Price discovery

 Here's SMBC on price discovery:

 

Mouseover: "Normal People: you economists keep assuming humans have perfect pricing information Microeconomists: we need ever more complex auction mechanisms to suss out the true preferences humans are constantly hiding!" 

Experimental economics, in Economics textbooks

 Here's a paper surveying introductory economics textbooks for statements (or lack of statements) about experimental economics, over fifty years. (That's just about the period  in which I've been doing experiments, since starting a long collaboration with the late Keith Murnighan  when we were both new assistant professors at the U of I in 1974, although in fact the article covers 1970-2019.)  Note from the figure below that textbooks lag not just the progress of science, but even its widespread recognition: Kahneman and Smith won their Nobel for experiments in 2002.

Changing perceptions about experimentation in economics: 50 years of evidence from principles textbooks, by Saileshsingh Gunessee and Tom Lane, Journal of Behavioral and Experimental Economics, Volume 107, December 2023.

"Abstract: Traditionally, economists often argued experiments play little or no useful role in our science. This paper employs a novel approach to track the historical evolution of this doctrine from 1970 to 2019, by constructing a dataset of 278 introductory economics textbooks. Quantitative and qualitative analysis shows that anti-experimental views were dominant and largely unchanged until 2000, but there has since been a trend towards textbooks making positive statements about experimentation. However, remarks that economic experiments are impossible have been (almost) eliminated only in the last decade, evidencing a sluggish change in perceptions. Supplementary interviews with key textbook authors confirm the historical trend of increased enthusiasm towards experiments, and suggest they are now accepted within the economic mainstream. Our findings hold important implications for how the empirical methodology of economics is understood by practitioners and students."

Based on the introductory chapter of each textbook, they "classified the book's position on economic experiments into one of five categories:

"1. The book's introduction states that doing experiments in economics is impossible, or that economic experiments are never done (hereafter, Impossible/Not Done).

"2. The book's introduction states that doing experiments in economics is difficult, or that economic experiments are rare (hereafter, Difficult/Rare).

"3. The book's introduction states that experiments are done in economics, or refers to economic experiments without mentioning their being rare or any difficulties involved in conducting them (hereafter, Done).

"4. The book's introduction does not mention experimentation in economics (hereafter, No Mention).9

"5. The book does not contain an introductory section (hereafter, No Intro)."

JOE Job Openings for Economists: 2023 versus the past 4 years

 Here's the latest note on the job market from the AEA's  Committee on the Job Market.  It reflects a tight job market (but may also reflect that fewer than 100% of available jobs are published in the JOE, and this may be in flux). The full memo is at the link below, and I'm summarizing here some of the highlights (trigger warning:(

JOE Job Openings by Sector, 2023 versus the past 4 years 

"To: Members of the American Economic Association

From: AEA Committee on the Job Market: John Cawley (chair), Matt Gentzkow, Brooke Helppie-McFall, Al Roth, Peter Rousseau, and Wendy Stock  Date: December 8, 2023

This memo reports the cumulative number of unique job openings on Job Openings for Economists (JOE), by sector and week, compared to the same week in recent years.

Some clarifications on the data and graphs in this memo:

• ...

• The data described in this memo cover ISO weeks 1 through 48, which in 2023 ended December 3.

• The counts that are graphed and discussed are the number of job openings. To clarify, it is not the number of job listings; a listing may include multiple openings.

• ...

• On each graph, the year-to-date cumulative number of job openings is listed for the past five years separately: 2019-2023. The graphs are shown below, overall and by sector. 

Figure 1 (on p. 3) shows the total number of job openings in 2023, compared to recent years. As of the end of week 48, there have been 2,924 jobs listed on JOE since the beginning of 2023, which is 14.7% lower than at the same week in 2022, 8.7% lower than the same week in 2021, 21.9% higher than the same week in 2020 (the worst COVID year), and 15.9% lower than the same week in 2019, the last pre- COVID year.

Subsequent graphs compare the number of job openings separately by sector. Figure 2 shows that 741 full-time academic positions in the U.S. have been listed on JOE so far in 2023; this is 16.5% lower than at the same week in 2022, 0.4% lower than at the same week in 2021, 109.3% higher than at the same week in 2020, and 8.2% lower than the same week in 2019 - see p. 4.

Figure 4 shows that 949 full-time academic job openings in institutions outside the U.S. have been listed on JOE so far in 2023; that is 7.2% lower than at the same week in 2022, 9.5% lower than the same week in 2021, 11.1% higher than at the same week in 2020, and 16.7% lower than the same week in 2019 - see p. 6.

