney exchange programs in the U.S. they are finding the benefits of organizing exchanges as chains: Domino donations reduce kidney transplant wait .
"Prof Ferrari said he expected a national paired kidney exchange program to be established in 2009."
It looks like his confidence is well founded, since when the Prime Minister of Australia gave a speech on organ donation (Rudd opens Organ Donor Awareness Week), he included the following: "The [Australian Organ and Tissue Donation and Transplantation] Authority is also working to implement the new National Paired Kidney Exchange Program"
"Prof Ferrari said he expected a national paired kidney exchange program to be established in 2009."
It looks like his confidence is well founded, since when the Prime Minister of Australia gave a speech on organ donation (Rudd opens Organ Donor Awareness Week), he included the following: "The [Australian Organ and Tissue Donation and Transplantation] Authority is also working to implement the new National Paired Kidney Exchange Program"
Thursday, February 26, 2009
Market for hand crafted food
Like the town that was too small to support one lawyer, and so had to have two, Brooklyn is becoming a center of artisan-produced fine food: Brooklyn’s New Culinary Movement. Not only does a cluster of local food producers help build demand, they also support each other in production:
"To design a boning knife, Mr. Bukiewicz has been sitting in on Mr. Mylan’s butchering classes and taking note of how his hands move.
That sort of collaboration is common.
Two weeks ago Sixpoint Craft Ales, in Red Hook, introduced Dubbel Trubbel, an ale made with cacao nibs from Mast Brothers Chocolate. Sixpoint Craft Ales already brews Gorilla Warfare, an American porter made with Ethiopian Yirgacheffe from Gorilla Coffee, the Park Slope cafe and roaster. At Wheelhouse Pickles, based in Park Slope, Jon Orren uses wort, a byproduct of brewing from Sixpoint Craft Ales, to flavor his Ploughman’s pickle, a mild, earthy relish made with Greenmarket root vegetables.
And McClure’s Pickles, of Williamsburg, is making a strong, grainy mustard with Brooklyn Brewery’s Brown Ale. (Mr. McClure, by the way, sometimes pays his picklers in pickles.)
Local store owners play an important role, more collaborators than simply merchants. Urban Rustic, Spuyten Duyvil Grocery, Blue Apron Foods, Bedford Cheese Shop and Marlow & Daughters all make a point of carrying Brooklyn-made foods."
"To design a boning knife, Mr. Bukiewicz has been sitting in on Mr. Mylan’s butchering classes and taking note of how his hands move.
That sort of collaboration is common.
Two weeks ago Sixpoint Craft Ales, in Red Hook, introduced Dubbel Trubbel, an ale made with cacao nibs from Mast Brothers Chocolate. Sixpoint Craft Ales already brews Gorilla Warfare, an American porter made with Ethiopian Yirgacheffe from Gorilla Coffee, the Park Slope cafe and roaster. At Wheelhouse Pickles, based in Park Slope, Jon Orren uses wort, a byproduct of brewing from Sixpoint Craft Ales, to flavor his Ploughman’s pickle, a mild, earthy relish made with Greenmarket root vegetables.
And McClure’s Pickles, of Williamsburg, is making a strong, grainy mustard with Brooklyn Brewery’s Brown Ale. (Mr. McClure, by the way, sometimes pays his picklers in pickles.)
Local store owners play an important role, more collaborators than simply merchants. Urban Rustic, Spuyten Duyvil Grocery, Blue Apron Foods, Bedford Cheese Shop and Marlow & Daughters all make a point of carrying Brooklyn-made foods."
Market for Camembert
An important part of European Union trade law is the control of the Appellation d'origine contrôlée (AOC). (This is the locational brand name that, for example, makes Champagne--sparkling wine made in the French Champagne region using the methode champagnoise--different from Cava, the sparkling wine made in Spain by the same method. Which brings us to the question of Camembert de Normandie, the French cheese that, according to the Camembert Charter, must be made by hand from raw (unpasteurized) milk.
Because raw milk can harbor disease causing bacteria, the costs of making cheese safely from raw milk is greater than from pasteurized milk. Because of health concerns, the U.S. Food and Drug Administration controls the interstate sale of raw milk and cheeses made from raw milk. All of which brings us back to France, the home of both Camembert and pasteurization. Der Spiegel reports that one of France's largest cheese producers has just given up a long campaign, citing health concerns, to change the Camembert Charter to allow pasteurized milk to be used. But consumers and other producers successfully resisted, and it remains the case that no cheese made with pasteurized milk can be sold as le Camembert de Normandie.
I can't quite tell if this is brand protection, some other kind of protectionism, or if it is related to the kind of repugnance associated with the resistence to genetically modified crops in Europe. But it makes for a good story, and reflects some of the complexities of buying, selling, and labelling food.
Because raw milk can harbor disease causing bacteria, the costs of making cheese safely from raw milk is greater than from pasteurized milk. Because of health concerns, the U.S. Food and Drug Administration controls the interstate sale of raw milk and cheeses made from raw milk. All of which brings us back to France, the home of both Camembert and pasteurization. Der Spiegel reports that one of France's largest cheese producers has just given up a long campaign, citing health concerns, to change the Camembert Charter to allow pasteurized milk to be used. But consumers and other producers successfully resisted, and it remains the case that no cheese made with pasteurized milk can be sold as le Camembert de Normandie.
I can't quite tell if this is brand protection, some other kind of protectionism, or if it is related to the kind of repugnance associated with the resistence to genetically modified crops in Europe. But it makes for a good story, and reflects some of the complexities of buying, selling, and labelling food.
Assisted suicide, Right to Die
We say that a transaction that some people want to engage in is "repugnant" if other people don't want them to, and assisted suicide fits the bill; it remains a crime in most states. But the demand for dignified death by the terminally ill means that the issue raises its head time and again. The NY Times reports: 4 Charged in Multi-State Suicide Assistance Probe .
The organization in question in this case is the Final Exit Network, and the particular charge is that they offered advice and moral support to a terminally ill Georgia man.
"The Georgia man's mother, Betty Celmer, contended that the group shouldn't face charges if they helped her son.
''If they helped John to die, that is what he wanted. I would never find them guilty for helping him,'' she said. ''If someone helped him, I think that was in God's hands.''"
A quick search on the web reveals that the venerable Hemlock Society is no more, but that there remain non-profit organizations devoted to the idea of dignified death, its discussion, and to changing legislation on the subject: here is the website of the World Federation of Right to Die Societies.
The organization in question in this case is the Final Exit Network, and the particular charge is that they offered advice and moral support to a terminally ill Georgia man.
"The Georgia man's mother, Betty Celmer, contended that the group shouldn't face charges if they helped her son.
''If they helped John to die, that is what he wanted. I would never find them guilty for helping him,'' she said. ''If someone helped him, I think that was in God's hands.''"
A quick search on the web reveals that the venerable Hemlock Society is no more, but that there remain non-profit organizations devoted to the idea of dignified death, its discussion, and to changing legislation on the subject: here is the website of the World Federation of Right to Die Societies.
Wednesday, February 25, 2009
Kidney Exchange
Miller-McCune magazine has an article on kidney exchange that gives a pretty good view of some current developments (having to do with exchanges involving compatible as well as incompatible pairs, and chains of transplants started by non-directed donors): Making a Market for Kidneys.
"Using game theory and market-design software, doctors are arranging kidney-transplant "swaps" — sometimes in long chains — to give more people with renal disease better transplant options and healthier futures."
The story mentions both the New England Program for Kidney Exchange, and the Alliance for Paired Donation, the two innovative kidney exchange networks with which Tayfun Sonmez, Utku Unver and I have worked extensively. (One of my longstanding frustrations with the ways in which stories make it into the news, however, is that, while I am mentioned by name in the story, my colleagues are not. I invariably mention this frustration to reporters when they call, but often it doesn't help. It must say something about the market for news, although I'm not quite sure what.
"Using game theory and market-design software, doctors are arranging kidney-transplant "swaps" — sometimes in long chains — to give more people with renal disease better transplant options and healthier futures."
The story mentions both the New England Program for Kidney Exchange, and the Alliance for Paired Donation, the two innovative kidney exchange networks with which Tayfun Sonmez, Utku Unver and I have worked extensively. (One of my longstanding frustrations with the ways in which stories make it into the news, however, is that, while I am mentioned by name in the story, my colleagues are not. I invariably mention this frustration to reporters when they call, but often it doesn't help. It must say something about the market for news, although I'm not quite sure what.
Tuesday, February 24, 2009
Credit: not repugnant anymore
What a difference a few centuries can make. When Shakespeare wrote The Merchant of Venice, lending money was a repugnant transaction.
When President Obama spoke to Congress Tuesday evening, he had this to say: "You see, the flow of credit is the lifeblood of our economy. The ability to get a loan is how you finance the purchase of everything from a home to a car to a college education, how stores stock their shelves, farms buy equipment, and businesses make payroll."
