Akhil Vohra on unravelling (and on the job market this year)

Akhil Vohra, who will be finishing his Ph.D. in Economics at Stanford this year, has been thinking about unraveling for a long time.  His job market paper explores a novel channel by which markets can unravel in time, with early, inefficient hiring, even when talent isn't scarce.

Unraveling and Inefficient Matching by Akhil Vohra 

Job Market Paper, November 5, 2020

Abstract: Labor markets are said to unravel if the matches between workers and firms

occur inefficiently early, based on limited information. I argue that a significant determinant of unraveling is the transparency of the secondary market, where firms can poach workers employed by other firms. I propose a model of interviewing and hiring that allows firms to hire on the secondary market as well as at the entry level. Unraveling arises as a strategic decision by low-tier firms to prevent poaching. While early matching reduces the probability of hiring a high type worker, it prevents rivals from learning about the worker, making poaching difficult. As a result, unraveling can occur even in labor markets without a shortage of talent. When secondary markets are very transparent, unraveling disappears. However, the resulting matching is still inefficient due to the incentives of low-tier firms to communicate that they have not hired top-quality workers. Coordinating the timing of hiring does not mitigate the inefficiencies because firms continue to act strategically to prevent poaching.

You can see him talk about his job market paper in this four minute video:

 

He applies his model to a number of labor markets, both those which are unraveled and those which aren't:

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My advice if you're hiring: check him out.

Information from the AEA on this year's new Ph.D. job market

Here's an announcement that came by email from the American Economic Association:

Webinar on the new Ph.D. Job Market, hosted by the AEA ad hoc Committee on the Job Market

August 25, 2020 To: Members of the American Economic Association From: Peter L. Rousseau, Secretary-Treasurer The AEA's ad hoc Committee on the Job Market will host a webinar on the job market for new Ph.D. economists on Wednesday, September 2, from 3:00 – 4:30 p.m. ET.  The purpose of the webinar is to share information about the structure and timeline of the job market for new Economics Ph.D.s, and is intended to help job market candidates in 2020-21 as well as their advisors and placement committees. A pre-recorded video is available at https://www.aeaweb.org/joe/communications which provides information on the Economics Ph.D. job market, such as timelines, institutions, and general advice. The live 90 minute webinar will then be devoted to Q&A on either the material in the presentation or any other questions about the job market that participants may have.  Those answering questions at the webinar include the following: Aditya Aladangady, Board of Governors of the Federal Reserve John Cawley, Cornell University Matthew Gentzkow, Stanford University Brooke Helppie-McFall, University of Michigan Elisabeth "Bitsy" Perlman, U.S. Census Bureau Peter Rousseau, Vanderbilt University and Secretary-Treasurer of the AEA Max Schmeiser, Head of Data Science at Twitter Wendy Stock, Montana State University Omari Swinton, Chair of the Economics Department at Howard University The pre-recorded video and the link to the live webinar will be available from the committee's webpage: https://www.aeaweb.org/joe/communications. This webinar is free and available to all.  Feel free to share with others.  *********** The communications page includes the following: Webinar on the Economics Ph.D. Job Market Part I (Asynchronous): Recorded video providing information on the job market timeline, institutions, etc. Part II (Synchronous): Live Q&A on Wednesday, Sept 2, 3:00 – 4:30 pm EDT (Link coming soon) AEA Guidance on Timeline for the 2020-21 Economics Job Cycle (August 20, 2020) Memo on the Impact of the 2008-09 Financial Crisis on the Demand for Ph.D. Economists (August 11, 2020) Memo on trends in Job Listings on JOE Network (July 14, 2020)

Admissions to polytechnics in Finland, by Kristian Koerselman

Here's a paper that gives a very clear description of the centralized application process for Finnish polytechnics (applied universities), which gives applicants a complicated strategic problem, and results in many applicants re-applying in subsequent years.

Assignments are by a (school proposing) deferred acceptance algorithm, but applicants get extra points in a school's preferences by listing it first, they can only list four programs, and they must choose which exams to take.

Why Finnish polytechnics reject top applicants
Kristian Koerselman
Education Economics, July 2020

"The Finnish polytechnic assignment provides us with an example where applicants are asked to strategize in their applications while having poor prior information on the set of programs that would admit them. These features should in and of themselves already be expected to cause a poor assignment outcome. I highlight the additional role which entrance exams appear to play in creating what should arguably be seen as a misrepresentation of true admission criteria analogous to a misrepresentation of applicants' true preferences. Because applicants take and retake different entrance exams in different years, programs rank the same applicants differently in different years, giving applicants an incentive to reapply even if they were originally assigned to their within-year most preferred feasible program.
...
"Finland provides 9 years of compulsory, comprehensive education, after which almost all students continue in approximately equal proportions to either an academically-oriented high school or to a vocational school. High school concludes with a set of nationally standardized and externally graded matriculation exams. Though students have a reasonable amount of freedom in choosing the subjects they want to take an exam in, they have to take into account that different higher education programs value matriculation exam grades in different subjects differently.