Figure 6 shows that 508 full-time non-academic positions (in the U.S. or abroad) have been listed on JOE so far in 2023; that is 26.8% lower than at the same week in 2022, 30.0% lower than at the same week in 2021, 18.2% lower than the same time in 2020 and 35.4% lower than the same week in 2019 - see p. 8.

Over the past four years, roughly 92% of the calendar year’s job listings have been posted by the end of November. In January 2024, we will post a year-end report that includes the final numbers for 2023.

The AEA Executive Committee and the Committee on the Job Market provide the following guidance for the job market, to ensure common expectations, fairness, and a thick job market. This guidance concerns the timing of interview invitations, the interviews themselves, and exploding job offers.

...

Interview with Vernon L. Smith by Sami Al-Suwailem

 Here's an interview with Vernon Smith, in which he comments on the history of economics and his place in it.

Interview with Vernon L. Smith by Sami Al-Suwailem 

"Smith was born in 1927 in Wichita, Kansas. He received his bachelor’s degree in electrical engineering at Caltech in 1949, an M.A. in economics from the University of Kansas, and a Ph.D. in economics from Harvard University in 1955.

...

"GL: In your recent book, Economics of Markets, coauthored with Sabiou Inoua, you argue (convincingly, I’d say) that “markets succeeded where theory failed.” Does that imply that economic (neoclassical) theory failed to study real-world markets well enough?

"VS: It’s more that they failed to study them at all and, in particular, failed to model price formation or price discovery in market processes.

...

"Walras not only failed to model price discovery but gave us a mechanism that required price mysteriously to be given, then used to model price change depending on the sign of excess demand. This diverted theorists from modeling price discovery and, we believe, created the illusion of progress, but it was more appropriately considered a regress occasioned by marginal analysis, which helped not a wit to address the fundamental task.

...

"GL: In your work, you argue that competitive equilibrium can be quickly achieved under very reasonable experimental conditions for consumption goods, but that this is not the case for assets where speculation may substantially distort the outcomes. Economic theory seems to pay no attention to this important difference. Why is that?

"VS: It is because standard theory tends to be insensitive to close observation: Item A is purchased in preference to item B if and only if U(A) > U(B), a theory that makes no advance prediction but rather concludes only that if A is bought rather than B it must have had higher utility value.

...

"In consumer markets, buyers attempt to buy cheap, constrained by their maximum wtp private value. Sellers try to sell dear but are limited by their minimum willingness-to-accept (wta) costs.

"The problem with asset markets is that they have a value-in-use like any consumer good but also a value-in-resale. This sets up a conflict that has to get resolved before an asset market can settle into any sort of equilibrium.

"All economic stability arises in consumer markets, while all instability arises in asset markets for re-tradable goods. Fortunately, about 75% of private products cannot be re-traded, causing great stability.

"GL: The Nobel Prize in Economics was awarded in 2012 to Lloyd S. Shapley and Alvin Roth for their work on market design. How do you see the relationship between these two branches, market design and experimental economics?

"VS: They are closely and intimately related. Indeed, my work in market design was part of my recognition in 2002, and was part of my presentation in 2001 at the Nobel Conference on Experiments in Economics, the year prior to the award."

Memorial service for Vic Fuchs

 Yesterday, at Etz Chayim Synagogue,  Palo Alto.

Here is my brief eulogy:

Vic was the patriarch of a clan, and a man of wide and old friendships. He was, by the way, also a brilliant, erudite, compassionate economist.

Emilie and I were among his new friends. In 2013 we bought a house down the hill from Vic, and held an open house; he came over, carrying his own chair-back, and was the life of the party.  In those days he used to reply to questions about how he was doing with a joke: “I’m in perfect health—my psychiatrist says it’s all in my body.”

That joke got less funny as his body continued to betray him, and after a while he stopped telling it.

When he joined us for dinner, he and Emilie would negotiate the menu. (He was a fussy eater, who liked his food very plain).

In 2016, when Vic joined us to watch one of the debates among Democratic primary candidates for president, he couldn’t contain himself when they discussed health care, and I gave him a lift home before the debate concluded, so he could write an op-ed. He was still in the game.

During Covid, he stopped leaving his house except to go to the doctor. As his mobility declined, our visits migrated from his patio, to the downstairs living room, and eventually up the half flight of stairs to his office.

Vic’s mind remained sharp. We were able to visit him until about a month before he passed away. He was worried about the world, but still eager to hear jokes, and to tell them.

He was a role model, and a pleasure to spend time with.  

Vic was a man of many parts, and his life was full of accomplishments, admirers, family and friends for whom his memory will be a blessing.

Sunday, September 17, 2023

Vic Fuchs (1924-2023)

Jobs for economists, so far this year

Here's a preliminary AEA memo on the job market.