When President Obama spoke to Congress Tuesday evening, he had this to say: "You see, the flow of credit is the lifeblood of our economy. The ability to get a loan is how you finance the purchase of everything from a home to a car to a college education, how stores stock their shelves, farms buy equipment, and businesses make payroll."
Market design is coming of age
There are an increasing number of signs that Market Design is coming of age as a distinct area of economics. Here are three.
The National Bureau of Economic Research has formed a new Market Design Working Group. Susan Athey and Parag Pathak have organized its first conference, for May 15-16, 2009. Here is the preliminary program.
My Market Design course at Harvard, which for many years used to stand alone, is this year part of a two-semester sequence, with the second semester being Economics 2056b. Topics in Market Design - (New Course) offered by my colleagues Susan Athey and Greg Lewis. More of our Ph.D. students are choosing market design as a field, and we've had some great graduates in the decade I've been at Harvard (all of whom do other things as well:), including Estelle Cantillon, Muriel Niederle, John Asker, Michael Ostrovsky , Ben Edelman, Parag Pathak, Fuhito Kojima, Robin Lee and (this year) Eric Budish and Mihai Manea.
Oxford University Press is preparing a Handbook of Market Design, edited by Nir Vulcan, Muriel Niederle , and Zvika Neeman.
The National Bureau of Economic Research has formed a new Market Design Working Group. Susan Athey and Parag Pathak have organized its first conference, for May 15-16, 2009. Here is the preliminary program.
My Market Design course at Harvard, which for many years used to stand alone, is this year part of a two-semester sequence, with the second semester being Economics 2056b. Topics in Market Design - (New Course) offered by my colleagues Susan Athey and Greg Lewis. More of our Ph.D. students are choosing market design as a field, and we've had some great graduates in the decade I've been at Harvard (all of whom do other things as well:), including Estelle Cantillon, Muriel Niederle, John Asker, Michael Ostrovsky , Ben Edelman, Parag Pathak, Fuhito Kojima, Robin Lee and (this year) Eric Budish and Mihai Manea.
Oxford University Press is preparing a Handbook of Market Design, edited by Nir Vulcan, Muriel Niederle , and Zvika Neeman.
Monday, February 23, 2009
Market design from the other side of the fence
Market design is both about designing markets (design as a verb) and about understanding the design of existing markets (design as a noun). This latter activity is the way game theorists originally got into the business; by looking at the existing 'rules of the game,' and figuring out how they worked, and could be made to work.
I'm reminded of this by two working papers on auctions, one focused on offering consulting advice to a bidder, and the other on criminal collusion among bidders.
The consulting story is by the A-team of spectrum auction consultants, and recounts some of their recent experience giving bidding advice: Winning Play in Spectrum Auctions by Jeremy Bulow, Jonathan Levin and Paul Milgrom. They focus on the information flows in multi-round auctions, and how the amounts bid in early rounds can help forecast final prices, which is an aid in deciding on which lots to bid:
"In major spectrum auctions, even large corporations need to raise or put aside money in advance to finance their spectrum purchases. Many of these companies also have a broad set of target licenses. If these licenses are substitutes and the budget constraint is binding, the bidder's optimal purchase will involve spending its whole budget or nearly so. Of course not every bidder falls into this category. For bidders with tight budgets and narrow interests, or for entrants with all-or-nothing goals, rising prices could lead them to spend zero once the prices of target licenses rise too high.
"If bidders in the first category account for enough of the money in the auction, a previously unexplored pattern becomes identifiable in the data. Define a bidder's exposure to be the sum of all of its bids in a given round, including its standing high bids from the prior round and all of its new bids in the current round, whether provisionally winning or not. This is the largest amount that a bidder might have to pay if all of its bids were to become winning. If a bidder faces a binding budget constraint and has broad interests, then as prices increase from round to round, its total exposure will eventually level off at an amount approximating its budget. If all bidders were to fall in this category, then the total exposure of all bidders in the auction would rise to the level of the aggregate bidder budgets and level off, forecasting the final auction prices. As prices rise, bidders will narrow the set of licenses on which they bid, the identities of the provisionally winning bidders on various licenses will change, and total winning bids will continue to rise, but final total winning bids will be forecast early and well by total exposure."
The account of criminal collusion is John Asker's A Study of the Internal Organisation of a Bidding Cartel, which tells of a long lived cartel of stamp dealers who agreed in advance which of their members would bid on each lot that they were collectively interested in. (He obtained the data from the prosecution records of the Antitrust Bureau of the New York Attorney General’s Department.) They coordinated among themselves by first holding a "knockout auction" (of roughly the kind that Graham, Marshall, and Richard 1990 described among bidders in New Jersey machine tool auctions), to determine which of the cartel members would be allocated the right to bid on each lot, and what sidepayments would be made following a successful bid. The detailed data allow Asker to estimate the costs that the cartel imposed on sellers and on other bidders who were not members of the cartel.
Sunday, February 22, 2009
Real estate auctions
Sales of property by auction seem to rise in bad times: Commercial Auctions Expected to Rise . The attraction of an auction is that it can aid in price discovery, and move quickly.
One such property "is the John Hancock Tower in Boston, which is set to go on the auction block next month. The dire turn of events came after Broadway Partners, based in New York, which bought the tower in 2006 for $1.3 billion, defaulted in January on some loans, prompting a group of mezzanine lenders to hire Green Loan Services, a unit of SL Green, to pursue an auction. (Mezzanine loans are secured by a stake in ownership rather than the actual property; they have become increasingly popular over the last several years of high-leverage deal making.)"
...
"Auction houses are poised for a growing role in commercial real estate. The strengths of the auction model — a faster sales cycle, lower costs, and the ability to quickly determine a fair market value — play into current market conditions.
“It’s tough to put your finger on a price right now,” said Randy Wells, the president of the National Auctioneers Association. He said that comparable sales and listings could be consulted “but it’s guesswork right now,” and that auctions “are really good at finding a current market value in a short amount of time.” "
One such property "is the John Hancock Tower in Boston, which is set to go on the auction block next month. The dire turn of events came after Broadway Partners, based in New York, which bought the tower in 2006 for $1.3 billion, defaulted in January on some loans, prompting a group of mezzanine lenders to hire Green Loan Services, a unit of SL Green, to pursue an auction. (Mezzanine loans are secured by a stake in ownership rather than the actual property; they have become increasingly popular over the last several years of high-leverage deal making.)"
...
"Auction houses are poised for a growing role in commercial real estate. The strengths of the auction model — a faster sales cycle, lower costs, and the ability to quickly determine a fair market value — play into current market conditions.
“It’s tough to put your finger on a price right now,” said Randy Wells, the president of the National Auctioneers Association. He said that comparable sales and listings could be consulted “but it’s guesswork right now,” and that auctions “are really good at finding a current market value in a short amount of time.” "
School choice in England, continued
School choice, a frequent subject on this blog, is a vexed question around the world. In Britain, the Telegraph reports, Children allocated school places on 'roll of a dice': Thousands of children must take part in random lotteries for school places in a Government attempt to break a middle-class stranglehold on the best schools.
"Schools in a quarter of council areas are allocating places by lottery or "fair banding" – in which the school uses test results to deliberately select a proportion of pupils of poor ability.
The move could cause difficulties for affluent families who have dominated successful schools by buying houses within their catchment areas, often paying a premium of tens of thousands of pounds.
Last year, Brighton became the first area to allocate places at all oversubscribed schools through lotteries after Government reforms gave councils and schools the power to do so. The policy is designed to make all state schools truly comprehensive by ensuring they contain pupils of mixed abilities and social backgrounds, rather than being dominated by those who can afford to live nearby."
It turns out that in New York City, where my colleagues and I helped design a high school choice system, some schools ("Educational Option Schools") also require that a full range of student abilities be represented.
"Schools in a quarter of council areas are allocating places by lottery or "fair banding" – in which the school uses test results to deliberately select a proportion of pupils of poor ability.
The move could cause difficulties for affluent families who have dominated successful schools by buying houses within their catchment areas, often paying a premium of tens of thousands of pounds.
Last year, Brighton became the first area to allocate places at all oversubscribed schools through lotteries after Government reforms gave councils and schools the power to do so. The policy is designed to make all state schools truly comprehensive by ensuring they contain pupils of mixed abilities and social backgrounds, rather than being dominated by those who can afford to live nearby."
It turns out that in New York City, where my colleagues and I helped design a high school choice system, some schools ("Educational Option Schools") also require that a full range of student abilities be represented.
Saturday, February 21, 2009
Friday, February 20, 2009
Market for scholars
Universities are a bit mysterious: they provide both private and public goods, and nations and regions therefore seek to have them. Universities involve the interchange of ideas, and one way to promote this is to promote the interchange of scholars. The European Union, which has long sought to make it easy for students from one EU nation to study in another, is now also investing in making it easy for students to travel more widely: European Union Puts $1.2-Billion Into International-Study Program.