Higher education is provided by polytechnics, also called universities of applied sciences, and by universities. The former mainly offer bachelor programs, and the latter mainly combined bachelor/master programs. About half of each birth cohort ever enrolls in higher education, with total yearly admissions somewhat larger at polytechnics than at universities. Although it is not uncommon for vocational school graduates to apply to a polytechnic, high school graduates are the largest group of polytechnic applicants.
...
"Higher education applications are extremely competitive, with for example only about one-third of polytechnic applicants being admitted nationally each year. Rejected applicants are likely to reapply, often multiple years, and even admitted applicants often reapply. Re-applications are an important reason why the numbers of applicants per seat are so large. Applicants effectively queue into higher education, likely causing them to be admitted at an unnecessarily old age, and therefore also to graduate at an unnecessarily old age. The 2011 polytechnic applicants on which this study is based for example had on average graduated from high school already two and a half years earlier, and many of them would be older still when they were finally admitted to the higher education program they would eventually graduate from.

"All higher education applications are made to a national clearinghouse. Polytechnic admission decisions are generally made centrally by the clearinghouse itself, while university admission decisions are generally not. In this paper, I analyze the 2011 centralized assignment of high school graduates to Finnish polytechnics. In total, 50,894 high school graduates applied to 16,655 seats in 440 programs, divided over 8 fields.

"The application process starts in March, when applicants can apply to up to four programs in order of preference. Applicants must then choose which entrance exams to prepare for and take, typically in May or June. After the entrance exams have been graded, an admission score is calculated for each application. This score is mainly based on applicants' matriculation exam grade point averages and entrance exam results. The weights assigned to different matriculation exam subjects are typically shared within each field, and entrance exams tend to be shared as well. Extra points are awarded for the first listed choice, as well as for factors like relevant labor market experience. The relative weight of the different admission score components in determining the admission score can be seen in Table 2.

"Based on their submitted preference ordering and on their admission scores, applicants are assigned to programs through a centrally run program-proposing deferred acceptance algorithm, each applicant either being admitted to a single program or not being assigned at all. Admitted applicants then either accept their seat or reject it. A much smaller second round of offers is sent out by the programs themselves to make up for first-round rejections. The second round of the process ends at the start of the fall term in September.
...
"Applicants have multiple reasons to strategize in choosing which programs to apply to. Among others, the fact that applicants receive extra points for their first listed choice implies that they will want to list a program first where they have a chance to actually be admitted. Similarly, the four-program limitation means not only that there may be programs acceptable to the applicant which the applicant is not allowed to list, but also that the applicant will need to use the four allowed applications wisely. Third, the applicant faces a strategic choice in which entrance exams to prepare for and take, typically concentrating all effort on a single application. Fourth, the use of a program-proposing algorithm may in and of itself already give applicants an incentive to strategize."
...
"Though applicants receive good indications of their matriculation exam grades before they apply, and may be aware of previous years' admission score cut-offs, they however necessarily learn their entrance exam scores only after choosing where to apply and which entrance exams to take, adding a considerable degree of uncertainty to their application.
...
"When classifying applicants into thirds based on their program-specific matriculation exam GPA, as many as 54% of top third applicants remain unassigned anywhere. Even using the actual admission score, 34% of top third applicants remain unassigned.
...
"Even if applicants do apply to more than one program, their admission chances are relatively low for programs listed second, third and fourth, with the probability of being assigned to a program being 27% for the program listed first, but only between 3 and 4 per cent for programs listed lower. This is partly due to the extra points given for the first listed program, but is probably also related to applicants' strategic choices on which entrance exams to take. "

History job market conference interviews are history

Inside Higher Ed has the story on the history job market (which they conflate with the AEA's recent decision to try to eliminate interviews in hotel rooms):

Killing the Conference Interview
American Historical Association ends annual meeting interviews and American Economic Association ends single hotel room interviews.
By Colleen Flaherty

"It's official: the American Historical Association will stop supporting first-round job interviews at its annual meeting.

"The group floated the idea this spring, citing a decline in registered departmental searches -- from 270 for the 2005 conference to 20 this year -- and a desire to take the meeting in new directions.

"After hearing overwhelming positive feedback from members, the AHA Council voted to end the 70-year-old tradition."

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I'm not intimately familiar with the History job market, but for economists, I think the tradition of interviewing at the January meetings has had a good effect on the job market, helping to coordinate timings, reduce costs, and provide a thick early part of the market.  I hope that we won't be starting on the road to moving interviews elsewhere and (particularly) at earlier and more diffuse times.

Game theory post docs at the Technion

Ido Erev sends the following announcement

Post-Doc Positions
The Game Theory Group at the Technion is inviting applications for fully funded postdoctoral positions in Game Theory (broadly defined).

As a postdoc at our group, you will work with a varied team comprised of both leading researchers and young, highly motivated colleagues, all of whom are passionate about topics at the intersection of computer science, economics, operations research, and game theory. 

Requirements:  (1) A PhD degree obtained between October 1, 2015 and September 30, 2020. (2) Evidence of successful research accomplishments (discipline dependent; e.g., in CS, such evidence would usually be publications at top-tier conferences).

If you fit this profile and are passionate about an academic research career path, we would love to hear from you. Women are particularly encouraged to apply.