"To: Members of the American Economic Association 

From: AEA Committee on the Job Market: John Cawley (chair), Matt Gentzkow, Brooke Helppie-McFall, Al Roth, Peter Rousseau, and Wendy Stock

Date: October 26, 2023

Re: JOE job openings by sector, 2023 versus the past 4 years

This memo reports the cumulative number of unique job openings on Job Openings for Economists (JOE), by sector and week, compared to the same week in recent years.

...

"Figure 1 (on p. 3) shows the total number of job openings in 2023, compared to recent years. As of the end of week 41, there have been 2,006 jobs listed on JOE since the beginning of 2023, which is 13.2% lower than at the same time in 2022, roughly the same (-0.10% lower) as in 2021, 51.3% higher than this time in 2020 (the worst COVID year), and 13.2% lower than 2019, the last pre-COVID year. 

"Our committee cautions that the largest number of listings in JOE occur in October and November, so by early December we’ll have a much better sense of the job market for Ph.D. economists.

...

"Further updates regarding the job market for Ph.D. economists will be posted to the Committee’s

webpage.

Econometric Society Fellows (2023), procedures, and some thoughts on prizes in general

The Econometric Society has announced its newest class of Fellows. I don't know them all, but I bet they all deserve that distinction, because it isn't easy to be recognized as a Fellow.  More on that after celebrating and congratulating these jolly good Fellows:

The Society is pleased to announce the election of 29 new Fellows of the Econometric Society.

1. Nava Ashraf, London School of Economics
2. Steve Bond, University of Oxford
3. Tilman Börgers, University of Michigan
4. Robin Burgess, London School of Economics
5. Gabriel Carroll, University of Toronto
6. Yongsung Chang, Seoul National University/Bank of Korea
7. Dean Corbae, University of Wisconsin – Madison
8. Mariacristina De Nardi, University of Minnesota
9. Ben Golub, Northwestern University
10. Christian Hellwig, Toulouse School of Economics
11. Michael Jansson, University of California, Berkeley
12. Steven Koch, University of Pretoria
13. Thierry Mayer, Sciences Po
14. Hyungsik Roger Moon, University of Southern California/Yonsei University
15. Georg Nöldeke, University of Basel
16. Emanuel Ornelas, Sao Paulo School of Economics – FGV
17. Pietro Ortoleva, Princeton University
18. Sven Rady, University of Bonn
19. Gil Riella, School of Public Policy & Government - FGV
20. Uta Schönberg, University of Hong Kong/UCL
21. Katsumi Shimotsu, University of Tokyo
22. Marciano Siniscalchi, Northwestern University
23. Vasiliki Skreta, University of Austin, Texas/UCL
24. Zheng Song, Chinese University of Hong Kong
25. Yves Sprumont, Deakin University
26. Abderrahim Taamouti, University of Liverpool Management School
27. Pierre-Olivier Weill, University of California, Los Angeles
28. Wei Xiong, Princeton University
29. Motohiro Yogo, Princeton University

The 2023 FNC consisted of Gabrielle Demange (Chair) Irene Brambilla, Richard Holden, Dilip Mookherjee, Whitney Newey, Michele Terlit, and Yaw Nyarko.

*********

The great thing about prizes and other recognitions is that they celebrate the accomplishments of the accomplished.  The complicated thing about them is that they inevitably leave out many whose accomplishments are deserving of similar celebration.

What makes the Econometric Society Fellows such an interesting recognition is that its procedures are transparent: it's a nomination process followed by an election, and the electorate is the collection of existing Fellows.  I participate each year by nominating several Fellows, and then voting for quite a few more. 

One flaw in such a system could be that the existing fellows, who initiate many of the nominations, might find it easier to think of people close to them in some sense than to think of equally deserving candidates who aren't so close.  The Fellows Nominating Committee (FNC) is an attempt to address this: their job includes nominating deserving candidates  who seem likely to have been overlooked, perhaps because they are from parts of the world that seem underrepresented among the existing Fellows.

Each year the number of nominees is a multiple of the number of elected Fellows (if memory serves only around a fifth of the nominees have been elected in recent years). The rules of the election since 2020 are that the threshold to get elected is to be included in 25% of the votes cast (and a single "vote"  if I understand correctly is a list submitted by a Fellow that can contain as many of the nominated candidates as he or she wishes to vote for).  I say "since 2020" because it is the sense of many of the past and present officers of the Society that we elect too few Fellows each year, and so the threshold has been dropping in an effort to elect more fellows.  But the equilibrium response of the voters seems to be to vote for a smaller proportion of the nominees, so that the number of new fellows doesn't seem to be increasing at the hoped for rate.

