Friday, November 30, 2012

Johanna Mollerstrom on Quotas and Cooperation

What are some of the complexities associated with the design of affirmative action programs?

Johanna Mollerstrom looks into the question of how different selection procedures may influence the subsequent cooperation among those selected. Her job market paper addresses this question with a simple experiment.  It was initially motivated by questions about Scandinavian affirmative action laws as they are sometimes applied to company boards of directors, with a quota for female participation: Quotas and Cooperation.

"Abstract: Selection by quotas is an important policy measure in the affirmative action tool box. However, quotas may come with unintended side effects, for example by causing uncooperative behavior in the group formed with quota-based selection rules. In the laboratory I measure the impact of a quota on group cooperation, and examine the underlying mechanisms. Two groups are created by randomly assigning participants to either an orange or a purple group. In the unrepresentative quota treatment, orange participants are chosen as members of a selected group by performance on a simple unrelated math task whereas purple participants are chosen based solely on the quota. I compare contributions in a public good game in this unrepresentative quota treatment to behavior in a control treatment, where the orange and purple participants are treated symmetrically and all members of the selected group are chosen based on performance on the unrelated math task. My results show significantly less cooperation in the quota treatment and I furthermore find that this tendency is observed in both the meritocratically chosen orange participants and the quota-advantaged purple participants, and regardless of the color of the matched player. The reduced cooperation remains even when participants are given a rationale for the unrepresentative quota, e.g., by appealing to a fairness argument. The negative effect on cooperation from the unrepresentative quota disappears when selection is done completely randomly instead of on the basis of performance."

Johanna was an elected politician in Sweden before she was twenty, and she is on the market this year; you could hire her.

Thursday, November 29, 2012

The market for photographs (or, me in a tie...)

At Getty Images, you can scroll through some photos of this morning's Nobel Symposium at the Swedish Embassy in Washington DC: , or or
(this one even seems to be tagged as a photo of Washington DC:

(From there we went to the White House and met President Obama...)
Update: here's a picture of the President greeting Lloyd Shapley...

Further update: no White House photo of me yet, but here's one from the Swedish embassy...

Symposium at the Swedish Embassy in Washington (5 American Nobel Laureates in 2012)

Embassy of Sweden Cordially Invites You To
A Symposium with 2012 American Nobel Laureates

Thursday, November 29th
08:30 am – 10:00 am
Coffee and registration from 08:00 am

Dr. David J. Wineland, Physics
Dr. Robert J. Lefkowitz, Chemistry
Dr. Brian K. Kobilka, Chemistry
Dr. Alvin E. Roth, Economic Sciences
Dr. Lloyd S. Shapley, Economic Sciences

Moderator:  Dr. Alan I. Leshner, Chief Executive Officer,
American Association for the Advancement of Science and
Executive Publisher, Science

Embassy of Sweden
2900 K Street, N.W., Washington, DC 20007

Wednesday, November 28, 2012

Nikhil Agarwal investigates the medical match (and school choice)

The matching literature has been short on theoretically sophisticated investigators who are simultaneously tooled-up for the most serious kinds of empirical work and curious about the rules of the game that make markets work.  Nikhil Agarwal should put your mind at rest on that score. His dissertation committee consists of Ariel Pakes, Susan Athey, Parag Pathak and me. And his job market paper reports an investigation of a market close to my heart:  An Empirical Model of the Medical Match

