What preferences are revealed by market designs? by Oğuzhan Çelebi (who is on the job market)

Oğuzhan Çelebi is on the job market this year (listed on the job market websites of both MIT and Stanford where he's finishing a two year postdoc). He has a new paper that takes a really novel approach to market design.  It looks at the implicit preference relation (if one exists) that a mechanism reveals when a revealed preference analysis is done of the choices it makes from different possible menus of alternatives. The specific focus is on preferences for diversity revealed by mechanisms used in connection with affirmative action.

Diversity Preferences and Affirmative Action, by Oğuzhan Çelebi 

Abstract: "In various contexts, institutions allocate resources using rules that determine selections given the set of candidates. Many of these rules feature affirmative action, accounting for both identity and (match) quality of individuals. This paper studies the relationship between these rules and the preferences underlying them. I map the standard setting of market design to the revealed preference framework, interpreting choice rules as observed choices made across different situations. I provide a condition that characterizes when a rule can be rationalized by preferences based on identities and qualities. I apply tests based on this condition to evaluate real-world mechanisms, including India’s main affirmative action policy for allocating government jobs, and find that it cannot be rationalized. When identities are multidimensional, I show that non-intersectional views of diversity can be exploited by dominant groups to increase their representation and cause the choice rules to violate the substitutes condition, a key requirement for the use of stable matching mechanisms. I also characterize rules that can be rationalized by preferences separable in diversity and quality, demonstrating that they lead to a unique selection within the broader set of policies that reserve places based on individuals’ identities."

########

He's a target of opportunity for any department interested in market design.

Mohammad Akbarpour, interviewed by Scott Cunningham

Here's an interview of Mohammad Akbarpour, as part of Scott Cunningham's growing series of interviews of interesting economists. (Even the picture of the two of them looks interesting, and it gets better:)

   

Scott writes:

"Welcome to the Mixtape with Scott! Sometimes the shortest distance between point A and point B is a straight line, but other times the shortest distance is a winding path. This week’s guest, Mohammad Akbarpour from Stanford University, is perhaps an example of the latter. Mohammad is a micro theorist at Stanford who specializes in networks, mechanism and design and two sided matching. Mohammad is an emerging young theorist at Stanford, student of such luminaries as Matt Jackson and Al Roth, whose background in engineering, mathematics and computer science has given him a fresh approach to topics that I associate with Stanford’s theory people as a whole — policy oriented, applied work, mechanism design, networks and matching. He got into economics “the long way” — growing up in Iran, majoring in engineering, and then moving into Stanford’s operations research PhD program. In this interview, he generously shares a snippet of the arc of his life, and it’s a remarkable story, and one I really enjoyed hearing. I think you will too."

Yale celebrates Vahideh Manshadi

Vahideh Manshadi is the Michael Jordan of Operations.

 Here's the announcement from Yale News:

Vahideh Manshadi appointed the Michael H. Jordan Professor of Operations. Manshadi investigates the operations of online and matching platforms, and studies algorithmic fairness.

"Vahideh Manshadi, who investigates the operations of online and matching platforms, and studies algorithmic fairness and inclusion has been named the Michael H. Jordan Professor of Operations, effective immediately.

...

"She has pioneered the study of emerging systems and platforms with societal impact, including crowdsourced food recovery, volunteer crowdsourcing, refugee resettlement, and organ allocation. She has collaborated with nationwide platform-based nonprofits, including Feeding America, Food Rescue US, VolunteerMatch, and national kidney exchange programs, and often impacted the practice of these organizations.

...

"She received her Ph.D. in electrical engineering at Stanford University, where she also received M.S. degrees in statistics and electrical engineering. Before joining Yale, she was a postdoctoral scholar at the MIT Operations Research Center."

Stanford celebrates Susan Athey

 This  from Stanford Report:

What motivates Susan Athey. The economist weighs in on incremental innovation, data-driven impact, and how economics is evolving to include a healthy dose of engineering. 

"Today, Athey, the Economics of Technology Professor at Stanford GSB, is using her expertise to promote the public good. In 2019, she founded the Golub Capital Social Impact Lab, which uses digital technology and social science research to improve the effectiveness of social sector organizations.

...