I don't know of a good model to explain all this, but it might  include some notion that the value of being a Fellow (or of receiving other recognition) is a non-monotone function of its scarcity.  If we elect too many new Fellows, this might eventually diminish the value (to existing Fellows) of being a Fellow.  But (less obviously), if we elect too few Fellows the same thing could happen, if being a Fellow stops being something that people aspire to or even have heard of.  

My sense is that being a member of the National Academies is less important among economists than in many sciences precisely because too few economists are elected, so that it comes to seem like a random recognition rather than one that recognizes success as economists define it. One of the reasons that the economics Nobel, awarded yesterday with much fanfare to Claudia Goldin, is so widely applauded, not just in the disciplines in which Nobels are awarded but among the general public as well,  is that Nobels are awarded every year in several disciplines, so that they manage to be both a scarce distinction and a familiar one. (Exceptions that test this rule are the Clark medal, awarded each year by the American Economic Association to an economist younger than 40, which has high prestige among American economists even though so few are well recognized enough at that age to be serious contenders, and the Fields medals of the International Mathematical Union, also awarded to up to four scholars under 40, every four years.)

But nothing is perfect. Congratulations again to the new Fellows, who have received the carefully considered and frugally awarded applause of their peers. 

Vic Fuchs (1924-2023)

My friend and neighbor Vic Fuchs, the dean of American health economists, passed away on Friday.  

He was just a few months short of 100, but in the last year he finished revising the third edition of his 1975 book,  Who Shall Live? Health, Economics, and Social Choice.

He bravely bore some physical ailments, but his mind remained sharp, and he was always a pleasure to talk to. (He used to joke "I'm in perfect health: my psychiatrist says its all in my body.")

He kept abreast of current events, and remained informed and concerned about the state of the health care system in the U.S., and democracy.

Vic Fuchs speaking at the memorial conference for Ken Arrow, Oct. 9, 2017

##########

Update: here's a Stanford obit:

Victor Fuchs, pioneer of health care economics, has died

Fuchs’ influence and tireless devotion to the field of health care economics and the Stanford community spanned decades.

September 18, 2023 | Krysten Crawford

Twenty Years of Marginal Revolution--econ blog pioneers

Economics in the 21st Century has blossomed, including new ways for economists to earn our livings.  Together with and alongside of that have come new ways for economists to communicate, among ourselves and with the wider public.  One of those ways is via blogs, and perhaps the most significant and most general interest economics blog has been Marginal Revolution, by Alex Tabarrok and Tyler Cowen. Yesterday MR marked its 20th anniversary.

Twenty Years of Marginal Revolution! by  Alex Tabarrok, August 23, 2023

"Who would have guessed that after twenty years Tyler and I would still be writing Marginal Revolution! Thanks especially to Tyler, we have had multiple new posts every single day for twenty years!"

Return to the Econ by Joshua Gans

 Joshua Gans indulges his inner anthropologist:

Return to the Econ  by Joshua S. Gans,  August 20, 2023

Abstract: This paper revisits the Econ tribe famously documented by Leijonhufvud (1973). In half a century, the Econ have had their practices upended by technology and, for all but a few pockets of stasis, have changed their status hierarchy with new icons that are the focus of societal energy.

"In conversations with other members of the Econ, about 30 years ago, some rogue elements of Math-Econ, despite having achieved the highest levels of modl carving, made an attempt to carve modls that were actually useful and see if they “worked.” Rumour has it that they did, in fact, work and became useful in all of all things, the allocation of empty space and body parts. These elements were expelled by the Math-Econ as unworthy and left the sect with nothing but their Nobs."

AEA Guidance on the 2023-24 Economics Job Market Cycle

In an effort to forestall/halt/slow unravelling in the market for new Ph.D. economists, the American Economic Association has released some guidelines regarding interviews and offers.

 AEA Guidance on the 2023-24 Economics Job Market Cycle

July 27, 2023

To: Members of the American Economic Association and Economics Department Chairs
From: Peter L. Rousseau, Secretary-Treasurer
Subject: AEA Guidance on the 2023-24 Economics Job Market Cycle

AEA Guidance on the 2023-24 Economics Job Market Cycle

The AEA Executive Committee, in conjunction with its Committee on the Job Market, recognizes that it is to the benefit of the profession if the job market for economists is thick, with many employers and job candidates participating in the same stages at the same time.  Moreover, the AEA's goals of diversity, equity, and inclusion are fostered by having a timeline that remains widely known and accepted, ensuring that candidates can correctly anticipate when each stage will occur.  The AEA has a role to establish professional norms, which includes ensuring fair treatment of job candidates, including that they have enough time to consider job offers.