"Students from outside the European Union will be able to tap into more than $1.2-billion in new scholarship money over the next five years through Erasmus Mundus, an academic-mobility program. "
...
"The Erasmus Mundus program is patterned on the 20-year-old Erasmus program, which encourages educational mobility within the European Union’s 27 member nations. Erasmus Mundus is intended to be competitive with the Fulbright program and to increase Europe’s attractiveness as a destination for foreign scholars. "
...
"The program will also provide more-generous grants for European students to study outside the European Union, Mr. Figel said, “making the two-way exchange of the world’s best students and academic staff a reality.”"
"Students from outside the European Union will be able to tap into more than $1.2-billion in new scholarship money over the next five years through Erasmus Mundus, an academic-mobility program. "
...
"The Erasmus Mundus program is patterned on the 20-year-old Erasmus program, which encourages educational mobility within the European Union’s 27 member nations. Erasmus Mundus is intended to be competitive with the Fulbright program and to increase Europe’s attractiveness as a destination for foreign scholars. "
...
"The program will also provide more-generous grants for European students to study outside the European Union, Mr. Figel said, “making the two-way exchange of the world’s best students and academic staff a reality.”"
Thursday, February 19, 2009
Online job search
The WSJ has two articles about congestion on online job search sites. The first reports that, not only is it hard for employers to sort through applicants, a growing number of advertised positions may be deceptive, duplicate, already-filled, or fraudulent: It Isn't Always a Job Behind an Online Job Posting: Employment Ads on the Web Can Lead You to Marketing Pitches, or Worse.
Online job seekers may be particularly susceptible to fraud, because they are willing to give out various kinds of personal information, etc.
An accompanying article asks various recruiting professionals for advice:
Experts Weigh In on Job Boards . Some quick quotes:
Re Monster, CareerBuilder and HotJobs "They do a nice job for very young, entry-level job hunters," says Michael Mellone, a senior consultant at ClearRock, a Boston-based outplacement firm. But for more experienced professionals, he says, industry-specific job sites such as efinancialcareers.com and HigherEd.com are more effective."
"For Mr. Crispin, Jobing.com wins high marks. The site specializes in advertising local employment for job hunters in 41 metro areas across the country. "They have people who physically go out and meet with professional associations that are trying to get their members hired," he says.
Mr. Crispin also favors the site for the DirectEmployers Association, jobcentral.com. Job hunters interested in positions advertised on the site can click on a link to be taken directly to the employer's Web site. "You apply to the company firsthand," he says."
"Rich Gee, an executive coach in Stamford, Conn., recommends Execunet.com. "It's a serious job site," he says. "You cut right through the noise and get to the actual job."
Q: Execunet charges a fee to respond to its help-wanted ads. So do TheLadders and some other job boards. Are they worth paying for?
A: "It's not a lot of money for what you get in return, which is a great filter to get to serious jobs," says Mr. Gee.
Ms. Hightower Hill says many job hunters she's worked with complain that too many employment ads on TheLadders are anonymous, making research and due diligence difficult. "It's pretty hard to follow up because you don't always know the identity of the company," she explains."
"Q: What advice do you have for job hunters searching employment boards?
A: Don't put too much time into them, advises Mr. Cohen. He recommends investing heavily in networking in person and online."
"Networking" isn't just a buzzword. In 1973, the eminent economic sociologist Mark Granovetter first documented the strength of weak ties, and the fact that many jobs are found through friends of friends. The idea is that your close friends have more or less the same information you do, so they may not know of any job openings that you don't already know of. But as you reach out to people to whom you are only more distantly connected, you gain access to new information.
In the years to come it will be interesting to learn whether online job search and other market-making activities change how most jobs are found.
Online job seekers may be particularly susceptible to fraud, because they are willing to give out various kinds of personal information, etc.
An accompanying article asks various recruiting professionals for advice:
Experts Weigh In on Job Boards . Some quick quotes:
Re Monster, CareerBuilder and HotJobs "They do a nice job for very young, entry-level job hunters," says Michael Mellone, a senior consultant at ClearRock, a Boston-based outplacement firm. But for more experienced professionals, he says, industry-specific job sites such as efinancialcareers.com and HigherEd.com are more effective."
"For Mr. Crispin, Jobing.com wins high marks. The site specializes in advertising local employment for job hunters in 41 metro areas across the country. "They have people who physically go out and meet with professional associations that are trying to get their members hired," he says.
Mr. Crispin also favors the site for the DirectEmployers Association, jobcentral.com. Job hunters interested in positions advertised on the site can click on a link to be taken directly to the employer's Web site. "You apply to the company firsthand," he says."
"Rich Gee, an executive coach in Stamford, Conn., recommends Execunet.com. "It's a serious job site," he says. "You cut right through the noise and get to the actual job."
Q: Execunet charges a fee to respond to its help-wanted ads. So do TheLadders and some other job boards. Are they worth paying for?
A: "It's not a lot of money for what you get in return, which is a great filter to get to serious jobs," says Mr. Gee.
Ms. Hightower Hill says many job hunters she's worked with complain that too many employment ads on TheLadders are anonymous, making research and due diligence difficult. "It's pretty hard to follow up because you don't always know the identity of the company," she explains."
"Q: What advice do you have for job hunters searching employment boards?
A: Don't put too much time into them, advises Mr. Cohen. He recommends investing heavily in networking in person and online."
"Networking" isn't just a buzzword. In 1973, the eminent economic sociologist Mark Granovetter first documented the strength of weak ties, and the fact that many jobs are found through friends of friends. The idea is that your close friends have more or less the same information you do, so they may not know of any job openings that you don't already know of. But as you reach out to people to whom you are only more distantly connected, you gain access to new information.
In the years to come it will be interesting to learn whether online job search and other market-making activities change how most jobs are found.
Wednesday, February 18, 2009
Industry standards: cell phone chargers
One way to increase the market for a technology is to make it more commodity like, by adopting an industry standard. So it is very welcome news that Universal cell phone chargers are coming 'soon'.
"On Tuesday, the GSMA trade association announced at its 2009 Mobile World Congress here that it has brokered a deal with the world's leading handset makers to come up with a standard for charging cell phones.
All the major handset makers, including, LG, Motorola, Nokia, Samsung, and Sony Ericsson, have agreed to use the Micro-USB technology as the common universal charging interface, Rob Conway, GSMA CEO, said during the opening keynote speech Tuesday. By 2012, the GSMA promises, most cell phones will use the same kind of connector to charge their batteries.
Seventeen mobile operators, including Vodafone, Orange, and Telofonic, announced they are committed to implementing the standard for the universal mobile phone charger. "
"On Tuesday, the GSMA trade association announced at its 2009 Mobile World Congress here that it has brokered a deal with the world's leading handset makers to come up with a standard for charging cell phones.
All the major handset makers, including, LG, Motorola, Nokia, Samsung, and Sony Ericsson, have agreed to use the Micro-USB technology as the common universal charging interface, Rob Conway, GSMA CEO, said during the opening keynote speech Tuesday. By 2012, the GSMA promises, most cell phones will use the same kind of connector to charge their batteries.
Seventeen mobile operators, including Vodafone, Orange, and Telofonic, announced they are committed to implementing the standard for the universal mobile phone charger. "
Tuesday, February 17, 2009
Economics of Contracts
The Institute for Advanced Study at the Hebrew University of Jerusalem will hold its 20th annual Economics summer school this year from June 19-30, on the Economics of Contracts. The faculty is awesome: Philippe Aghion (Harvard), Omri Ben-Shahar (Chicago), Mathias Dewatripont (Brussels), Oliver Hart (Harvard), Bengt Holmstrom (MIT), Eric Maskin (IAS Princeton), and Jean Tirole (Toulouse).
Send your students...
Send your students...
Market for nurses: residencies?
Despite the medical-training ethos of "see one, do one, teach one," newly graduated MD's aren't considered to be independent doctors until they have completed several years of organized on the job training (in the form of residencies and fellowships). Nurses, however, are often thrust directly into relatively unsupervised patient care directly upon graduation.
That may be changing, partly because the stress of being given too much responsibility too soon causes young nurses to leave: Amid Nurse Shortage, Hospitals Focus on Retention.
"Many novice nurses like O'Bryan are thrown into hospitals with little direct supervision, quickly forced to juggle multiple patients and make critical decisions for the first time in their careers. About 1 in 5 newly licensed nurses quits within a year, according to one national study.
That turnover rate is a major contributor to the nation's growing shortage of nurses. But there are expanding efforts to give new nursing grads better support. Many hospitals are trying to create safety nets with residency training programs."
...
"One national program is the Versant RN Residency, which was developed at Childrens Hospital Los Angeles and since 2004 has spread to 70 other hospitals nationwide. One of those, Baptist Health South Florida in the Miami area, reports cutting its turnover rate from 22 percent to 10 percent in the 18 months since it started its program."
...