"Abstract: This paper develops a framework for estimating preferences in two-sided matching markets with non-transferable utility using only data on observed matches. Unlike single-agent choices, matches depend on the preferences of other agents in the market. I use pairwise stability together with a vertical preference restriction on one side of the market to identify preference parameters for both sides of the market. Recovering the distribution of preferences is only possible in an environment with many-to-one matching. These methods allow me to investigate two issues concerning the centralized market for medical residents. First, I examine the antitrust allegation that the clearinghouse restrains competition, resulting in salaries below the marginal product of labor. Counterfactual simulations of a competitive wage equilibrium show that residents' willingness to pay for desirable programs results in estimated salary markdowns ranging from $23,000 to $43,000 below the marginal product of labor, with larger markdowns at more desirable programs. Therefore, a limited number of positions at high quality programs, not the design of the match, is the likely cause of low salaries. Second, I analyze wage and supply policies aimed at increasing the number of residents training in rural areas while accounting for general equilibrium effects from the matching market. I find that financial incentives increase the quality, but not the number of rural residents. Quantity regulations increase the number of rural trainees, but the impact on resident quality depends on the design of the intervention."

Nikhil is also doing exciting empirical work on school choice: here's the abstract from a forthcoming (and largely completed) working paper;

Sorting and Welfare Consequences of Coordinated Admissions: Evidence from New York City
with Atila Abdulkadiroglu and Parag PathakComing Soon.
Centralized and coordinated application systems are a growing part of recent school choice reforms. This paper estimates preferences for schools using rank order lists from New York City's new high school assignment system launched in Fall 2003 to study the consequences of coordinating school admissions in a mechanism based on the student-proposing deferred acceptance algorithm. Compared to the prior mechanism with multiple offers and a limited number of choices, there is a 40% increase in enrollment at assigned school. The old mechanism restricted choices and placed many students close to home, while the new mechanism assigns students to schools 0.7 miles further from home on average. Student preferences trade off proximity and school quality, but are substantially heterogeneous. Even though students prefer closer schools, the new mechanism is more likely to assign students to schools they prefer and this more than compensates for the distance increase. The average welfare increases by the equivalent of 0.25 miles from the new mechanism. Students from all boroughs, demographic groups, and baseline achievement categories obtain a more preferred assignment on average from the new mechanism, suggesting that allocative changes involving assignment mechanisms need not be zero-sum.

Nikhil is on the market. You could hire him this year.

Tuesday, November 27, 2012

Scott Kominers on designing matching markets for diversity

Scott Kominers, who finished his Ph.D. in 2011, is on the market this year after a very productive two year postdoc at Chicago.

He has written a lot of papers, many on the frontiers of matching and market design. The one he has designated as his primary  job market paper, joint with Tayfun Sonmez, is Designing for Diversity in Matching.

The idea is that when a school has many places, some intended to facilitate the enrollment of different kinds of students, then a deferred acceptance algorithm can be implemented in a nuanced way, in which different positions may express different preferences. It turns out that this can make a big difference in how slots are filled.

"Abstract: To encourage diversity, schools often "reserve" some slots for students of specific types. Students only care about their school assignments and contractual terms like tuition, and hence are indifferent among slots within a school. Because these indifferences can be resolved in multiple ways, they present an opportunity for novel market design.

"We introduce a two-sided, many-to-one matching with contracts model in which agents with unit demand match to branches, which may have multiple slots available to accept contracts. Each slot has its own linear priority order over contracts; a branch chooses contracts by filling its slots sequentially. We demonstrate that in these matching markets with slot-specific priorities, branches' choice functions may not satisfy the substitutability conditions typically crucial for matching with contracts. Despite this complication, we are able to show that stable outcomes exist in this framework and can be found by a cumulative offer mechanism that is strategy-proof and respects unambiguous improvements in priority. Our results provide insight into the design of transparent affirmative action matching mechanisms, and show the value of a seemingly ad hoc administrative decision in the United States Military Academy's branch-of-choice program."

Scott's work is well worth following, and he's on the market, so you could hire him this year.

Monday, November 26, 2012

Dr. Joseph E. Murray, who won a Nobel for the first kidney transplant, RIP

Nobel winner Dr. Joseph Murray, famous for first successful kidney transplant dies in Boston

See my earlier posts about Dr. Murray and the first kidney transplant,

update: here's a good obit in the NY Times:Joseph E. Murray, Transplant Doctor and Nobel Prize Winner, Dies at 93

"Dr. Joseph E. Murray, who opened a new era of medicine with the first successful human organ transplant, died on Monday. He was 93 and lived in Wellesley and Edgartown, Mass."