With these goals in mind, and in light of inquiries from both job candidates and employers about how to proceed, the AEA asks that departments and other employers consider the following timeline for initial interviews and “flyouts” in the upcoming job cycle (2023-24). 

Timing of interview invitations
The AEA suggests that employers wait to extend interview invitations until the day after job market signals are transmitted to employers (roughly December 1).

Rationale: the AEA created the signaling mechanism to reduce the problem of asymmetric information and allow job candidates to credibly signal their interest to two employers. The AEA asks that employers wait to extend interview invitations until those signals have been transmitted, and to use that information to finalize their set of candidates to interview. This helps the job market in several ways: it reduces the problem of imperfect information, it helps ensure a thick market at each stage, and it promotes the AEA’s goals of diversity, equity, and inclusion. Job candidates from historically under-represented groups may lack informal networks and thus may especially rely on the signals to convey their interest. Waiting to review the signals before issuing invitations promotes a fairer, more equitable process.

We also ask that all employers indicate on EconTrack when they have extended interview invitations. This allows candidates to learn about the status of searches without visiting websites posting crowd-sourced information and potentially inappropriate other content.

Timing of interviews
Initial interviews may take place any time after the AEA signals are sent (roughly December 1). The AEA recommends that all initial interviews take place virtually (e.g. by Zoom). We suggest that interviews not take place during the AEA meeting itself (January 5-7, 2024).

Rationale: In the past, interviews were conducted in-person at the AEA/ASSA meetings. This promoted thickness of the market, because most candidates and employers were present at the meetings, but had the disadvantage of precluding both job candidates and interviewers from fully participating in AEA/ASSA sessions. 

Initial job interviews went online during COVID, and feedback indicated that the benefits of virtual first-round interviews (e.g. low monetary cost, zero cost in travel time, scheduling flexibility, convenience) outweighed the limitations (e.g. less rich interaction).

We ask that interviews NOT take place during the AEA/ASSA meetings (January 5-7, 2024) in order to allow job candidates and interviewers to participate in the conference.

Timing of flyouts
Flyouts have historically happened at times appropriate for the employer, and the AEA sees no reason to suggest otherwise.  We ask that all employers indicate on EconTrack when they have extended flyout invitations. Unlike with interviews, the AEA does not take a position on whether flyouts should be virtual or in-person.

Timing of offers and “exploding” offers
In order to ensure that the job market remains sufficiently synchronized and thick, and that candidates have a chance to compare offers, the AEA recommends that employers leave job offers open (i.e. do not require candidates to accept or decline) until at least January 31.

The AEA also strongly recommends that employers give candidates at least two weeks to consider their job offer.  We recognize that offers made late in the job market season (e.g., March or later) may be of shorter duration.  In some circumstances, employers are under heavy pressure to give less time to candidates for various reasons.  If that is absolutely necessary, we recommend that employers give candidates a minimum of one week to consider the offer, and that candidates be given advance notice of this (e.g. at the flyout stage) whenever possible. 

Rationale: Recently, there is concern about a rise in “exploding offers” – i.e., offers for which candidates are given too few days to sufficiently consider the offer and their alternatives. This can prevent candidates from learning about their options or comparing offers, and at the extreme can be coercive.  Giving candidates two weeks (or, late in the job market season, at least one week) to consider an offer is a reasonable standard.

We also ask that all employers indicate on EconTrack when they have completed or closed their search.

Job market institutions and mechanisms
Please keep in mind the various job market institutions and mechanisms created by the AEA to improve the job market:

• The JOE Network includes a database of job openings for economists.
• Employers may sign up here: https://www.aeaweb.org/joe/employer.
• Job candidates may search the database here: https://www.aeaweb.org/joe/listings.
• The JOE Network has an electronic clearinghouse for job candidates to submit job applications. Job candidates may register here: https://www.aeaweb.org/joe/candidate.
• The AEA Committee on the Job Market releases data and guidance on the job market here: https://www.aeaweb.org/joe/communications.
• EconTrack: a board on which employers can indicate when they have extended interview and flyout invitations, and closed their search: https://www.aeaweb.org/econtrack.

We encourage all employers to review and abide by Best Practices for Economists to Build a More Diverse, Inclusive, and Productive Profession, and in particular those for conducting a fair recruiting process.

Thank you for helping to ensure a transparent and equitable job market for new Ph.D. economists.  