"For more than a decade, Athey’s professional passions have been linked to their potential for impact. She chose to return to Stanford — after six years teaching at Harvard — because of the opportunity for cross-disciplinary collaboration. And she has helped make such collaboration possible. In 2019, she was a founding associate director of the Stanford University Human-Centered Artificial Intelligence Institute. She is also a leader of the Business and Beneficial Technology pillar within Stanford GSB’s newly launched Business, Government, & Society Initiative, which brings together academics, practitioners, and policymakers to address issues such as technology, free markets, and sustainability.

"Athey’s Golub Capital Social Impact Lab epitomizes interdisciplinary work, putting students from computer science, engineering, education, and economics backgrounds to work helping partner organizations leverage digital tools and expertise that are generally only available to — or affordable for — large technology companies.

“I like building things that demonstrate how a class of problems can be solved,” Athey says. “If there is a problem worth solving, and I can solve it myself in a particular case, I know there are other people like me who are going to encounter the same problem. Part of the motivation and theory of change of the lab is that we will solve particular problems for particular social-impact organizations but also create the research that will guide others in solving similar problems.”

...

"Athey says some parts of economics are evolving to include a healthy dose of engineering. In the Microsoft Research interview, she described stereotypical economics research as evaluating existing programs and often finding that “stuff doesn’t work.”

“There’s a lot of negativity,” she says. With help from data and machine learning techniques, “my prediction is that economists are going to become more [like] engineers. Instead of complaining that nothing works, we’re going to start building things that do work to achieve economic outcomes…. We’re going to realize that nothing works if it’s one size fits all, but that a lot of things work if they are actually personalized and appropriately delivered.”

YingHua He 何 英华 has died.

 Yan Chen passes on the devastating news that YingHua He 何 英华 passed away on Tuesday night, after struggling with kidney cancer.

May his memory be a blessing.

He graduated from college in China in 2001, got an MA at Peking University, received his Ph.D. at Columbia in 2011, taught in Toulouse, and was an associate professor at Rice University when he died.

Here's his CV, and here is his Google Scholar page.  He did important work on market design, including on school choice and kidney exchange.

He was one of the pioneers of empirical market design, combining econometrics with matching theory. 

He had many friends, and I was lucky to be among them. Here's a photo I took of him giving a seminar at Stanford, when he was a visiting scholar in 2014-15

Yinghua He at Stanford, January 2015

Here are some of my blog posts on his work:

Tuesday, January 25, 2022

Multiple offer mechanisms in school choice, when information gathering is costly

Sunday, November 6, 2022

Limiting congestion by limiting applications, or making them costly

Sunday, September 13, 2020

A proposal for non-simultaneous kidney exchange in pairs and chains and with deceased donors...

Friday, May 24, 2019

Matching early when information is costly, by Grenet, He, and Kübler

Photos from the daily market design activity at Stanford

Two photos remind me of the day to day market design activity at Stanford. 

Tinglong Dai joined our Wednesday market design coffee and sent along this picture. (You can see who came by plane and who came by bike...)  He wrote about his visit here.

And Matias Cersosimo successfully defended his dissertation on Friday, which  included market design experiments like this one.

 Welcome to the club, Matias.

Affirmative action in Brazilian universities: guest post by Inácio Bó

 Recent legislation in Brazil addresses university admissions with affirmative action that targets multiple characteristics that individuals may have (in different combinations), namely income, ethnicity, and the type of institution at which they studied. Early attempts to implement such a system produced undesirable outcomes, but recent legislation, informed by market design, is on the path to correcting this. Below, Inácio Bó brings us up to date:

Guest blog post by Inácio Bó

For many decades, Brazilian’s federal universities were—and still are— the top higher education institutions in the country. They had, however, a contradictory combination of circumstances: all of them were public-funded and tuition-free, but their students were overwhelmingly from a minority white higher socio-economic class. In response to that, in 2012 congress passed legislation mandating affirmative action in the access of all such institutions.

Orhan Aygün and I were at that time classmates pursuing our PhD in economics at Boston College. We spent days and weeks looking at the details of the structure of the rules for implementing the law, trying to better understand it. While working on some examples, we noticed that there could in principle be situations that were at odds with the intended objective of the law. Under some circumstances, black and low-income candidates would be rejected from positions where white and high-income candidates would be accepted, despite the former having higher entry-level exam grades than the latter. This  would be an outcome that goes in the opposite direction from the intended objective of helping black and low-income students attend these institutions.