"The American Association of Colleges of Nursing and the University HealthSystem Consortium teamed up in 2002 to create a residency primarily for hospitals affiliated with universities. Fifty-two sites now participate in that yearlong program and the average turnover rate for new nurses was about 6 percent in 2007."
...
"The National Council of State Boards of Nursing is considering a standardized transition program. It cited a study showing a link between residencies and fewer medical errors, but also pointed to the inconsistency among current efforts."
That may be changing, partly because the stress of being given too much responsibility too soon causes young nurses to leave: Amid Nurse Shortage, Hospitals Focus on Retention.
"Many novice nurses like O'Bryan are thrown into hospitals with little direct supervision, quickly forced to juggle multiple patients and make critical decisions for the first time in their careers. About 1 in 5 newly licensed nurses quits within a year, according to one national study.
That turnover rate is a major contributor to the nation's growing shortage of nurses. But there are expanding efforts to give new nursing grads better support. Many hospitals are trying to create safety nets with residency training programs."
...
"One national program is the Versant RN Residency, which was developed at Childrens Hospital Los Angeles and since 2004 has spread to 70 other hospitals nationwide. One of those, Baptist Health South Florida in the Miami area, reports cutting its turnover rate from 22 percent to 10 percent in the 18 months since it started its program."
...
"The American Association of Colleges of Nursing and the University HealthSystem Consortium teamed up in 2002 to create a residency primarily for hospitals affiliated with universities. Fifty-two sites now participate in that yearlong program and the average turnover rate for new nurses was about 6 percent in 2007."
...
"The National Council of State Boards of Nursing is considering a standardized transition program. It cited a study showing a link between residencies and fewer medical errors, but also pointed to the inconsistency among current efforts."
Monday, February 16, 2009
Sustainable fisheries
Nowhere is the "tragedy of the commons" clearer than in ocean fisheries, which are difficult to regulate and maintain in a sustainable way. A recent article, Fish Shares and Sharing Fish describes the problem well. (From a market design perspective, one difficulty is that fishermen have large strategy sets, so changing the rules of the game often changes behavior in unanticipated ways.)
In national waters, regulations involve law enforcement, and the Washington Post has an illuminating story about a criminal investigation involving the sale of illegally large rockfish (striped bass), which the law requires must be thrown back so that the breeding pool should not be selected to consist of only small fish. Swimming in Intrigue in Backwoods of Md.: Four-Year Undercover Probe Led to Charges of Rockfish Trafficking.
Some quick quotes from that story:
"Cheating is an old vice around the Chesapeake, with watermen sneaking in extra bushels of oysters or undersized perch. "
"The fish -- a key predator and a beloved sport fish, also known as striped bass -- has rebounded from desperate lows in the 1980s, in part because of restrictions on fishing."
"Many of the fish were tagged as having been caught with hooks and lines, but the agents suspected they had actually been caught in a large net and should have been subject to different restrictions.
To prove it, they turned to a fish coroner. "
In October 2007 I hosted a conference at Harvard organized by Ecotrust on Market Design for Limited Access Programs in U.S. Fisheries. One consequence of that is that, together with some students and colleagues, I occasionally get to talk to Paul Parker of the Cape Cod Fisheries Trust, about contemporary market design problems in the Cape Cod scallop and ground fish fisheries. His concern is with how regulations on fishing may impact the composition of the fishing fleet; and how the makeup of the fleet (specifically the relationship between big factory ships and the small day boats that are the constituency of the Cape Cod Commercial Hook Fishermen's Association) will in turn impact the fish.
In national waters, regulations involve law enforcement, and the Washington Post has an illuminating story about a criminal investigation involving the sale of illegally large rockfish (striped bass), which the law requires must be thrown back so that the breeding pool should not be selected to consist of only small fish. Swimming in Intrigue in Backwoods of Md.: Four-Year Undercover Probe Led to Charges of Rockfish Trafficking.
Some quick quotes from that story:
"Cheating is an old vice around the Chesapeake, with watermen sneaking in extra bushels of oysters or undersized perch. "
"The fish -- a key predator and a beloved sport fish, also known as striped bass -- has rebounded from desperate lows in the 1980s, in part because of restrictions on fishing."
"Many of the fish were tagged as having been caught with hooks and lines, but the agents suspected they had actually been caught in a large net and should have been subject to different restrictions.
To prove it, they turned to a fish coroner. "
In October 2007 I hosted a conference at Harvard organized by Ecotrust on Market Design for Limited Access Programs in U.S. Fisheries. One consequence of that is that, together with some students and colleagues, I occasionally get to talk to Paul Parker of the Cape Cod Fisheries Trust, about contemporary market design problems in the Cape Cod scallop and ground fish fisheries. His concern is with how regulations on fishing may impact the composition of the fishing fleet; and how the makeup of the fleet (specifically the relationship between big factory ships and the small day boats that are the constituency of the Cape Cod Commercial Hook Fishermen's Association) will in turn impact the fish.
Sunday, February 15, 2009
Market for lawyers: second year summer associates
Big law firms do a lot of the hiring of new lawyers by first hiring them as second year summer associates, who will work for the firm the summer between their second and third (last) year of law school, and who will often be recruited back to full time associate positions following graduation. At various times in the past this recruiting process has unraveled, with first year summer associateships sometimes assuming a similarly important role in the recruiting and screening process. (In general, unraveling is the process by which a market starts to arrange transactions, in this case employment, earlier and earlier before they will actually begin, and it can make the matching process inefficient.)
The Harvard Crimson reports what might be the beginning of some unraveling, as the recruiting process by which second year summer associates are recruited at Harvard will become about a month earlier, and before second year classes begin: HLS To Move Up Summer Job Hunt.
"Harvard Law School will move up its recruiting process in order to bring recruiters to campus earlier in the year after firm cutbacks due to last fall’s economic turbulence left many students with far fewer summer offers than in years past. The Law School’s Office of Career Services announced that the school will invite firms to campus the last full week of August before classes begin, advancing the recruiting timeline by about a month. Traditionally, the Law School’s recruiting cycle began later than at comparable institutions, which hurt students last October when law firms reduced the number of spots reserved for Harvard recruits in light the impending recession. Fly-out week—the time when students visit firms who have expressed interest in them—is now scheduled for the week of September 14, two weeks after the first day of classes. During that period, the school puts classes on hold for a week-long fall break. "
The Harvard Crimson reports what might be the beginning of some unraveling, as the recruiting process by which second year summer associates are recruited at Harvard will become about a month earlier, and before second year classes begin: HLS To Move Up Summer Job Hunt.
"Harvard Law School will move up its recruiting process in order to bring recruiters to campus earlier in the year after firm cutbacks due to last fall’s economic turbulence left many students with far fewer summer offers than in years past. The Law School’s Office of Career Services announced that the school will invite firms to campus the last full week of August before classes begin, advancing the recruiting timeline by about a month. Traditionally, the Law School’s recruiting cycle began later than at comparable institutions, which hurt students last October when law firms reduced the number of spots reserved for Harvard recruits in light the impending recession. Fly-out week—the time when students visit firms who have expressed interest in them—is now scheduled for the week of September 14, two weeks after the first day of classes. During that period, the school puts classes on hold for a week-long fall break. "
Saturday, February 14, 2009
Contracts for basketball players: the principal-agent problem in a team sport
The NY Times has a fascinating article on basketball, focused on the Rockets' Shane Battier: The No-Stats All-Star. But the larger focus of the article is on basketball as a team sport in which there is considerable tension between self interest and team interest for players who are measured and rewarded by their individual statistics. That is, players may be tempted to shoot rather than pass, or vice versa, in order to improve their statistics even when a different action would have a greater chance of improving the score, and many of the important defensive things a player like Battier does are not even measured by conventionally reported statistics. The article suggests that basketball contracts may change, as teams start to understand incentives better.
"There is a tension, peculiar to basketball, between the interests of the team and the interests of the individual. The game continually tempts the people who play it to do things that are not in the interest of the group. On the baseball field, it would be hard for a player to sacrifice his team’s interest for his own. Baseball is an individual sport masquerading as a team one: by doing what’s best for himself, the player nearly always also does what is best for his team. “There is no way to selfishly get across home plate,” as Morey puts it. “If instead of there being a lineup, I could muscle my way to the plate and hit every single time and damage the efficiency of the team — that would be the analogy"
...
"When I ask Morey if he can think of any basketball statistic that can’t benefit a player at the expense of his team, he has to think hard. “Offensive rebounding,” he says, then reverses himself. “But even that can be counterproductive to the team if your job is to get back on defense.” It turns out there is no statistic that a basketball player accumulates that cannot be amassed selfishly. “We think about this deeply whenever we’re talking about contractual incentives,” he says. “We don’t want to incent a guy to do things that hurt the team” — and the amazing thing about basketball is how easy this is to do. “They all maximize what they think they’re being paid for,” he says. He laughs. “It’s a tough environment for a player now because you have a lot of teams starting to think differently. They’ve got to rethink how they’re getting paid.”"