Applications will be considered on a rolling basis until positions are filled. The exact starting date is flexible/negotiable. Positions are for 1 year and are renewable for up to 3 years. There are no teaching duties (in some cases, compensation for performing additional teaching duties may be arranged). Further information is available online at: https://gametheory.net.technion.ac.il 

Applications should be addressed to GameTheory@technion.ac.il and should include:
1. a)    CV
2. b)    One representing research paper (possibly published)
3. c)    A short research statement (no more than 200 words)
4. d)    3 recommendation letters (please ask for these to be sent directly to GameTheory@technion.ac.il)

Typically post-doctoral scholarships range from $25,000 to $40,000 per year and carry no teaching duties. Note that scholarship income is not taxed in Israel and this may apply to non-residents through tax treaties. Also, the cost of living in Haifa is comparatively low. For example, the monthly rental of a one/two bedroom apartment in Haifa costs around $500-$800. For general information about doing a postdoc at the Technion, visit the Technion International School.
**********

My two cents: Haifa is a very agreeable city, and Ido Erev is one of the most exciting scientists I know...

Black markets for academic work, not just for homework anymore

Inside Higher Ed lets you know where you can buy a Ph.D. dissertation...and Clarivate (which publishes the Web of Science) let's you know where you can buy co-authorship in an already accepted academic paper. And the WSJ reveals that some students complain to the Better Business Bureau about sub-par contract cheating services.

Ukraine hosts 46 firms selling ghost-written dissertations
In 2009, there were 16 firms that sold completed dissertations; in 2016, the number nearly tripled to 46 registered enterprises.
By Ararat L. Osipian

"An entire market emerged in Ukraine that offers ghost-written dissertations for a price. This market consists not only of individuals, but somewhat remarkably, also officially-registered firms. In 2009, there were 16 such firms; in 2016, the number nearly tripled with 46 registered enterprises that sell completed dissertations. Their clients lack time and knowledge, but certainly not money. Ukraine is a country with high levels of human capital but low average household incomes. This keeps dissertations reasonably priced and affordable to corrupt state bureaucrats and businesspersons. Highly educated academics earn additional income by producing dissertations for sale."
*************

Protecting the integrity of the scientific record from a new kind of academic misconduct
by VALENTIN BOGOROV

"At the Web of Science Group, we pride ourselves on protecting the integrity of the scholarly record. We are champions of high editorial standards and research practices, and our global team of in-house, publisher-independent editors are experts in their subjects.  So we are ever-vigilant to trends in unethical research practices, which pose a growing threat to legitimate scholarship worldwide.  Recently, we uncovered a new trend which we think is important to bring to light for wider discussion and action.

Our team in Russia received a tip from the local research community to a new form of publication fraud. The tip led to a website,  http://123mi.ru  set up by unscrupulous operators to serve as a virtual marketplace where authors can buy or sell authorship in academic manuscripts accepted for publication. This kind of peer-to-peer sharing, in “broad daylight” is not something we’ve seen before – so we conducted a quick analysis of the site, and its data, before taking swift action to alert our friends and colleagues in the scientific community.

...

"The geography of transactions covers primarily the post-Soviet area (Russia, Kazakhstan and Ukraine), but there are authorships sold outside of that region, notably to the United Arab Emirates, China and the UK."

************

And then there's homework...this from the WSJ

Schools Fight Websites That Sell Homework Help
Hundreds of sites claiming to offer tutoring services are often selling completed assignments to students
By Tawnell D. Hobbs, Aug. 12, 2019 

"The practice, sometimes called contract cheating by educators, was initially targeted at students in college but has since spread to include high-school students, according to a review of websites offering the service.
...
"A Wall Street Journal review of 100 websites offering tutoring help or writing services, or both, found they promise custom high-school and college work. Some websites offer to run work through anti-plagiarism programs to prove it is original.
...
"Seventeen states outlaw selling written work to another for academic credit, said Dr. Bertram Gallant, a board member of the International Center for Academic Integrity, a consortium of academic institutions and individuals focused on integrity in academic communities. But enforcement is difficult since the location of the sites can be hard to determine, she said.

Several sites reviewed by the Journal let students put the work out for bid. “Often, customers may have two or more writers bidding on their project, so before selecting a writer, customers can check the different writers’ ratings and reviews,” said Avery Morgan, spokesman for a site called EduBirdie that launched in 2015 and specializes in essay writing.
...
"Students unhappy with cheating websites cite missed deadlines and subpar work, according to complaints filed with the Better Business Bureau and online reviews. Some students also allege that tutors demanded more money than agreed upon and made threats."

De-biasing academic hiring?

This is the season when new Ph.D.'s in Economics are hired as assistant professors. More senior professors are hired throughout the year. A constant source of concern is how to promote a diverse professoriate.  But because academics are very different from one another, we have to get to know potential candidates reasonably well before we hire them. Just for example, they have papers that have to be read, and they typically give a seminar before the whole faculty once they get far enough in the process.

So...along with learning about what they have studied and written about, we also learn their race and gender, and where they studied and with whom, and what the senior scholars in their field think about them, and a host of other things that could influence our collective decision when it comes time to vote who to hire.

Here are two stories, from Britain and Finland, about efforts to design the faculty hiring process to remove "extraneous" considerations.  I am very skeptical that we can learn all that we need to know about candidates without learning extraneous things, so I would be astonished if these proposals gain traction.