The reason for this problem lies on the method used for implement the affirmative action law in the universities. Seats in each program in each university were split into groups of seats, including “open seats”, “black candidates”, “low-income candidates”, and “black and low-income candidates”. When applying for a program, a candidate would choose one of the alternatives for which she is eligible. The top candidates among those applying for each set of seats, ranked by their grade in a national exam, would be accepted. This method might, however, result in different levels of competition for different seats in the same program, resulting for example in tougher requirements for acceptance for “black and low-income” candidates than for “black” candidates, even if on average low-income candidates have lower grades overall.

In a paper published in the AEJ:Micro in 2021 (Aygün, Orhan, and Inácio Bó. 2021. "College Admission with Multidimensional Privileges: The Brazilian Affirmative Action Case." American Economic Journal: Microeconomics, 13 (3): 1-28.), we showed how this problem can be solved while still satisfying the text and spirit of the affirmative action law in Brazil with small changes in the way by which candidates are selected. (The idea is to order slot-specific priorities so that candidates with protected characteristics can compete for all of those slots for which their characteristics qualify them.) The paper also shows “smoking gun” evidence that these “unfair rejections” were taking place, showing that programs where the cutoff grades for acceptance for each subset of seats were compatible with these rejections constituted almost half of the programs offered across the nation.

While the article gained praise in the academic economic community, our hopes that it would reach the policymakers in Brazil were initially dashed. Despite having the chance of personally visiting the Ministry of Education in 2015 for two weeks, my attempts to talk with those in power were unsuccessful, and people to whom I explained some of our findings deemed its contents “critical of the government”.

 Especially in light of the political developments that took place in Brazil in the years that followed, I had mostly moved on from my hopes of seeing the changes we proposed being implemented.

Things started to change, however, around May of 2022. The staff from the office of representative Tábata Amaral, who is a prominent young politician with a focus on education, were having talks with Ursula Mello, now a professor at the Department of Economics at PUC-Rio in Rio de Janeiro, about some aspects of the affirmative action law related to her work. Given her knowledge about the AEJ:Micro paper, Ursula suggested that I join the discussions. A meeting where this happened even ended up in the press (https://www1.folha.uol.com.br/educacao/2022/05/pesquisadores-defendem-novo-algoritmo-no-sisu-para-nao-prejudicar-cotistas.shtml).

Adriano Senkevics, her co-author in related papers who works at the INEP—an agency connected to the Brazilian Ministry of Education in charge of evaluating educational systems—also joined.

In these discussions, it became clear that if we wanted our ideas to have any chance of gaining traction, we needed to write a policy-oriented paper, focused on the current Brazilian specifics, in Portuguese, and with policy-makers as the audience—not academics.

Adriano and I worked together in that project, now with a much more detailed dataset. We tailored the proposal to the updated law, which also included reservations for candidates with disabilities, and were finally able to quantify the negative impact of the failures we identified. Our estimates indicate that, in the selection process of 2019, at least ten thousand students were “unfairly rejected” from their applications, with more than 8 thousand being left unmatched to any university despite having an exam grade high enough to be accepted for less restrictive reserved seats. These numbers greatly exceeded our expectations, and made a clear political case for a change. The working paper went out in January of 2023 (“Proposal to change the rules for the occupation of quotas in the student entrance to federal institutions of higher education,” by Inácio Bó and Adriano Souza Senkevics).

While the theoretical arguments were already in the AEJ:Micro paper, the proposal had a greater and faster impact in the corridors of the Brazilian capital. Articles in the main newspapers in the country reported on the findings and the proposal (https://oglobo.globo.com/brasil/educacao/enem-e-vestibular/noticia/2023/03/quase-650-candidatos-para-uma-vaga-maiores-concorrencia-do-sisu-estao-entre-os-alunos-cotistas.ghtml

, https://oglobo.globo.com/brasil/antonio-gois/coluna/2023/02/reformar-o-sisu.ghtml

, https://www1.folha.uol.com.br/colunas/rodrigo-zeidan/2023/04/desenhando-mercados.shtml )

People were openly sharing the article on twitter with members of the ministry of education

(https://twitter.com/thiamparo/status/1621189953785839617?s=20 ,

https://twitter.com/mgaldino/status/1621008428763332612?s=20 ). We could feel the momentum.

In the months that followed, I started having regular interactions with members of the Ministry of Education. The text and zoom discussions involved technical and political aspects of changes in the law, which extended beyond the specific changes we suggested.