The principal-agent problem is everywhere.
"There is a tension, peculiar to basketball, between the interests of the team and the interests of the individual. The game continually tempts the people who play it to do things that are not in the interest of the group. On the baseball field, it would be hard for a player to sacrifice his team’s interest for his own. Baseball is an individual sport masquerading as a team one: by doing what’s best for himself, the player nearly always also does what is best for his team. “There is no way to selfishly get across home plate,” as Morey puts it. “If instead of there being a lineup, I could muscle my way to the plate and hit every single time and damage the efficiency of the team — that would be the analogy"
...
"When I ask Morey if he can think of any basketball statistic that can’t benefit a player at the expense of his team, he has to think hard. “Offensive rebounding,” he says, then reverses himself. “But even that can be counterproductive to the team if your job is to get back on defense.” It turns out there is no statistic that a basketball player accumulates that cannot be amassed selfishly. “We think about this deeply whenever we’re talking about contractual incentives,” he says. “We don’t want to incent a guy to do things that hurt the team” — and the amazing thing about basketball is how easy this is to do. “They all maximize what they think they’re being paid for,” he says. He laughs. “It’s a tough environment for a player now because you have a lot of teams starting to think differently. They’ve got to rethink how they’re getting paid.”"
The principal-agent problem is everywhere.
TARP II
Lucian Bebchuk, the eminent law-and-economics lawyer/economist best known for his work on corporate governance, has just distributed a paper, How To Make TARP II Work.
Here is the Abstract:
"Treasury Secretary Geithner announced a plan, which the Treasury is willing to finance with up to $1 trillion of public funds, to partner with private capital to buy banks' "troubled assets." The Treasury has not yet settled on the plan's design, and its announcement has encountered substantial skepticism as to whether an effective plan for a public-private partnership in buying troubled assets can be worked out. This paper argues that, yes, it can. The paper also analyzes how the plan should be designed to contribute most to restarting the market for troubled assets at the least cost to taxpayers.
"The government's plan should focus on establishing a significant number of competing funds that will be privately managed and dedicated to buying troubled assets - not on creating one, large public-private aggregator bank. Establishing competing funds, I show, is necessary both to securing a well-functioning market for troubled assets and to keeping costs to taxpayers at a minimum.
"Each new fund will be partly financed with private capital, with the rest coming (say, in the form of non-recourse debt financing) from the government's Investment Fund planned by the Treasury. One important element of the proposed design is a competitive process in which private managers seeking to establish a fund participating in the program will submit bids as to what fraction of the fund's capital will be funded privately. The government will set the fraction of each participating fund's capital that must be financed with private money at the highest level that, given the received bids, will still enable establishing new funds with aggregate capital equal to the program's target level. Overall, I show that the proposed design will leverage private capital to the fullest extent possible and will provide the most effective and least costly mechanism for restarting the market for troubled assets. "
Here is the Abstract:
"Treasury Secretary Geithner announced a plan, which the Treasury is willing to finance with up to $1 trillion of public funds, to partner with private capital to buy banks' "troubled assets." The Treasury has not yet settled on the plan's design, and its announcement has encountered substantial skepticism as to whether an effective plan for a public-private partnership in buying troubled assets can be worked out. This paper argues that, yes, it can. The paper also analyzes how the plan should be designed to contribute most to restarting the market for troubled assets at the least cost to taxpayers.
"The government's plan should focus on establishing a significant number of competing funds that will be privately managed and dedicated to buying troubled assets - not on creating one, large public-private aggregator bank. Establishing competing funds, I show, is necessary both to securing a well-functioning market for troubled assets and to keeping costs to taxpayers at a minimum.
"Each new fund will be partly financed with private capital, with the rest coming (say, in the form of non-recourse debt financing) from the government's Investment Fund planned by the Treasury. One important element of the proposed design is a competitive process in which private managers seeking to establish a fund participating in the program will submit bids as to what fraction of the fund's capital will be funded privately. The government will set the fraction of each participating fund's capital that must be financed with private money at the highest level that, given the received bids, will still enable establishing new funds with aggregate capital equal to the program's target level. Overall, I show that the proposed design will leverage private capital to the fullest extent possible and will provide the most effective and least costly mechanism for restarting the market for troubled assets. "
Friday, February 13, 2009
Pirate ransom: counterparty risk in the endgame
The NY Times reports that Hijacked Arms Ship Limps Into Port (this is the Ukranian ship full of Russian tanks and other heavy weapons that I blogged about earlier).
An earlier report, Somali Pirates Said to Be Leaving Ship , sheds some light on the negotiations:
"Somali pirates freed a Ukrainian ship carrying tanks and other heavy weapons Thursday after receiving a $3.2 million ransom. The U.S. Navy watched the pirates go but didn't act because the pirates still hold almost 150 people from other crews hostage." ...
"U.S. seamen were inspecting the pirates' departing boats to make sure they weren't taking weapons from the Faina's cargo, Mikhail Voitenko, a spokesman for the ship's owners, said Thursday.
But the Navy was not taking action against the pirates because it did not want members of other crews still in captivity to be harmed, said Cmdr. Jane Campbell, a spokeswoman for the 5th Fleet in Bahrain.
''Even when you release Faina, there are still 147 mariners held hostage by armed pirates,'' Campbell told The Associated Press. ''We're concerned for their well-being.''"
This is the same U.S. Navy one of whose first missions was to fight the Barbary Pirates , an earlier African/Islamic manifestation of piracy. (Do you say a Navy won its wings? spurs? water wings?). So it is very plausible that the pirates worry that, when they release their last hostages, they will face military retaliation against their bases in Somalia.
This will make the endgame tricky.
An earlier report, Somali Pirates Said to Be Leaving Ship , sheds some light on the negotiations:
"Somali pirates freed a Ukrainian ship carrying tanks and other heavy weapons Thursday after receiving a $3.2 million ransom. The U.S. Navy watched the pirates go but didn't act because the pirates still hold almost 150 people from other crews hostage." ...
"U.S. seamen were inspecting the pirates' departing boats to make sure they weren't taking weapons from the Faina's cargo, Mikhail Voitenko, a spokesman for the ship's owners, said Thursday.
But the Navy was not taking action against the pirates because it did not want members of other crews still in captivity to be harmed, said Cmdr. Jane Campbell, a spokeswoman for the 5th Fleet in Bahrain.
''Even when you release Faina, there are still 147 mariners held hostage by armed pirates,'' Campbell told The Associated Press. ''We're concerned for their well-being.''"
This is the same U.S. Navy one of whose first missions was to fight the Barbary Pirates , an earlier African/Islamic manifestation of piracy. (Do you say a Navy won its wings? spurs? water wings?). So it is very plausible that the pirates worry that, when they release their last hostages, they will face military retaliation against their bases in Somalia.
This will make the endgame tricky.
Thursday, February 12, 2009
Auction design for football games
One of Tim Harford's excellent recent columns is on market design for professional football games: Why the NFL should replace the overtime coin toss with an auction system. The issue is that, when a game goes to sudden death overtime, the winner of the coin toss more often also wins the game.
"An ... elegant solution to the overtime problem was proposed in 2002 by Chris Quanbeck, an electrical engineer (and Green Bay Packers fan). Quanbeck's idea was to auction off possession of the ball in the natural currency of the game: field position. The team that was willing to begin closest to its own goal line would receive the privilege of possession."
...
"One person who did notice the Quanbeck proposal was Columbia University economist Yeon-Koo Che, a leading light in the theory and practice of auction design. Che wrote not to the NFL but to the economics journals and proved that "divide and choose" was much fairer to the loser of the toss than the current system. But what interested Che and co-author Terrence Hendershott was whether an auction might be even fairer than "divide and choose." They concluded that it would be, because the auction is completely symmetric—unlike with the "divide and choose" method, neither coach is forced to make the first move, so nobody has a built-in advantage. For Che and Hendershott, then, "divide and choose" partly solves the coin-toss problem; the auction fixes it completely."
Che and Hendershott write elsewhere (in The Economist's Voice)
" As far as we are concerned, this little thought experiment was a pleasant reprieve from the current economic woes, and it is nice that economics can have useful things to say on such an unlikely subject matter (a sport we both love), but as one hate email we received suggests, we should and will now “stick to bean counting.” "
I certainly hope they won't: there are plenty of bean counters, but talented market designers are rare.
HT Parag Pathak
"An ... elegant solution to the overtime problem was proposed in 2002 by Chris Quanbeck, an electrical engineer (and Green Bay Packers fan). Quanbeck's idea was to auction off possession of the ball in the natural currency of the game: field position. The team that was willing to begin closest to its own goal line would receive the privilege of possession."
...