Both articles, linked below from Inside Higher Ed,  appeared in Times Higher Education.

From Britain:

Trying to ‘De-Bias’ Faculty Recruiting
Can a shift in the way candidates are evaluated eliminate bias based on gender, race and background?
By John Morgan for Times Higher Education  January 31, 2019

"CVs and interviews are being removed from university hiring processes under a new approach to “de-bias” academic recruitment being pioneered in Britain.

"The Recruiting for Difference approach, billed as an attempt to address biases around gender, ethnicity and university background, is led by the recruitment firm Diversity by Design, co-founded by the writer and broadcaster Simon Fanshawe, former chair of council at the University of Sussex.

"Fanshawe, a founder of the LGBT equality charity Stonewall, said the aim was to “de-bias” to the greatest extent possible, explaining that, under this approach, “what you don’t use in the short-listing process at all is CVs.” He argued that stripping out CVs allowed universities to see the true qualities of the people they were considering for jobs.

"The application process allows applicants to state which journals they have published in and the roles they played in these papers. But candidates’ names do not figure in the short-listing process -- thus their gender and ethnicity are not revealed -- and at no stage of the hiring process is it disclosed at which universities candidates have worked or studied."
****************

From Finland:
U of Helsinki Tries Anonymized Academic Hiring--Pilot project seeks to eliminate bias.
By Rachael Pells for Times Higher Education  December 20, 2018

"Finland’s leading university is trying the use of anonymized applications for academic roles as part of a nationwide push toward greater equality in hiring practices.

"The University of Helsinki confirmed that it was conducting two pilot programs focused on academic recruitment, in which applications were stripped of candidates’ names, dates of birth, ethnicities and genders.

"Universities are increasingly experimenting with name-blind student recruitment, and advocates of its use in the hiring process argue that it could help to limit the impact of unconscious biases that penalize women and minorities.

"However, there are questions over whether it could catch on in academic departments, in which recruitment decisions are closely tied to a researcher’s publication record and scholarly reputation."

EconTrack: The AEA's Job Market Information Board

The AEA has launched a job market information board, which will collect information about the progress of interviews and flyouts for (I imagine) jobs that advertise in the JOE.

Here it is:  EconTrack: The AEA's Job Market Information Board, and the headings for the information they hope to track as the job market develops are these:

Institution, Job Title, Fields, Application Deadline, Interviewing at ASSA?, Interview Invitations Issued, Campus Visits Issued, List of Campus Invitees...

Faculty openings at Stanford Management Science and Engineering

Faculty Openings in MS&E

Position Title
Tenure-track Assistant Professor/Untenured Associate Professor

Position Description
We invite applications from individuals working at the frontiers of Management Science and Engineering, broadly defined, including candidates from engineering and the mathematical, computational, medical, physical, and behavioral and social sciences.

Appointments are to tenure-line junior faculty positions at the Assistant or untenured Associate Professor level. Please visit our website for more information about the MS&E Department at:
http://www.stanford.edu/dept/MSandE.

Qualifications
An earned PhD, evidence of the ability to pursue a program of research, and a strong commitment to graduate and undergraduate teaching are required. A successful candidate will be expected to teach courses at the graduate and undergraduate levels and to build and lead a team of graduate students in PhD research.

Law Review submissions

Law reviews, often among the most prestigious publications for law professors, are unusual in a number of respects.*  They are edited by students. And they allow multiple submissions: a paper may be simultaneously submitted to many journals, which respond with exploding offers of acceptances.

Northwestern U. Law Review is exploring a different model: different from the usual law review submissions, but still very different from most academic disciplines.  Here's the announcement via the Faculty Lounge:

Northwestern University Law Review Exclusive Submission Window

This just in:

The Northwestern University Law Review is pleased to announce our exclusive submission track for Spring 2018 submissions. We will accept exclusive submissions from January 1, 2018-January 14, 2018 at 11:59 PM Central Time. For all articles submitted in accordance with the instructions outlined below, the Law Review guarantees Articles Board consideration and a publication decision by February 5, 2018.

More details are here, and after the jump.

Articles receiving a publication offer via the exclusive submission track will be published in Volume 113 in the fall of 2018. Participating authors must agree to withhold the article submitted through our exclusive submission track from submission to any other publication until receiving a decision back from us. Authors not receiving publication offers are free to submit elsewhere after notification of our publication decision, which will occur no later than February 5, 2018. 

Please note that by submitting an article via the exclusive submission track, the author agrees to accept a binding publication offer, should one be extended

*************


*related posts:

Wednesday, January 20, 2010

Peer review and markets for ideas, in law and science

Thursday, April 21, 2011

Exploding offers and the market culture of law reviews

Tuesday, September 25, 2012

Law review submissions: too cheap?

AEA interviews: the video

Going to the AEA to interview for a job?  Here's a video in which various already-employed economists reflect on the process of becoming employed...

Here's the webpage: Interviewing at AEA? Watch this first.  Laughs, Scares, and Wisdom from AEAs Past!

The academic market for operations researchers

Operations Academia is a relatively new website, organized by a postdoctoral fellow in his free time (see below) whose purpose is to provide a centralized information location for jobs and job candidates in Operations.