Leo Hurwicz (1917-2008), biography

 Here's a web site devoted to the biography of Leo Hurwicz, by his son Michael: Leonid Hurwicz: Intelligent Designer

Ehud Kalai, interviewed on the past and future of game theory

Here's a half-hour video interview of Ehud Kalai, by Sandeep Baliga, that touches on the history of game theory at Northwestern and elsewhere, his work on axiomatic models of bargaining, Econ-CS (and the Kalai Prize), and more.

 

School choice and related matching algorithms in France, by Vincent Iehlé and Julien Jacqmin

Here's a recent paper that looks at the assignment of students to some of France's Grandes Ecoles, and draws some conclusions about the preferences for those schools.

SIGEM : analyse de la procédure d’affectation dans les grandes écoles de management,, Vincent Iehlé, Julien Jacqmin, Dans Revue économique 2023/2 (Vol. 74), pages 139 à 168 (SIGEM: analysis of the assignment procedure in major management schools)

"First, we list the expected properties of the assignments produced by the SIGEM. To do this we identify the SIGEM algorithm. It is quite standard in this type of environment since it is the “schools” version of the algorithm of Gale and Shapley [1962]. Based on this information, we show that assignments satisfy a stability property that is crucial in educational systems since it guarantees fair treatment of declared wishes and rankings. On the other hand, the use of this version of the algorithm of Gale and Shapley [1962], in opposition to the "candidate" version, raises two reservations concerning, on the one hand, the sub-optimality of the assignments from the point of view candidates and, on the other, the theoretical absence of simple strategies for candidates to play when submitting their wishes. This theoretical analysis of the algorithm is completed by a discussion on the specificities of the SIGEM procedure which can explain the formation of strategic behaviors. The second contribution concerns the use made of the results of this procedure in the case of SIGEM. We show how post-assignment data is used to determine the influential ranking of SIGEM from the so-called cross-dismissal matrix, itself based on the candidates' revealed preferences and their final assignments. The last contribution concerns the exploitation of a stylized fact which justifies the joint analysis of the algorithm and the SIGEM classification. The post-assignment data indeed reveal the existence of a hierarchy of schools that is very rigid and that achieves a consensus among students. This point is particularly interesting because it finally allows to have a finer look at the theoretical properties of the algorithm, the alignment of the preferences of the candidates tending to limit the impact of the negative effects associated with the use of the version "schools" of the algorithm of Gale and Shapley [1962]."

...

"Figure 2 presents for each school the number of ranked candidates and the number of wishes expressed for the school among these ranked. It seems to confirm the existence of these voluntary self-censorship strategies. In particular, we observe a significant loss for schools of average attractiveness (for example, AUDENCIA, NEOMA, SKEMA) which are more likely to be subject to both downward and upward truncation on the part of candidates ."

********

Recall also, 

Strategic Issues in the French Academic Job Market, by Guillaume Haeringer, Vincent Iehlé In Revue économique Volume 61, Issue 4, 2010, pages 697 to 721

Dissertation advisors and job market outcomes by Rose and Shekhar

 Here's a paper on the economics job market, and the influence of dissertation advisers.

Adviser Connectedness and Placement Outcomes in the Economics Job Market, by Michael E. Rose and Suraj Shekhar, forthcoming in Labour Economics

Abstract: We study the role of social networks in the academic job market for graduate students of Economics. We find that the connectedness of a student’s advisor in the coauthor network significantly improves her job market outcome. We use two identification strategies and find that a) higher Eigenvector centrality of an adviser leads to her student getting placed at a better ranked institution, and b) larger distance between an adviser and an institution decreases the probability that her students are placed there. Our study sheds light on the importance of social connections in a labour market where information frictions regarding job openings are virtually absent.

...

"Our setting, the academic job market for Economists, is special in that information frictions regarding job openings are (almost) absent due to Job Openings for Economists. Thus, our finding that social networks play a role in this market is likely because they help decrease the uncertainty about an applicant’s quality."

********

I'm reminded of the timeless joke about how rabbits eat wolves: if you don't know it, there are many versions on the internet, here  (and this one comes with a bonus joke: Rabbit's Ph.D. Thesis and Lion's Watch Repair Business).

How do (should?) economists study repugnance?