Stephanie Hurder on Occupation Choice, Spouse Choice, and Family Labor Supply

What is the most important problem facing young people in modern economies? Maybe it is navigating the joint processes of choosing a career and choosing and being chosen by a spouse. This is the topic that Stephanie Hurder has chosen for her job market paper: An Integrated Model of Occupation Choice, Spouse Choice, and Family Labor Supply

(If that sounds like an ambitious title, it actually doesn't do full justice to the scope of Stephanie's work, which extends to fertility decisions...)

"Abstract:  I present an integrated model of occupation choice, spouse choice, family labor supply, and fertility that unifies an extensive empirical literature on career and family and provides predictions on the relationship among career, family, and marriage market outcomes. Two key assumptions of the model are that occupations differ both in wages and in an amenity termed flexibility, and that children require parental time that has no market substitute. Occupations with high costs of flexibility, modeled as a nonlinearity in wages, have a lower fraction of women, less positive assortative mating on earnings, and lower fertility among dual-career couples. Costly flexibility may induce high-earning couples to share home production, which rewards agents who are simultaneously high-earning and productive in child care. Empirical evidence is consistent with two main theoretical predictions: dual-career couples in more flexible occupations are more likely to have children, and professional women who achieve “career and family” in inflexible occupations are more likely to have lower-earning husbands or husbands less educated than themselves."

Stephanie’s work allows us to consider how changes in technology that make child-rearing more efficient (e.g. bottle feeding and disposable diapers) also change the labor supply of both men and women, and lead to demand for more family friendly work schedules. It also allows us to consider how these kinds of changes in women’s career aspirations and opportunities may change the demand for husbands who can efficiently produce at home as well as at work, as it changes the marriage market for women with demanding careers.

Stephanie is on the market, so you could hire her this year.

Sunday, November 25, 2012

Four Harvard students on the economics job market this year (2012-13)

Moving between universities isn't a simple thing: although I'm no longer at Harvard, I'll be helping four Harvard students go on the market this year.

Postdoctoral positions seem to be playing a larger role in the economics job market than they used to; one of the four (Scott Kominers) is going on the market after completing a two year postdoc. Another student of mine (Alex Peysakhovich) is defending this semester but taking a postdoc and planning to go on the general market next year.

On the market this year are Nikhil Agarwal, Stephanie Hurder, Scott Kominers, and Johanna Mollerstrom 

I hope to post a blog about each of them in the coming days (as I did for my students last year), although this year I am busier and later. (Perhaps I'll be able to post a bit about being busy in the next few weeks as well.)  But time and the tide and the job market wait for no man, so keep an eye out for posts on these students.

I'll update this post with links to subsequent posts on these folks.

Stephanie Hurder on Occupation Choice, Spouse Choice, and Family Labor Supply

Scott Kominers on designing matching markets for diversity

Johanna Mollerstrom on Quotas and Cooperation

update: and here's where they went--

Update on those Four Harvard students on the economics job market this year (2012-13)

Saturday, November 24, 2012

Anti-economics (If Michael Sandel Ruled the World)

The first sentence of the first paragraph: "If I ruled the world, I would rewrite the economics textbooks."

The first sentence of the second paragraph: "Consider the case for a free market in human organs—kidneys, for example."

Economics is important...sounds like someone should study it...

Friday, November 23, 2012

A philosopher looks at repugnant markets

The Dutch philosopher/economist Ingrid Robeyns writes about Roth and Satz on repugnant/noxious markets

She writes that "economists would benefit from explicitly introducing values in their analysis of repugnant markets (and markets in general)," and holds up the work of Debra Satz as a good example of how to go about this.

(Here are my previous posts related to the work of my now-colleague Debra Satz.)