"This website is intended to appeal to any Operations academic (broadly defined), but particularly to those who are looking for information about this academic year's Operations Job Market. 

Specifically, are you a:

• Job Market Candidate? Help Universities and Business Schools find you easier by creating your research profile.

• University/ Business School with an open position? Reach out a wider audience for your academic vacancies by posting a job.

• Candidate who has already accepted an academic placement? Let the rest of the operations community know about it by updating this form.

Or, were you on the Job Market last year? Help us further understand the process of finding an Academic placement in Operations (broadly defined), by taking our Annual Job Market Survey.

Suggestions on how to improve this website and organize our Job Market? Please submit here an idea and/ or vote for new features suggested by others. Or, otherwise contact us."

About 

 "Our vision is to make the search for an academic job in Operations (and related areas) more efficient and transparent. We also aim to better understand the dynamics and research trends in our field to better inform: PhD Candidates, recently hired faculty members and hiring decision-makers, as well as prospective graduate Students who wish to apply to PhD Programmes in our field.

In this website you will find the first Job Market Survey ever conducted for Job Market Candidates in Operations Management/Research (and related areas), academic job postings, PhD Candidates looking for an academic position, confirmed placements, and recently hired faculty members.

This website is supported by the MSOM Society of INFORMS and is owned and managed by Konstantinos I. Stouras, Post-doctoral Research Fellow, Operations Management, University of Virginia (Darden School of Business) in his free time. All inputs are posted by the academic community by verified individuals. We are always open for feedback and suggestions on how to improve this initiative; please post suggested improvements/comments, and vote for already existing ones to encourage their development."

The job market for economists: Planet Money podcast (24 minutes)

If you want to relive (or anticipate) your experience on the job market for new Ph.D. economists, here is the podcast for you.  Journalists Adrian Ma and Robert Smith follow  a brave new Ph.D. who talked to them while he interviewed for jobs. They also talk to many other people at the AEA meetings in Chicago, and discuss how some candidates might fall through the cracks. They talk to me (around minute 15) about the signaling mechanism that the AEA introduced. (The candidate they followed signaled the Census Bureau, just before the federal government announced a hiring freeze, but is now gainfully employed:)

#769: Speed Dating For Economists

We visit a job market created by economists, for economists. It's a hyper-efficient, optimized system, tested by game theorists, tweaked by a Nobel Prize winner, but it requires comfortable shoes.

Incentives in Computer Science--Tim Roughgarden

There was a time when only economists worried about incentives, but as this great looking computer science course by Tim Roughgarden shows, that time is long past...

CS 269I: Incentives in Computer Science

Instructor:

• Tim Roughgarden (Office hours (note new time): Mondays 12:15-1:15 PM, Gates 474. Email: tim@cs.stanford.edu.)

Prerequisites: Mathematical maturity at the level of undergraduate algorithms (CS161). Programming maturity at the level of 106B/X.
Course Description: Many 21st-century computer science applications require the design of software or systems that interact with multiple self-interested participants. This course will provide students with the vocabulary and modeling tools to reason about such design problems. Emphasis will be on understanding basic economic and game theoretic concepts that are relevant across many application domains, and on case studies that demonstrate how to apply these concepts to real-world design problems. Topics include auction and contest design, equilibrium analysis, cryptocurrencies, design of networks and network protocols, matching markets, reputation systems, and social choice. Possible case studies include BGP routing, Bitcoin, eBay's reputation system, Facebook's advertising mechanism, Mechanical Turk, and dynamic pricing in Uber/Lyft.
General references: Twenty Lectures on Algorithmic Game Theory, Cambridge University Press, 2016. See also the Amazon page.

• This textbook is based on the course CS364A. The overlap with 269I will be roughly 20-25%. Though if you enjoy this course, you're likely to also enjoy many of the topics in this book.

The following collection is older and targeted more to researchers than to students, but is still useful for several topics.

• Algorithmic Game Theory, Cambridge University Press, 2007. Read the entire book online by clicking here (look under the "Resources" tab).

We will also draw on the following books for some of the lectures.

• Parkes and Seuken, Economics and Computation (draft), 2016. (Stanford access only.)
• Easley and Kleinberg, Networks, Crowds, and Markets, 2010.

Lecture notes

• Lecture 1 (The Draw/College Admissions) [beta version]
• Lecture 2 (Stable Matching) [beta version]
• Lecture 3 (Strategic Voting) [beta version]
• Lecture 4 (Voting Rules as MLE/Knapsack Voting) [beta version]
• Lecture 5 (Incentives in P2P Networks) [beta version]
• Lecture 6 (Incentivizing Participation) [beta version]
• Lecture 7 (Selfish Routing) [beta version]
• Lecture 8 (Incentives in BGP Routing) [beta version]
• Lecture 9 (Incentives in Bitcoin) [beta version]
• Lecture 10 (Incentives in Crowdsourcing) [beta version]
• Lecture 11 (slides) (Incentives in Societal Networks) [guest lecture by Balaji Prabhakar]
• Lecture 12 (Reputation Systems) [beta version]
• Lecture 13 (Auction Basics) [beta version]
• Lecture 14 (Sponsored Search) [beta version]
• Lecture 15 (VCG Mechanism) [beta version]
• Lecture 16 (Revenue-Optimal Auctions) [beta version]
• Lecture 17 (Incentiving Forecasts and Feedback) [beta version]
• Lecture 18 (Prediction Markets) [beta version]
• Lecture 19 (Time-Inconsistent Planning) [beta version]
• Lecture 20 (Fair Division) [beta version]