"One person who did notice the Quanbeck proposal was Columbia University economist Yeon-Koo Che, a leading light in the theory and practice of auction design. Che wrote not to the NFL but to the economics journals and proved that "divide and choose" was much fairer to the loser of the toss than the current system. But what interested Che and co-author Terrence Hendershott was whether an auction might be even fairer than "divide and choose." They concluded that it would be, because the auction is completely symmetric—unlike with the "divide and choose" method, neither coach is forced to make the first move, so nobody has a built-in advantage. For Che and Hendershott, then, "divide and choose" partly solves the coin-toss problem; the auction fixes it completely."
Che and Hendershott write elsewhere (in The Economist's Voice)
" As far as we are concerned, this little thought experiment was a pleasant reprieve from the current economic woes, and it is nice that economics can have useful things to say on such an unlikely subject matter (a sport we both love), but as one hate email we received suggests, we should and will now “stick to bean counting.” "
I certainly hope they won't: there are plenty of bean counters, but talented market designers are rare.
HT Parag Pathak
Wednesday, February 11, 2009
Kidney Exchange coming to Spain (and liver exchange in HK)
Spain, which has the highest per-capita recovery rate of deceased donor organs in the world, is looking to expand its capacity for live donor kidney transplantation, by starting to use kidney exchange. Adn.es reports: España hará un trasplante cruzado de riñón.
"The first cross-kidney donation done in Spain will take place between two couples in June. "
HT to Flip Klijn
Update: for those who didn't click on the wonderful comment, here it is:
denisec said...
The first liver exchange in Hong Kong occurred a few weeks ago. It was described as "heaven sent" in the media: I save your hubby, you save my brother-in-law , and here it is (with a photo) in a Chinese newspaper
"The first cross-kidney donation done in Spain will take place between two couples in June. "
HT to Flip Klijn
Update: for those who didn't click on the wonderful comment, here it is:
denisec said...
The first liver exchange in Hong Kong occurred a few weeks ago. It was described as "heaven sent" in the media: I save your hubby, you save my brother-in-law , and here it is (with a photo) in a Chinese newspaper
Further Update, June 2023: the above links didn't survive the passage of more than a decade, but you can get a little closer to the Hong Kong story at this Singapore link
I save your hubby, you save my brother-in-law [ARTICLE+ILLUSTRATION]
I save your hubby, you save my brother-in-law Two lives saved in a donor “swop”atHong Kong hospital HEwasalreadycountingdowntohislastbreath.Mr So Wai Lun, 36, had acute liver failure, but there was no suitable organ donor inHongKong. His sister-in-law, 26, was willing to donate part of her liver, but she couldn’t as she
Market for health care: no law of one price
The Boston Globe ran a story about healthcare costs at different Boston area hospitals, in which fees are negotiated between insurers and individual hospitals: A healthcare system badly out of balance
""The same service delivered the same way with the same outcome can vary in cost from one provider to the next by as much as 300 percent," said Charles Baker, president of the state's second-largest health insurer, Harvard Pilgrim Health Care. "There is no other sector of the economy anywhere in this country in which that kind of price variability with no appreciable difference in service or product quality can sustain itself over time.""
Pricing certainly serves different function in health care than in other parts of the economy, and tertiary care teaching hospitals do more than provide simple patient services (e.g. they also train future docs, about which see my previous post today, on Orthopaedic surgeons). So, as the healthcare system is brought into better balance, some attention will have to be paid to paying for some of the things that now may be paid for with hidden cross-subsidies.
HT Paul Kominers (younger brother of the remarkable if less cool SK)
""The same service delivered the same way with the same outcome can vary in cost from one provider to the next by as much as 300 percent," said Charles Baker, president of the state's second-largest health insurer, Harvard Pilgrim Health Care. "There is no other sector of the economy anywhere in this country in which that kind of price variability with no appreciable difference in service or product quality can sustain itself over time.""
Pricing certainly serves different function in health care than in other parts of the economy, and tertiary care teaching hospitals do more than provide simple patient services (e.g. they also train future docs, about which see my previous post today, on Orthopaedic surgeons). So, as the healthcare system is brought into better balance, some attention will have to be paid to paying for some of the things that now may be paid for with hidden cross-subsidies.
HT Paul Kominers (younger brother of the remarkable if less cool SK)
Market for Orthopaedic surgeons
I recently broke an ankle in Maastricht and flew home for surgery in Boston. In both places I visited the emergency room. In both cases the orthopaedic surgery resident who I was treated by in the ER was a young woman.
In Boston, I remarked that, when I was much younger, orthopaedic surgeons were almost all men, and that back then they claimed that orthopaedic surgery had a lot in common with carpentry, and required significant upper body strength. The resident told me that the situation had indeed changed, she had senior mentors who were women.
When she and her colleagues apply for subspecialty fellowships, they will face not only a more gender-integrated market but also a much more orderly market than in the recent past.
A "match" (a centralized clearinghouse) is coming for Orthopaedic surgery subspecialties--see the following preparatory study by two economists (Muriel Niederle and myself) and seven surgeons. (As it happens--small world--the surgeon who put in the many new titanium parts I now am growing new bone around had heard me give an Orthopaedic Surgery Grand Rounds on this subject.)
Harner, Christopher D., Anil S. Ranawat, Muriel Niederle, Alvin E. Roth, Peter J. Stern, Shepard R. Hurwitz, William Levine, G. Paul DeRosa, Serena S. Hu, "Current State of Fellowship Hiring: Is a universal match necessary? Is it possible?," Journal of Bone and Joint Surgery, 90, 2008,1375-1384.
In Boston, I remarked that, when I was much younger, orthopaedic surgeons were almost all men, and that back then they claimed that orthopaedic surgery had a lot in common with carpentry, and required significant upper body strength. The resident told me that the situation had indeed changed, she had senior mentors who were women.
When she and her colleagues apply for subspecialty fellowships, they will face not only a more gender-integrated market but also a much more orderly market than in the recent past.
A "match" (a centralized clearinghouse) is coming for Orthopaedic surgery subspecialties--see the following preparatory study by two economists (Muriel Niederle and myself) and seven surgeons. (As it happens--small world--the surgeon who put in the many new titanium parts I now am growing new bone around had heard me give an Orthopaedic Surgery Grand Rounds on this subject.)
Harner, Christopher D., Anil S. Ranawat, Muriel Niederle, Alvin E. Roth, Peter J. Stern, Shepard R. Hurwitz, William Levine, G. Paul DeRosa, Serena S. Hu, "Current State of Fellowship Hiring: Is a universal match necessary? Is it possible?," Journal of Bone and Joint Surgery, 90, 2008,1375-1384.
Monday, February 9, 2009
Market for electric cars
Before there's a very big market for all-electric cars, there would have to be a way to take long trips in them. For gas-powered cars, there's an extensive infrastructure of filling stations around the world's network of roadways. The NY Times reports on one company's plans to initiate such a network of stations, where you could change your depleted battery for a full one: Mapping a Global Plan for Car Charging Stations
"Mr. Agassi said the first 50 stations would be built in Israel by the end of 2010, the same time Renault’s electric cars would be introduced there, and followed by installations in Denmark, Hawaii and elsewhere. "
Israel and Hawaii seem like natural places to get electric cars started. Both of them are islands as far as auto traffic is concerned: very few people drive out of either one of them. So it should be possible to serve all the driving needs with a small, dense network. Denmark will be harder, since although many car trips that begin in Denmark remain in Denmark, Danes also can drive to Germany and Sweden, and from there on to the wide world, so a Dane with an electric car would, at least for a while, be more limited than one with a gas-powered car.
"Mr. Agassi said the first 50 stations would be built in Israel by the end of 2010, the same time Renault’s electric cars would be introduced there, and followed by installations in Denmark, Hawaii and elsewhere. "
Israel and Hawaii seem like natural places to get electric cars started. Both of them are islands as far as auto traffic is concerned: very few people drive out of either one of them. So it should be possible to serve all the driving needs with a small, dense network. Denmark will be harder, since although many car trips that begin in Denmark remain in Denmark, Danes also can drive to Germany and Sweden, and from there on to the wide world, so a Dane with an electric car would, at least for a while, be more limited than one with a gas-powered car.
Barter and illiquidity in Russia
The NY Times reports that in Russia, where rubles are getting scarce but prices are remaining sticky, there's a growing interest in barter exchanges:
Have Car, Need Briefs? In Russia, Barter Is Back .
"Advertisements are beginning to appear in newspapers and online, like one that offered “2,500,000 rubles’ worth of premium underwear for any automobile,” and another promising “lumber in Krasnoyarsk for food or medicine.” A crane manufacturer in Yekaterinburg is paying its debtors with excavators.
And one of Russia’s original commodities traders, German L. Sterligov, has rolled out a splashy “anti-crisis” initiative that he says will link long chains of enterprises in a worldwide barter system.
All this evokes a bit of déjà vu. In the mid-1990s, barter transactions in Russia accounted for an astonishing 50 percent of sales for midsize enterprises and 75 percent for large ones."
...