Different variations of the changes and some alternative proposals were considered. I had to run simulations while flying to deliver them before a meeting that the secretary had with the minister. I also had the incredible experience of joining a meeting at the “Casa Civil”—a department somewhat comparable to the prime minister in a parliamentary system—with the presence of secretaries from multiple ministries , where I presented our proposal and discussed some details and scenarios. Around that time, and without our knowledge, a senator presented a bill explicitly based on our proposal (https://www25.senado.leg.br/web/atividade/materias/-/materia/156995 ).

By the end of June, our belief that the changes would be implemented became stronger. Since our proposal was (by design) already compatible with the quotas law, its implementation could be done even in the absence of new legislation, and there was clear interest on the part of those in charge for making it happen.

A momentous event in this journey, however, took place on August 9th.

Because of a series of political circumstances, an urge to pass a renewed law for the affirmative action led to a bill proposed by Representative Dandara—the first member of congress who herself benefitted from the quotas law—to be brought to the floor for a vote.

Among other changes, it made the affirmative action policy permanent, changed the order in which seats are filled, and included text that should, in the following secondary legislation, include text that describes our proposal. As if emotions were not high enough, we had urgent calls to send the text of our proposal to members in the floor of congress minutes before the vote took place. And this resulted in the photo below, showing Dandara giving a speech before the vote, with a page from our paper in her hand.

The journey is not yet over. The bill must still pass the senate, and the legislation with the implementation details will follow. But I learned that these changes are made of so many steps that one has to choose one as the turning point. We believe that this is a good one.

The INEP (National Institute of Educational Studies and Research) thinks so too: (https://www.gov.br/inep/pt-br/assuntos/noticias/linha-editorial/inep-contribui-com-atualizacao-da-lei-de-cotas)

Liver exchange in Turkey

Here's a forthcoming article in the AJT, reporting on a collaboration between physicians and market designers with experience in kidney exchange:

The First 4-Way Liver Paired Exchange from an Interdisciplinary Collaboration between Healthcare Professionals and Design Economists by Sezai Yilmaz, MD, FACS  Tayfun Sönmez, PhD  M. Utku Ünver, PhD  Volkan Ince, MD  Sami Akbulut, MD, FACS  Burak Isik, MD  Sukru Emre, MD  American Journal of Transplantation, BRIEF COMMUNICATION|ARTICLES IN PRESS, Open Access Published: July 05, 2023 DOI:https://doi.org/10.1016/j.ajt.2023.06.016 

Abstract: We report initial results of a Liver Paired Exchange (LPE) program established at the Liver Transplant Institute at Inonu University through collaboration with design economists. Since June 2022, the program has been using a matching procedure that maximizes the number of living donor liver transplants (LDLTs) to the patients in the pool subject to the ethical framework and the logistical constraints of the program. In one 4-way and four 2-way exchanges, twelve LDLTs have been performed via LPE in 2022. The 4-way exchange, generated in the same match run with a 2-way exchange, is a first worldwide. This match run generated LDLTs for six patients, revealing the value of the capacity to carry out larger than 2-way exchanges. With only 2-way exchanges, only four of these patients would receive LDLT. The number of LDLTs from LPE can be increased by developing the capacity to perform larger than 2-way exchanges in either high-volume centers or multi-center programs.

 

Judd Kessler on Market Rules

 Judd Kessler is writing a book (that I'm looking forward to reading):

Three way liver exchange in Pakistan, reported in JAMA Surgery by Salman, Arsalan, and Dar, in collaboration with economist Alex Chan

 Here's an exciting account, just published in JAMA Surgery, of a three way liver exchange in Pakistan, achieved in part by collaboration with economist and market designer Alex Chan (who is on the job market this year).

Launching Liver Exchange and the First 3-Way Liver Paired Donation by Saad Salman, MD, MPH1; Muhammad Arsalan, MBBS2; Faisal Saud Dar, MBBS2, JAMA Surg. Published online December 7, 2022. doi:10.1001/jamasurg.2022.5440 (pdf)

Here are the first paragraphs:

"There is a shortage of transplantable organs almost everywhere in the world. In the US, about 6000 transplant candidates die waiting each year.1 In Pakistan, 30% to 50% of patients who needed a liver transplant are unable to secure a compatible donor, and about 10 000 people die each year waiting for a liver.2 Kidney paired donations, supported by Nobel Prize–winning kidney exchange (KE) algorithms,3 have enabled living donor kidneys to become an important source of kidneys. Exchanges supported by algorithms that systematically identify the optimal set of paired donations has yet to take hold for liver transplant.