Coursework

• Exercise Sets (50%): Exercise sets will be handed out on Wednesdays and will be due one week later. You can work in pairs, if you wish.
  • Here's a LaTeX template that you can use to type up solutions. Here and here are good introductions to LaTeX.
  • Week 1 Exercises
  • Week 2 Exercises
  • Week 3 Exercises
  • Week 4 Exercises
  • No exercises for Week 5!
  • No exercises for Week 6!
  • Week 7 Exercises
  • Week 8 Exercises
  • Week 9 Exercises
• Final Project (50%): For details and some example topics, see here.

Tentative Syllabus (will likely change)

• Week 1: Introduction to incentives through killer examples.
• Week 2: Social choice (voting, Arrow's impossibility theorem, etc.).
• Week 3: Incentives in peer-to-peer and social networks (e.g., incentives in BitTorrent).
• Week 4: Incentives in communication networks (routing, flow control, etc.).
• Week 5: Incentives in cryptocurrencies (like Bitcoin).
• Week 6: Reputation systems. Incentives in crowdsourcing.
• Week 7: Basic auction theory (eBay, sponsored search auctions).
• Week 8: Advanced auction theory and mechanism design (Facebook advertising auctions, contest design).
• Week 9: Scoring rules and prediction markets.
• Week 10: Lessons from behavioral economics (i.e., how do people make decisions, anyway?).