Thursday, November 22, 2012

Happy Thanksgiving (and kidney exchange)

A very happy Thanksgiving to all who read this:)

I got the following very informative greeting (sort of a year-end letter and report) from my friends at the Alliance for Paired Donation. Among the exciting things going on there is an attempt to design a new financial architecture for kidney exchange.

Tuesday, November 20, 2012

Breast milk exchange?

Ben Greiner writes:

This might be an interesting upcoming story on repugnance: Due to the general positive effects, but also the social pressure to breast feed, there seems to be a developing exchange market for breast milk. For example there are organizations like


who actively promote breast milk sharing, in particular also with strangers over the internet and/or facebook.

However, in particular in the U.S. mothers are starting to ask for money in exchange for breast milk. There also seem to be stories about some mothers diluting their breast milk with water to make more money out of them. Another issue is hygiene and sterilization.

So I guess in short or long there will be a discussion about whether it is ok to share or even sell breast milk, and if trade is allowed, about how to regulate this trade given baby safety risks etc.

Monday, November 19, 2012

Game theory and differential privacy

Here's a lecture on game theory and differential privacy, by Aaron Roth, an up and coming computer scientist whose work I've followed for a long time

DIMACS Tutorials - Oct 24, 2012: Aaron Roth - Game Theory and Differential Privacy

Sunday, November 18, 2012

State laws against price gouging

Michael Giberson provides this list:

Code of Ala. § 8-31-1 thru § 8-31-6. LINK Alabama law; Any commodity or rental facility.
A.C.A. § 4-88-301 – 4-88-305.
Cal. Pen. Code § 396.
Conn. Gen. Stat. § 42-230.
District of Columbia
D.C. Code § 28-4101 thru 28-4102.
Fla. Stat. § 501.160.
O.C.G.A. § 10-1-393.4.
Haw. Rev. Stat. § 209-9
Idaho Code § 48-603; Food, fuel, pharmaceuticals, water.
Ill. Admin. Code tit. 14, §§ 465.10 thru 465.30.
Ind. Code §§ 4-6-9.1-1 thru 4-6-9.1-7; Fuel.
61 IAC 31.1(714); Merchandise needed by victims of disasters.
K.S.A. § 50-6,106; Any necessary property or service.
Ky. Rev. Stat. Ann.  § 367.374.
La. R.S. 29:732 LINK Louisiana law.
10 M.R.S.A. § 1105.
Md. Reg. Code tit. 940, § 3.18; Petroleum products only.
Mich. Stat. Ann. § 445.903(1)(z); General consumer code provisions not limited to emergencies.
Miss. Code Ann. § 75-24-25(2).
15 CSR § 60-8.030; Necessities.
New Jersey
N.J.S.A. §§ 56:8-107 to 8:109; LINK New Jersey law; Necessities.
New York
NY Gen Bus §396-r.
North Carolina
N.C. Gen. Stat. § 75-38; LINK North Carolina law.
15 OK St. §§ 777.1 thru 777.5.
ORS 401.960 thru 401.970; LINK Oregon law; Essential consumer goods and services.
Rhode Island
Rhode Island General Laws §30-15-19; Essential commodities including home heating fuels, motor fuels, food and water.
South Carolina
SC Code 39-5-145.
TCA Title 47 Chapter 18 Part 51; LINK Tennesee Law.
Tex. Bus. & Com. Code Ann. § 17.46(b)(27) LINK Texas law; Necessities.
Utah Code § 13-41-101 thru 13-41-202. Link Utah law; Retail goods and services.
9 V.S.A. § 2461d; LINK Vermont law; Petroleum or heating fuel product only.
Va. Code §§ 59.1-525 et seq., LINK Virginia law; Any necessary goods and services.
West Virginia
W.V. Code § 46A-6J-1
Wisc. ATCP Ch. 106; Link Wisconsin law.
List updated November 3, 2012 by Michael Giberson.
Please see list of resources below for useful links on price gouging. (