 Here's a recent paper by Peter Cserne that looks at different ways that economists study repugnance:

Cserne, P. (2023). Economic analyses of repugnant market transactions: A modest typology. Journal of Institutional Economics, 1-14. doi:10.1017/S1744137423000139

"Abstract: Economic accounts of repugnance concern two broad questions: the rationalisation of sentiments of repugnance (do emotional and visceral reactions of repugnance track valid reasons for not engaging in or condemning certain (trans)actions?) and institutional design (how to institute, regulate, or restrict markets in response to reasonable objections). If repugnance expresses valid practical reasons for regulating or limiting markets, our institutions should acknowledge and express these. If attitudes of repugnance are not rationalisable in the sense of instrumental or moral values, we should disregard or eventually counteract or reduce them. Focusing on a special case of repugnance, when commodification, i.e., the sale of goods or services for money meets societal disapproval, this paper identifies three characteristic ways to combine conceptual, empirical, and normative arguments and map repugnance into a disciplinary ‘epistemic frame’ of economics: repugnance as taste; repugnance as proxy for market failures or moral reasons; repugnance as hypocrisy or contingent cultural fact. Correspondingly, economists advise to (1) work around; (2) make sense of; and (3) explain away people's sentiments of repugnance."

...

"In recent decades, the economic discourse on repugnance has become rich and dense. While the moral limits of markets have been discussed in philosophy and various social and policy sciences for centuries, in the last decades, repugnance as a possible limit to markets has been increasingly subject to technical economic analysis as well (Khalil and Marciano, Reference Khalil and Marciano2018; Roth, Reference Roth2007; Tirole, Reference Tirole2017: 33–50). To be sure, from a longer historical perspective, economists have always been concerned with moral sentiments, including repugnance.

...

"Regarding the moral limits of markets, there is a range of (a) substantive views. For the purposes of this paper, we roughly distinguish three stances: commodification, anti-commodification, and anti-anti-commodification. These are expressed in different (b) conceptual categories: as moral preferences; moral externalities or merit goods; and hypocrisy or cultural facts. Together, they allow to express the substantive concerns in (c) analytical frameworks, in other words, they provide the technical terms for economists to, respectively: work around; rationalise, i.e., make sense of; and explain away people's repugnance. Thus, I suggest distinguishing three substantive stances on repugnance in economics, combining conceptual choices and normative commitments into analytical frameworks.

"First, economists may conceptualise repugnance as a taste or (moral) preference. Following the dictum de gustibus non est disputandum (Stigler and Becker, Reference Stigler and Becker1977), they engage in technical normative analysis and institutional design in an engineering mode (Roth, Reference Roth2002). Normatively, they orient themselves in favour of commodification, i.e., extending the scope of markets. Correspondingly, their analytical strategy is to propose policies to ‘work around’ social sentiments of repugnance.

"Second, economists may conceptualise repugnance in terms of (moral) externality or merit goods, i.e., as versions of or proxies for market failures. In doing so, they make sense of sentiments of repugnance, in terms of ordinary economic analysis. Correspondingly, they propose policies to justify limiting or regulating markets. They engage in the rationalisation of anti-commodification sentiments in terms of public reasonableness.

"Third, economists may conceptualise repugnance as an expression of hypocrisy or as a cultural fact of no independent normative weight. Normatively, they engage in demystifying repugnance either by naturalising it or philosophically debunking sentiments of repugnance as unreasonable ‘romance’; their analytical strategy could be characterised as anti-anti-commodification insofar as they aim to explain away anti-commodification arguments as irrelevant for policy debates around institutional design."

Victor Elias (1937-2023)

Victor Elias died last week, at 85.  He had a strong influence on academic economics in Argentina, not least through the many influential Argentine economists he helped inspire to study in the U.S., particularly at the University of Chicago, where he got his Ph.D. in 1969.

Here's the funeral notice published yesterday in La Nacion:

"Victor Elias, RIP. It is with deep regret that we bid farewell to a great talent and person, with countless  disciples, admirers and friends, economists scattered throughout the world. We accompany the entire community of Tucuman economists, the UNT and especially his children, grandchildren and great-grandson. Signed by: Fernando Alvarez, Hugo Hopenhayn, Rody Manuelli, Juan Pablo Nicolini, Alvin Roth, Silvana Tenreyro, Iván Werning."

Here's the obit from La Gaceta

Murió el economista tucumano Víctor Elías. Tuvo una reconocida trayectoria como académico en la UNT. Tenía 85 años.[Tucuman economist Víctor Elías died. He had a recognized career as an academic at UNT. He was 85 years old.]

"The renowned Tucuman economist and academic Víctor Elías passed away at the age of 85, leaving an enormous legacy that has marked several generations of Tucumans who studied Economics at the National University of Tucumán. 

"The son of Syrian immigrants, he was born in the capital of Tucumán on July 21, 1937 and due to his ancestry he received the nickname "Turk", as he was known inside and outside academic circles. "

Victor Elias and Al Roth, Tucuman, November 2016, photo by Ivan Werning

 

AEA committee on the job market considers early and exploding offers

 John Cawley chairs the AEA committee on the job market, and recently tweeted the request for information below.  Feel free to communicate with him on twitter or directly, as I'll be glad to rely on him to compile and forward all the responses. (I'm one of the few economists not on most social media...but I really will try to read all responses:) (Click to enlarge...)