Detailed Lecture Schedule

• Lecture 1 (Mon Sept 26): The incentives of the Draw, past and present. Pareto optimality and strategyproofness. College admissions. One-sided vs. two-sided markets. The National Resident Matching Program (NRMP). Supplementary reading:
  • Check out the changes made to the Draw in 1970, as reported by the Stanford Daily. The other articles make for a fascinating time capsule, as well.
  • The original Gale-Shapley paper (1962). It's very easy to read!
• Lecture 2 (Wed Sept 28): Stable matchings. Properties of the deferred acceptance (Gale-Shapley) mechanism. Could college admissions go through a centralized clearinghouse? Supplementary reading:
  • Biró, Student Admissions in Hungary as Gale and Shapley Envisaged, 2008.
  • Section 2 of Lecture 10 from CS364A (or from the optional textbook).
  • The paper that compares the evolution of different resident-hospital matching algorithms in the U.K. (Roth, 1991).
  • Citation for the 2012 Nobel Prize (Roth and Shapley).
• Lecture 3 (Mon Oct 3): Participatory democracy. Strategic voting. Spoilers and the 2000 US election. Majority, plurality, ranked-choice voting, Borda counts. Gibbard-Satterthwaite and the impossibility of reasonable strategyproof voting rules. Arrow's Impossibility Theorem. Compromises, single-peaked preferences, and the median voting rule. Supplementary reading and resources:
  • Participatory budgeting in general and at Stanford.
  • The rank aggregation problem.
  • Reasonably short proofs of the Gibbard-Satterthwaite and Arrow impossibility theorems are here (see Sections 1.2.3 and 1.2.4).
  • Chapter 23 of the Easley/Kleinberg book (see general references).
• Lecture 4 (Wed Oct 5): Subjective vs. objective interpretations of voting rules. Metaphor: linear regression as the maximum likelihood solution with normally distributed errors. Marquis de Condorcet and majority rule as a maximum likelihood estimator. The Kemeny-Young rule. Knapsack voting and its properties. Supplementary reading and resources:
  • The dramatic life of Marquis de Condorcet.
  • See Pnyx for an implementation of the Kemeny rule.
  • Knapsack voting, by Goel/Krishnaswamy/Sakshuwong (2014).
  • Section 15.2 of the Parkes/Suen book (see general references).
• Lecture 5 (Mon Oct 10): Incentives in peer-to-peer (P2P) networks. History lesson: Napster, Gnutella, etc. Free riding on Gnutella. Prisoner's Dilemma. Repeated Prisoner's Dilemma: the grim trigger and Tit-for-Tat stategies. Tit-for-tat in the BitTorrent reference client. Strategic clients (BitThief and BitTyrant). Supplementary reading:
  • Chapter 5 of the Parkes/Seuken book draft, above.
  • Free Riding on Gnutella (Adar/Huberman, 2000)
  • The Axelrod tournaments: The Evolution of Cooperation (Axelrod/Hamilton, 1981)
  • Incentives Build Robustness in BitTorrent (Cohen, 2003) describes the motivation for the original design.
  • BitThief (Locher/Moor/Schmid/Wattenhofer, 2006)
  • BitTyrant (Piatek/Isdal/Anderson/Krishnamurthy/Venkataramani, 2007)
• Lecture 6 (Wed Oct 12): Coordination games. Technology adoption and network cascades. Individual vs. collective preferences in public good problems. Case study: badge design in Stack Overflow, Coursera, etc. Supplementary reading:
  • See CS 224W for much more on network cascades.
  • Steering User Behavior with Badges (Anderson/Huttenlocher/Kleinberg/Leskovec, 2013)
  • Engaging with Massive Online Courses (same authors, 2014)
• Lecture 7 (Mon Oct 17): Selfish routing and network over-provisioning. Braess's paradox and Pigou's example. The price of anarchy. Modest over-provisioning guarantees near-optimal routing.
  • Demonstration of Braess's paradox.
  • How Bad Is Selfish Routing? (Roughgarden/Tardos, 2000)
  • The Price of Anarchy is Independent of the Network Topology (Roughgarden, 2002)
  • See also Lectures 11 (Sections 1-3) and 12 (Section 1) from CS364A (or from the optional textbook).
• Lecture 8 (Wed Oct 19): The Border Gateway Protocol for Internet routing. Stable routings: non-uniqueness and non-existence. Dispute wheels and the convergence of BGP to a unique solution. Incentive issues. Incentive-compatability with path verification. Supplementary reading:
  • The Stable Paths Problem and Interdomain Routing (Griffin/Shepherd/Wilfong, 2002)
  • Stable Internet Routing Without Global Coordination (Gao/Rexford, 2001)
  • Interdomain Routing and Games (Levin/Schapira/Zohar, 2008)
  • A Survey of Interdomain Routing Policies (Gill/Schapira/Goldberg, 2013)
  • Latest draft of the BGPsec protocol (2016)
• Lecture 9 (Mon Oct 24): Incentives in Bitcoin mining. Transactions and the Bitcoin blockchain protocol. Forks. Incentive issues: the 51% attack, the double-spend attack, and selfish mining. Supplementary reading:
  • General reference: the book Bitcoin and Cryptocurrency Technologies. (Narayanan/Bonneau/Felten/Miller/Goldfeder, 2016)
  • See also Section 22.3 of the Parkes/Suen book (see general references).
  • Majority is not Enough: Bitcoin Mining is Vulnerable (Eyal/Gün Sirer, 2014)
• Lecture 10 (Wed Oct 26): Incentives in crowdsourcing. Bitcoin in a regime with high transaction fees. The DARPA Network Challenge and incentivizing recruitment. Sybil attacks and possible solutions. The "Wisdom of the Crowd": fact or fiction? Herding behavior and information cascades. Supplementary reading:
  • On the Instability of Bitcoin Without the Block Reward (Carlsten/Kalodner/Weinberg/Narayanan, 2016)
  • Time-Critical Social Mobilization (Pickard et al., 2011) describes the MIT group's winning strategy in the DARPA Network Challenge.
  • Less happy times in the 2011 DARPA Shredder Challenge.
  • On Bitcoin and Red Balloons (Babaioff/Dobzinski/Oren/Zohar, 2012)
  • Chapter 16 of the Easley/Kleinberg book (see general references).
• Lecture 11 (Mon Oct 31): Incentives in societal networks (guest lecture by Balaji Prabhakar). "Nudges" for changing behavior. Case studies in Bangalore, Singapore, and at Stanford.
  • Balaji's slides
  • An Incentive Mechanism for Decongesting the Roads: A Pilot Program in Bangalore (Merugu/Prabhakar/Rama, 2009)
  • INSINC: A Platform for Managing Peak Demand in Public Transit (Pluntke/Prabhakar, 2013)
• Lecture 12 (Wed Nov 2): Adverse selection, moral hazard, and reputation systems. The market for lemons. Analogs in health insurance, the labor market, and online platforms. Moral hazard. Reputational effects in the n-person Prisoner's Dilemma. Whitewashing and the pay-your-dues strategy. Sybil attacks. Case study: the evolution of eBay's reputation system. Supplementary reading:
  • Chapter 27 of the AGT book (see general references).
  • Chapter 20 of the Parkes/Suen book (see general references).
  • Sections 22.5-22.9 of the Easley/Kleinberg book (see general references).
  • The Social Cost of Cheap Pseudonyms (Friedman/Resnick, 2001)
  • The evolution of the eBay reputation system: The Limits of Reputation in Platform Markets: An Empirical Analysis and Field Experiment(Nosko/Tadelis, 2015)
• Lecture 13 (Mon Nov 7): Auction design basics. How would you bid in a first-price auction? The Vickrey auction and truthfulness. Welfare maximization. Introduction to sponsored search auctions.
  • This lecture is based on Lecture 2 from CS364A (or from the optional textbook).
  • Optional: The Economics of Internet Search (Varian, 2006)
• Lecture 14 (Wed Nov 9): The theory of first-price auctions. Externalities. VCG: a truthful sponsored search auction. GSP vs. VCG. Supplementary reading:
  • See Section 2.3 of Hartline's book for more about the Bayes-Nash equilibria of first-price auctions.
  • Sponsored search: see AGT book, Sections 28.1-28.3.1 (see general references).
  • Internet Advertising and the Generalized Second Price Auction: Selling Billions of Dollars Worth of Keywords (Edelman/Ostrovsky/Schwarz, 2007)
  • Position Auctions, (Varian, 2007)
  • See also this CS364B course for tons of subtopics and references on sponsored search auctions (circa late 2007).
• Lecture 15 (Mon Nov 14): Revenue equivalence of the GSP and VCG sponsored search auctions. VCG in AdSense and Facebook. The general VCG mechanism and its truthfulness. Practical issues with VCG. Supplementary materials:
  • The VCG Auction in Theory and Practice (Varian/Harris, 2014)
  • On How Machine Learning and Auction Theory Power Facebook Advertising, talk by Eric Sodomka (2015).
• Lecture 16 (Wed Nov 16): Revenue maximization. Bayesian optimal auctions. Monopoly prices. Optimality of Vickrey with a monopoly price reserve. Case study: reserve prices in Yahoo! keyword auctions. Prior-independent auctions and the Bulow-Klemperer theorem. Further reading:
  • For more details and proofs, see Lectures 5 and 6 from CS364A (or the optional textbook).
  • Ostrovsky/Schwarz, Reserve Prices in Internet Advertising Auctions: A Field Experiment, 2009.
• Lecture 17 (Mon Nov 28): Strictly proper scoring rules. Incentivizing honest opinions. Output agreement. Peer prediction. Further reading:
  • Section 27.4 of the AGT book (see general references).
  • Chapter 17 of the Parkes/Suen book (see general references).
• Lecture 18 (Wed Nov 30): Prediction markets. The Iowa Electronic Markets and continuous double auctions. The Policy Analysis Market and the Wisdom of Crowds. Market scoring rules and automated market-makers. Further reading:
  • Chapter 26 of the AGT book (see general references).
  • Chapter 18 of the Parkes/Suen book (see general references).
  • The Policy Analysis Market: A Thwarted Experiment in the Use of Prediction Markets for Public Policy (Hanson, 2007)
• Lecture 19 (Mon Dec 5): Behavioral economics. Time-inconsistent planning: procrastination, choice reduction, and undue obedience. Upper and lower bounds on cost ratios. Naive vs. sophisticated agents. Further reading:
  • Procrastination and Obedience (Akerlof, 1991)
  • Time-Inconsistent Planning (Kleinberg/Oren, 2014)
  • For tighter bounds, see Computational Issues in Time-Inconsistent Planning (Tang/Teng/Wang/Xiao/Xu, 2015)
  • Planning Problems for Sophisticated Agents with Present Bias (Kleinberg/Oren/Raghavan, 2016)
• Lecture 20 (Wed Dec 7): Fair division. The cut and choose protocol and envy-freeness. The Selfridge-Conway envy-free protocol for 3 players. Recent advances for 4 or more players. The rent division problem, and the maxmin envy-free solution. Further reading:
  • Quanta article about recent advances in envy-free cake-cutting (Klarreich, 2016)
  • A Discrete and Bounded Envy-free Cake Cutting Protocol for Any Number of Agents (Aziz/Mackenzie, 2016)
  • Which Is the Fairest (Rent Division) of Them All?, (Gal/Mash/Procaccia/Zick, 2016)
  • Fair division in practice: spliddit