"The innovation reported here is the successful implementation of a liver exchange mechanism4 that also led to 3 liver allotransplants and 3 hepatectomies between 3 incompatible patient-donor pairs with living donor–patient ABO/size incompatibilities. These were facilitated by one of the world’s first documented 3-way liver paired donations (LPD) between patient-donor pairs.

"Since 2018 and 2019, we have explored LPD as a strategy to overcome barriers for liver failure patients in Pakistan in collaboration with economist Alex Chan, MPH.2 With LPD, the incompatibility issues with relative donors can be solved by exchanging donors. The Pakistan Kidney and Liver Institute (PKLI) adopted a liver exchange algorithm developed by Chan4 to evaluate LPD opportunities that prioritizes clinical urgency (Model for End-stage Liver Disease [MELD] scores) while maximizing transplant-enabling 2-way or 3-way swaps that ensures that hepatectomies for every donor within each swap has comparable ex ante risk (to ensure fairness). As of March 2022, 20 PKLI liver transplant candidates had actively coregistered living and related but incompatible liver donors. Evaluating these 20 incompatible patient-donor pairs with the algorithm,4 we found 7 potential transplants by two 2-way swaps and the 3-way swap reported. In contrast to ad hoc manual identification of organ exchange opportunities, the hallmark of a scalable organ exchange program is the regular deployment of algorithms to systematically identify possible exchanges. Regular deployment of LPD algorithms is novel.

"A total of 6 procedures took place on March 17, 2022. Patient 1, a 57-year-old man, received a right liver lobe from donor 2, a 28-year-old coregistered donor of patient 2 (56-year-old man), who in turn received a right liver lobe from donor 3, a 35-year-old woman who was a coregistered donor of patient 3. Patient 3, a 46-year-old man, received a right liver lobe from donor 1, a 22-year-old woman who was a coregistered donor of patient 1, completing the cycle (Figure). Five PKLI consultant surgeons and 7 senior registrars led the hepatectomies and liver allotransplants; 6 operating rooms were used simultaneously. One month postsurgery, all patients and donors are robust with no graft rejection. All the donors are doing well in the follow-up visits and have shown no psychological issues."

Here's a sentence in the acknowledgements:

"We thank Alex Chan, MPH (Stanford University, Palo Alto, California), whose initiative and expertise in economics were the key driving forces for launching liver exchange."

*********

NB: this is a "Surgical Innovation" article, for which the journal requires that there be no more than three authors.

And here are the references cited:

1.

Chan  A, Roth  AE. Regulation of organ transplantation and procurement: a market design lab experiment. Accessed April 28, 2022. https://www.alexchan.net/_files/ugd/a47645_99b1d4843f2f42beb95b94e43547083b.pdf

2.

Salman  S, Gurev  S, Arsalan  M, Dar  F, Chan  A. Liver exchange: a pathway to increase access to transplantation. Accessed April 1, 2022. http://www.hhpronline.org/articles/2021/1/14/liver-exchange-a-pathway-to-increase-access-to-transplantation

3.

Henderson  D. On marriage, kidneys and the Economics Nobel. Wall Street Journal. October 15, 2012. Accessed March 5, 2022. https://www.wsj.com/articles/SB10000872396390443675404578058773182478536

4.

Chan  A. Optimal liver exchange with equipoise. Accessed April 23, 2022. https://www.alexchan.net/_files/ugd/a47645_36e252f4df0c4707b6431b0559b03143.pdf

5.

Hwang  S, Lee  SG, Moon  DB,  et al.  Exchange living donor liver transplantation to overcome ABO incompatibility in adult patients.   Liver Transpl. 2010;16(4):482-490. doi:10.1002/lt.22017PubMedGoogle ScholarCrossref

6.

Patel  MS, Mohamed  Z, Ghanekar  A,  et al.  Living donor liver paired exchange: a North American first.   Am J Transplant. 2021;21(1):400-404. doi:10.1111/ajt.16137PubMedGoogle ScholarCrossref

7.