"Among the most upbeat of [the proponents of barter] is Mr. Sterligov, who, just as the credit crunch brought most business deals to a halt, shoveled $13 million into the Anti-Crisis Settlement and Commodity Center.
...He plans to use a computer database to create chains of six or seven enterprises having difficulty selling their products for cash, in which the last firm on the chain would pay the first in a single cash transaction.
It is the kind of multiparty barter that rose to prominence in the 1990s, when managers of factories across Russia devised complex barter chains to keep the maximum number of enterprises in business when none had cash to pay their bills. A computer, he said, can do the same job faster and more efficiently. "
Loyal followers of this blog will note the resemblance to some kinds of kidney exchange (most notably list exchange chains and altruistic donor chains).
Have Car, Need Briefs? In Russia, Barter Is Back .
"Advertisements are beginning to appear in newspapers and online, like one that offered “2,500,000 rubles’ worth of premium underwear for any automobile,” and another promising “lumber in Krasnoyarsk for food or medicine.” A crane manufacturer in Yekaterinburg is paying its debtors with excavators.
And one of Russia’s original commodities traders, German L. Sterligov, has rolled out a splashy “anti-crisis” initiative that he says will link long chains of enterprises in a worldwide barter system.
All this evokes a bit of déjà vu. In the mid-1990s, barter transactions in Russia accounted for an astonishing 50 percent of sales for midsize enterprises and 75 percent for large ones."
...
"Among the most upbeat of [the proponents of barter] is Mr. Sterligov, who, just as the credit crunch brought most business deals to a halt, shoveled $13 million into the Anti-Crisis Settlement and Commodity Center.
...He plans to use a computer database to create chains of six or seven enterprises having difficulty selling their products for cash, in which the last firm on the chain would pay the first in a single cash transaction.
It is the kind of multiparty barter that rose to prominence in the 1990s, when managers of factories across Russia devised complex barter chains to keep the maximum number of enterprises in business when none had cash to pay their bills. A computer, he said, can do the same job faster and more efficiently. "
Loyal followers of this blog will note the resemblance to some kinds of kidney exchange (most notably list exchange chains and altruistic donor chains).
Sunday, February 8, 2009
Market for art: Brandeis, continued
When I earlier wrote about Brandeis University's decision to close its art museum and sell its art, I noted that many of the reactions to this announcement treated the selling of (donated) art by a museum as a repugnant transaction. Now, Brandeis is reconsidering: Brandeis president issues an apology: Laments museum announcement.
"Reinharz's effort yesterday to soothe a fractured Brandeis community followed last week's surprise announcement that the school planned to close the museum and sell off its artwork as it confronts a financial crisis. That decision had incited protests on campus as well as a firestorm of criticism from the art and philanthropic worlds....
"As for the art, Reinharz said that the university does not intend to put all 7,180 works on the auction block. Only a "minute number" would be sold "if and when it is necessary," he said in Wednesday's interview....
"Reinharz released the letter following a rebuke from faculty late Wednesday, urging him to suspend any final decisions on the museum. His administration's abrupt announcement last week had created a "crisis of confidence" among faculty members, the faculty said in a letter to the president."
Letters to the NY Times on the subject eloquently express strong, conflicting opinions. E.g., on the one hand,
"In a meeting with alumni leaders in the fall, Jehuda Reinharz, president of Brandeis, stated that he would not allow a student to drop out because his or her parents could no longer afford tuition. I thought that was a wonderful position, and it made me prouder of my university than any work by Jasper Johns or Andy Warhol ever did....No one thinks selling art is desirable. But allowing students to have to leave school is not an acceptable alternative. "
And on the other,
"On Jan. 20, I stood on the Mall and watched as President Obama said, “We reject as false the choice between our safety and our ideals.”
He continued, “Those ideals still light the world, and we will not give them up for expedience’s sake.”
Six days later I discovered that my alma mater had done just that, when Brandeis University’s board and president traded the Rose Art Museum for a short-term fiscal fix.
Of the university that ignited my intellectual curiosity and helped to instill in me a lifelong love of the arts, I ask: If you do not stand for the arts when it would be easier not to, did you ever really stand for them at all? "
Saturday, February 7, 2009
Market for electricity: Information and consumption behavior
One set of market design decisions involves what kind of information to provide to participants about other participants. Now that regulated utilities often have an interest in helping customers conserve electricity, one strategy has been to issue electricity bills that let customers compare their usage with the average of their neighbors, and with their most 'efficient' neighbors: Utilities Turn Their Customers Green, With Envy .
This seems to have a good effect. The article suggests that a big component of this effect is the competitive impulse. Of course there may also be a pure information effect; when you realize that people with similar size houses use less electricity, it may let you know that there may be ways to conserve energy that you aren't yet utilizing. (It might be hard to separate these effects in field data.)
This seems to have a good effect. The article suggests that a big component of this effect is the competitive impulse. Of course there may also be a pure information effect; when you realize that people with similar size houses use less electricity, it may let you know that there may be ways to conserve energy that you aren't yet utilizing. (It might be hard to separate these effects in field data.)
Friday, February 6, 2009
Networks and high school athletes
While the NCAA regulates the communication between high school and college coaches, it has more trouble regulating third-party networkers, the NY Times reports: College Recruiting’s Thin Gray Line. It isn't entirely clear who is extracting information rents from whom, but one worries about the high school players.
"“Recruiting for college football is obviously changing,” Prince said in a telephone interview. “It’s become much more like the basketball model. When that happens, you then have people who are intermediaries ...”"
HT Muriel Niederle
"“Recruiting for college football is obviously changing,” Prince said in a telephone interview. “It’s become much more like the basketball model. When that happens, you then have people who are intermediaries ...”"
HT Muriel Niederle
Thursday, February 5, 2009
Networks and labor markets: Internships
The British government is promoting internships as one entryway into the labor market, and as a way to increase social mobility. But the Times of London notes: Sharp middle-class elbows are winning the intern wars
"Even the Labour party is not above calling in favours from chums. Euan Blair, son of the former prime minister, did two stints as an intern in the US Congress. He also worked as a production runner on a film set in the Houses of Parliament, and had work experience at a Paris radio station owned by Bernard Arnault, France’s richest man. "
Aside from personal connections, there are starting to be some market institutions:
"Parents with less exalted connections have little choice but to stump up cash. Work experience has become a popular prize at charity auctions: just before Christmas a week’s unpaid work at ITV Productions fetched £1,260."
"Work experience has always been tricky to come by, but at the moment demand vastly outstrips supply. Wexo, Work Experience Online, whose web address is www.wexo.co.uk, is a Facebook-style website that matches employers with people looking for work experience. It currently has 200 companies on its books – including Armani and Sony Music – and about 2,000 young people hoping to be interns. According to Robin Kennedy, the site’s co-creator, there are more applications towards more glam sectors like marketing, fashion, and entertainment. Don’t, though, think all work experience is so exciting. The company named last year as best work experience provider was Shetland Seafood Auctions, whose seven staff provide an electronic auction service at Lerwick fish market. "
"Even the Labour party is not above calling in favours from chums. Euan Blair, son of the former prime minister, did two stints as an intern in the US Congress. He also worked as a production runner on a film set in the Houses of Parliament, and had work experience at a Paris radio station owned by Bernard Arnault, France’s richest man. "
Aside from personal connections, there are starting to be some market institutions:
"Parents with less exalted connections have little choice but to stump up cash. Work experience has become a popular prize at charity auctions: just before Christmas a week’s unpaid work at ITV Productions fetched £1,260."
"Work experience has always been tricky to come by, but at the moment demand vastly outstrips supply. Wexo, Work Experience Online, whose web address is www.wexo.co.uk, is a Facebook-style website that matches employers with people looking for work experience. It currently has 200 companies on its books – including Armani and Sony Music – and about 2,000 young people hoping to be interns. According to Robin Kennedy, the site’s co-creator, there are more applications towards more glam sectors like marketing, fashion, and entertainment. Don’t, though, think all work experience is so exciting. The company named last year as best work experience provider was Shetland Seafood Auctions, whose seven staff provide an electronic auction service at Lerwick fish market. "
Wednesday, February 4, 2009
Sex and violence on TV: US and Europe
Some transactions are more repugnant than others, and the difference is different in different places. What can be broadcast on TV (or seen in a theatre or sports venue) is different in the US and Europe. I'm reminded of this by a recent NY Times editorial blog post The Disturbing Rise of Ultimate Fighting.
It concludes:
"The rise of ultimate fighting, which is becoming a staple of cable television, is a tribute to the large amounts of money to be made — and to the nation’s bizarre double standard about violence and sex.
If there is a “wardrobe malfunction,” and a usually covered body part is briefly shown, the government reacts swiftly and punitively. If a young man bashes another young man’s face into a bloody pulp, well, that’s entertainment."
Some years ago, a European postdoc told me that he couldn't understand why American movies were much more censored for sex than European movies, but nevertheless had much more violence. I told him that sex was much more natural in Europe, since without it there wouldn't be any Europeans. Americans, on the other hand, come from immigration...