U.S. academic conferences and the travel ban. What would be the effect of a boycott? Can conferences usefully be moved?

Part of the international reaction to the recent U.S. travel ban on people from seven countries has been a call to boycott U.S. academic conferences.
Here, e.g. is one such call: In Solidarity with People Affected by the ‘Muslim Ban’: Call for an Academic Boycott of International Conferences held in the US
"Among those affected by the Order are academics and students who are unable to participate in conferences and the free communication of ideas. We the undersigned take action in solidarity with those affected by Trump’s Executive Order by pledging not to attend international conferences in the US while the ban persists. We question the intellectual integrity of these spaces and the dialogues they are designed to encourage while Muslim colleagues are explicitly excluded from them."

I have had an opportunity to think about this regarding the ASSA conference run in January by the American Economic Association, and it seems to me that such a boycott won't help the majority of academics (students and professors) from the banned countries who come to our conference, or to many American academic conferences.

In our (the AEA's) particular situation, my sense is that we have had few if any Yemeni and Sudanese economists participating in the AEA meetings, and the people potentially affected by the current U.S. entry bans are mostly Iranian.*  And the majority of Iranians who have participated seem to be working or studying in the U.S.

So…if a travel ban is in place next January, and we moved the conference to some civilized city like Toronto, we would be depriving most of the potential Iranian participants of the ability to attend, since they couldn’t leave and then reliably re-enter the U.S..

My current sense is that the AEA will decide to take care of the Iranians as best we can (which for the minority who aren’t in the U.S. may involve some electronic communication efforts), rather than cater to any economists whose scruples would require us to abandon the Iranians living and working in the U.S.  by moving the conference elsewhere.

To be clear, I think moving the AEA meetings outside of the U.S. would harm the majority of Iranians who participated in past years.

Of course I’m hopeful that we’ll have come to our senses long before then.


*see this article in the Chronicle for a wider view of who studies in the U.S.:
Why the Travel Ban Probably Hits Iranian Professors and Students the Hardest

see also the data compiled by the Institute of International Education:
 International Students: All Places of Origin 2014/15 - 2015/16, and for previous years:  2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002
Selected Years 1950-2000
and see
Universities Spoke Up in Case That Led to Ruling Halting Trump’s Travel Ban