Advice on dealing with exploding offers in the Economics job market

 The market for new Economics Ph.D.s is in flux, with interviews this year being conducted remotely by Zoom rather than in person at the annual January conference. (Zoom interviews were a Covid innovation that seems likely to stay--mostly because remote interviews seemed to work well.)  But issues of timing can be delicate, and there's some concern that, now that initial interviews aren't being synchonized with the annual meetings, we're seeing more early interviews, flyouts (subsequent in-person, on campus interviews) and offers than in previous years, including more offers that require replies very quickly--exploding offers.  Exploding offers cause difficulties to those who receive them, and they contribute to market-wide difficulties, as they can cause the market to move earlier from year to year, i.e. to unravel into very early offers at diffuse times, so that the market loses thickness.

So...I wasn't too surprised to get an email this week from a colleague who has a student on the market who presently has two exploding offers, each with a one-week deadline.  My colleague writes that his student  presently has flyouts scheduled with other schools through February, and so won't even have visited them by the time his exploding offers expire. "He would much prefer an offer from several of them to these 2 current offers--but I have no idea what is the likelihood of getting offers from them."

He asks me "Does any entity such as the ASSA, Stanford, etc. have a policy that I can mention to these schools? "  And he asks for my advice.  I don't have great advice, but here's my slightly redacted reply:

"The AEA doesn’t have a good policy on this, but the AFA does: see my blog post here

Tuesday, August 2, 2022 American Finance Association guidelines to prevent unravelling of the job market  (it says) “the AFA promotes the following professional norm: If a job candidate receives and accepts a coercive exploding offer (i.e., one that expires before February 20), the AFA does not consider such an acceptance to be binding.”

 "That said, talking to the schools that have issued coercive exploding offers is a good idea, and it may or may not help.  I think there are three main reasons they might make exploding offers.

• 1.       Pure evil: they think your student might get a better offer if they wait, and want to capture him before that.
• 2.       Fear that their other candidates will disappear: they may have a second choice candidate who already has an exploding offer, in which case they may be able to tell you when that offer explodes.  But maybe their fear is less focused than that, in which case you might get them to extend the offer on the understanding that they can make it explode later.
• 3.       Boilerplate: they may have just copy-pasted from some template that had a short fuse offer. In this case there’s a good chance they’ll relax the drop dead date.

 "I’ve encountered other reasons as well. In the 2008 financial crisis some of our students got exploding offers, and when I called one school to inquire, was told that their dean wouldn’t allow them to schedule any more flyouts until/unless they’d been rejected by our student.

 "There are labor markets that suffer a great deal from exploding offers (e.g. private equity right now, among others).  But it’s still not the norm in economics, so I think you have a good chance of getting some more time by asking for it."

Paul David (1935-2023)

 My Stanford colleague Paul David has died. He was an exceptional, iconic economic historian.

Gavin Wright has written this obit:

Professor Paul David died at the age of 87

"Always an economic historian, Paul soon extended his horizons in diverse and seemingly disparate ways.  He became a strong advocate of the view that historical research should be fundamental to the economics discipline; in brief; “history matters.”  The essence of the argument was captured by Paul’s incisive account of the persistence of the QWERTY typewriter keyboard despite its technical disadvantages, one of the most cited articles in all of economics (AER 1985).  “History Matters” is the title of a festschrift presented by a group of Paul’s former students in 2004, in which the editors write: “No scholar has more forcefully and influentially argued the case for making economics a truly historical social science – one that, like evolutionary biology, gives past events a central role in understanding the present.” 

"A continuing focus throughout Paul’s career was the diffusion of new technologies.  An important early paper considered the adoption of the mechanical reaper in the American Midwest.  Invention occurred in the 1830s, yet the first wave of adoption occurred only in the 1850s.  The twenty-year delay, according to Paul, was explained by the fact that a minimum scale was required to cover the fixed costs of purchasing the reaper.  Only when farms size passed this “threshold” did mechanization make economic sense.  Specialists have debated the specifics ever since, but the basic form of Paul’s diffusion model has been highly influential.  In many respects it formalized the accounts of delayed diffusion presented by our late colleague Nate Rosenberg, and thus became something of a “Stanford school” of thought in this area.  Scrolling forward to 1990, the era of the “Solow paradox,” Paul offered an analogy between the delayed productivity effects of computer technology and a similar lag in the impact of electrification between the 1880s and the 1920s.  With the IT-driven productivity surge of the late 1990s, this article also attained iconic status (AER 1990)."