It concludes:
"The rise of ultimate fighting, which is becoming a staple of cable television, is a tribute to the large amounts of money to be made — and to the nation’s bizarre double standard about violence and sex.
If there is a “wardrobe malfunction,” and a usually covered body part is briefly shown, the government reacts swiftly and punitively. If a young man bashes another young man’s face into a bloody pulp, well, that’s entertainment."
Some years ago, a European postdoc told me that he couldn't understand why American movies were much more censored for sex than European movies, but nevertheless had much more violence. I told him that sex was much more natural in Europe, since without it there wouldn't be any Europeans. Americans, on the other hand, come from immigration...
Tuesday, February 3, 2009
Market for soldiers: the Ghurkas
The hiring of mercenaries is widely repugnant (the Geneva Conventions sharply distinguish between soldiers and mercenaries: “A mercenary shall not have the right to be a combatant or a prisoner of war.”). A notable exception is the long standing relationship between the British Army and the Nepalese Ghurkas. Recently the British courts have required the army to treat retired Ghurkas somewhat more like regular Army retirees, and two articles in the London Times explore the story.
Nepal’s middle classes steal a march on path to riches reports that
"The problem is that the benefits of the job now outstrip the average in Nepal’s private sector by so much that even relatively wealthy members of the urban middle class are queuing up to enlist. The recruits used to come mainly from poor villages in the hills, where a Gurkha salary and pension, though less than those paid to the rest of the British Army until recently, were enough to support a large family for life. That started to change in 2007, when the British Government accepted the Gurkhas’ demands for the same terms and conditions as the rest of the Army. "...
"The most obvious effect in Nepal is that dozens of private Gurkha training schools have sprung up in the main recruiting areas to help to give prospective recruits a competitive edge. The schools typically charge would-be male recruits about 3,000 rupees (£27) a month for classes in maths and English and physical training. Women pay 1,000 rupees for a two-hour early-morning workout, six days a week, for three months. "...
"The Nepalese Government has backed away from a pledge to ban the country’s citizens from serving in a foreign army, which it described until recently as humiliating, but is concerned about a potential brain drain. "
Another story recounts some of the history of the Gurkhas:
"The Gurkhas fought the British in the 1814-16 Gurkha War. They impressed their enemy and later agreed to become British mercenaries "
The story also includes a remark on the changing technology of warfare:
"Their trademark is the kukri knife, which tradition demands must draw blood every time that it is unsheathed. Gurkhas say that today, however, the knife is used more often in cooking "
Nepal’s middle classes steal a march on path to riches reports that
"The problem is that the benefits of the job now outstrip the average in Nepal’s private sector by so much that even relatively wealthy members of the urban middle class are queuing up to enlist. The recruits used to come mainly from poor villages in the hills, where a Gurkha salary and pension, though less than those paid to the rest of the British Army until recently, were enough to support a large family for life. That started to change in 2007, when the British Government accepted the Gurkhas’ demands for the same terms and conditions as the rest of the Army. "...
"The most obvious effect in Nepal is that dozens of private Gurkha training schools have sprung up in the main recruiting areas to help to give prospective recruits a competitive edge. The schools typically charge would-be male recruits about 3,000 rupees (£27) a month for classes in maths and English and physical training. Women pay 1,000 rupees for a two-hour early-morning workout, six days a week, for three months. "...
"The Nepalese Government has backed away from a pledge to ban the country’s citizens from serving in a foreign army, which it described until recently as humiliating, but is concerned about a potential brain drain. "
Another story recounts some of the history of the Gurkhas:
"The Gurkhas fought the British in the 1814-16 Gurkha War. They impressed their enemy and later agreed to become British mercenaries "
The story also includes a remark on the changing technology of warfare:
"Their trademark is the kukri knife, which tradition demands must draw blood every time that it is unsheathed. Gurkhas say that today, however, the knife is used more often in cooking "
Monday, February 2, 2009
Credit cards, data mining, incentives
Two recent stories point to the fact that banks, seeking to control their lending, are selectively suspending credit cards or cutting credit limits, based on data about individuals' credit card use. This introduces some interesting incentive problems, quite different from usual credit card decisions.
The NY Times story, American Express Kept a (Very) Watchful Eye on Charges , reports
"In some instances, if it didn’t like what it was seeing, the company has cut customer credit lines. It laid out this logic in letters that infuriated many of the cardholders who received them. “Other customers who have used their card at establishments where you recently shopped,” one of those letters said, “have a poor repayment history with American Express.”
"It sure sounded as if American Express had developed a blacklist of merchants patronized by troubled cardholders. But late this week, American Express told me that wasn’t the case. The company said it had also decided to stop using what it has called “spending patterns” as a criteria in its credit line reductions. "...
"American Express wouldn’t have been the first company to try cordoning off certain industries. Last year, CompuCredit, a subprime lender, got in trouble with the Federal Trade Commission for failing to disclose that it could reduce customers’ credit lines for using their cards at various establishments.
What was on CompuCredit’s no-go list? Marriage counselors, tire retreading and repair shops, bars and nightclubs, pool halls, pawnshops and massage parlors, among others. "
The Globe story, Lenders abruptly cut lines of credit, focuses on customers who have had their cards suspended.
"Many of the credit lines being taken away or reduced have not been used recently, according to people who track the business. Dennis Moroney of TowerGroup, a Needham research firm, called it the "kitchen drawer" syndrome because some consumers keep cards they don't need or don't use often. Card issuers are trying to rein in such accounts before they get tapped for emergencies in the slumping economy, Moroney said."...
"...if you have a card you haven't used in a while that you want to keep, ... "Buy something inexpensive and pay it off that month." "
The NY Times story, American Express Kept a (Very) Watchful Eye on Charges , reports
"In some instances, if it didn’t like what it was seeing, the company has cut customer credit lines. It laid out this logic in letters that infuriated many of the cardholders who received them. “Other customers who have used their card at establishments where you recently shopped,” one of those letters said, “have a poor repayment history with American Express.”
"It sure sounded as if American Express had developed a blacklist of merchants patronized by troubled cardholders. But late this week, American Express told me that wasn’t the case. The company said it had also decided to stop using what it has called “spending patterns” as a criteria in its credit line reductions. "...
"American Express wouldn’t have been the first company to try cordoning off certain industries. Last year, CompuCredit, a subprime lender, got in trouble with the Federal Trade Commission for failing to disclose that it could reduce customers’ credit lines for using their cards at various establishments.
What was on CompuCredit’s no-go list? Marriage counselors, tire retreading and repair shops, bars and nightclubs, pool halls, pawnshops and massage parlors, among others. "
The Globe story, Lenders abruptly cut lines of credit, focuses on customers who have had their cards suspended.
"Many of the credit lines being taken away or reduced have not been used recently, according to people who track the business. Dennis Moroney of TowerGroup, a Needham research firm, called it the "kitchen drawer" syndrome because some consumers keep cards they don't need or don't use often. Card issuers are trying to rein in such accounts before they get tapped for emergencies in the slumping economy, Moroney said."...
"...if you have a card you haven't used in a while that you want to keep, ... "Buy something inexpensive and pay it off that month." "
Sunday, February 1, 2009
Market for legal services: changing incentives?
The NY Times reports that more corporate legal work by outside law firms may be starting to be on a fixed fee or performance basis, rather than by the number of hours worked: Billable Hours Giving Ground at Law Firms.
"Clients have complained for years that the practice of billing for each hour worked can encourage law firms to prolong a client’s problem rather than solve it. But the rough economic climate is making clients more demanding, leading many law firms to rethink their business model."...
"Many smaller firms and solo practitioners have long offered to perform services, like mortgage closings, for flat fees. Plaintiff lawyers also often work on a contingency basis, receiving a percentage of any awards."...
"In litigation, firms that charge by the hour can suffer if they are too successful and end a lawsuit — and the stream of payments from continuing work — too quickly. One law firm that recently collapsed, Heller Ehrman, was hurt in part because a number of cases had settled."
If there is indeed a change in how corporate law is bought and sold, it will be interesting to see if this affects the number of cases that are settled without going to trial.
"Clients have complained for years that the practice of billing for each hour worked can encourage law firms to prolong a client’s problem rather than solve it. But the rough economic climate is making clients more demanding, leading many law firms to rethink their business model."...
"Many smaller firms and solo practitioners have long offered to perform services, like mortgage closings, for flat fees. Plaintiff lawyers also often work on a contingency basis, receiving a percentage of any awards."...
"In litigation, firms that charge by the hour can suffer if they are too successful and end a lawsuit — and the stream of payments from continuing work — too quickly. One law firm that recently collapsed, Heller Ehrman, was hurt in part because a number of cases had settled."
If there is indeed a change in how corporate law is bought and sold, it will be interesting to see if this affects the number of cases that are settled without going to trial.