Jacob Leshno defends his Ph.D. dissertation

Defense 4

Dr. Jacob Leshno (in suit:), and Al Roth, Susan Athey, and Ariel Pakes (Drew Fudenberg on skype)

And here is what the picture would have looked like if Drew had used photoshop instead of skype:

Drew looks on approvingly (in a photo doctored by the new doctor...)

The title of Jacob's dissertation is Essays in Market Design.  (How cool is that?)

The three papers he chose to include in his dissertation are

Dynamic Matching in Overloaded Systems (Job Market Paper)

In many assignment problems items arrive stochastically over time. When items are scarce agents form an overloaded waiting list and items are dynamically allocated as they arrive; two examples are public housing and organs for transplant. Even when all the scarce items are allocated, there is the efficiency question of how to assign the right items to the right agents. I develop a model in which impatient agents with heterogeneous preferences wait to be assigned scarce heterogeneous items that arrive stochastically over time. Social welfare is maximized by appropriately matching agents to items, but an individual impatient agent may misreport her preferences to receive an earlier mismatched item. To incentivize an agent to avoid mismatch, the policy needs to provide the agent with a (stochastic) guarantee of future assignment, which I model as putting the agents in a priority buffer-queue. I first consider a standard queue-based allocation policy and derive its welfare properties. To determine the optimal policy, I formulate the dynamic assignment problem as a dynamic mechanism design problem without transfers. The resulting optimal incentive compatible policy uses a buffer-queue of a new queueing policy, the uniform wait queue, to minimize the probability of mismatching agents. Finally, I derive a robustly optimal policy which uses a simple rule: giving equal priority to every agent who declines a mismatched item (a SIRO buffer-queue). This robustly optimal policy has several good properties that make it a compelling market design policy recommendation.

A Supply and Demand Framework for Two-Sided Matching Markets, with Eduardo Azevedo
(Extended abstract published in EC11 under the former name: "The college admissions problem with a continuum of students" )

We give a version of the Gale and Shapley (1962) college admissions problem where colleges have a large capacity and show that the resulting model allows for tractable analysis of matching markets. When colleges are large stable matchings can be described concisely by cutoffs, the admission thresholds at each college. Under broad conditions the model corresponds to the limit of large discrete matching problems.

Will a Decrease In The Minimum Wage Improve Training?, with Michael Schwarz

We show that firms that have a cost advantage in providing training can recoup training cost even in an almost frictionless labor market. Lowering the minimal legal wage can reduce the efficiency of training and harm welfare. In our model training contracts give positive surplus to workers that is not competed away. This explains the existence of intermediary services that essentially sell internship positions to college graduates.

Jacob is one of the group of job market candidates I blogged about here: Five Harvard candidates for the Economics job market this year (2011-12)

He will be going next year to a postdoc at Microsoft Research in Cambridge, after which he'll take up a position at Columbia GSB.

This concludes my defenses for the week (and the Offense never even got a point up on the board...)

Welcome to the club, Jacob.