Braun  HJ, Torres  AM, Louie  F,  et al.  Expanding living donor liver transplantation: report of first US living donor liver transplant chain.   Am J Transplant. 2021;21(4):1633-1636. doi:10.1111/ajt.16396

 ********

Here's a Stanford story on this collaboration:

Stanford student devises liver exchange, easing shortage of organs. A rare three-way exchange of liver transplants in Pakistan was made possible with a new algorithm developed by a Stanford Medicine student.  by Nina Bai

"The liver exchange idea actually came out of a term paper in a first-year market design class at Stanford," Chan said.

"As he learned more about liver transplants, Chan realized there were important biological and ethical differences from kidney transplants. 

...

"Instead of just finding compatible swaps, we want to find swaps that prioitize the most urgent patients first in order to prevent the most deaths," Chan said.

*******

Here are some contemporaneous stories from March in the newspaper Dawn (now that the JAMA embargo on the story is lifted):

Liver transplants at PKLI under 'swap' plan - Newspaper - Dawn

Mar 18, 2022 — A highly-trained team of the surgeons headed by PKLI Dean Prof Faisal Dar had performed liver transplants at the institute and other members ...

• First swap liver transplant surgeries at PKLI today - Dawn

  
  

  Mar 17, 2022 — An official told Dawn on Wednesday the treating doctors had recommended liver transplant of all the three patients due to their end-stage ...

Iowa State University celebrates Bertan Turhan

 The Iowa State University News Service has an article about the market design work of Bertan Turhan.

New model could improve matches between students and schools

"For the majority of students in the U.S., residential addresses determine which public elementary, middle, or high school they attend. But with an influx of charter schools and state-funded voucher programs for private schools, as well as a growing number of cities that let students apply to public schools across the district (regardless of zip code), the admissions process can turn into a messy game of matchmaking.

"Simultaneous applications for competitive spots and a lack of coordination among school authorities often result in some students being matched with multiple schools while others are unassigned. It can lead to unfilled seats at the start of the semester and extra stress for students and parents, as well as teachers and administrators.

"Assistant Professor of Economics Bertan Turhan at Iowa State University and his co-authors outline a way to make better, more efficient matches between students and schools in their new study published in Games and Economic Behavior. Turhan says their goal was to create a fairer process that works within realistic parameters.

“There are a lot of success stories in major U.S. cities where economists and policymakers worked together to improve school choice,” said Turhan. “The algorithm we introduced builds on that and could give school groups some degree of coordination and significantly increase overall student welfare in situations where there’s a lot of competition to get into certain schools.” 

...

"Over the next year, Turhan and his team will be studying the implementation of their model in India where two types of colleges have revamped their admissions process."

********

Here's the paper that was the occasion of the story:

Parallel markets in school choice by Mustafa Oğuz Afacan, Piotr Evdokimov, Rustamdjan Hakimov, and Bertan Turhan

Games and Economic Behavior, Volume 133, May 2022, Pages 181-201, https://doi.org/10.1016/j.geb.2022.03.003Get rights and content

Abstract: When applying to schools, students often submit applications to distinct school systems that operate independently, which leads to waste and distortions of stability due to miscoordination. To alleviate this issue, Manjunath and Turhan (2016) introduce the Iterative Deferred Acceptance mechanism (IDA). We design an experiment to compare the performance of this mechanism under parallel markets (DecDA2) to the classic Deferred Acceptance mechanism with both divided (DecDA) and unified markets (DA). Consistent with the theory, we find that both stability and efficiency are highest under DA, intermediate under DecDA2, and lowest under DecDA. While IDA is not strategy-proof, we show theoretically that strategic reporting can only lead to improved efficiency for all market participants. The experimental results are consistent with this prediction. Our findings cast doubt on whether strategy-proofness should be perceived as a universal constraint to market mechanisms.

Happy birthday to Bob Wilson

  Happy birthday Bob!

Scott Kominers on entrepreneurial market design (podcast)

 Scott Kominers is interviewed on the Things to Know podcast, about the arc of his career, and how it led him to market design, and crypto, NFTs, and beyond.

"Market design is a sort of wrapper around economics..."

 

Rising Stars in Market Design, featuring Alex Chan, Aram Grigoryan and Dong Woo Hahm, at the Tokyo Market Design center

 The University of Tokyo Market Design center hosts Rising Stars in Market Design

Alex Chan, Aram Grigoryan, Dong Woo Hahm

Stanford celebrates Irene Lo

 Stanford's School of Engineering celebrates Irene Lo, in an interview and video:

"Engineer Irene Lo studies markets, but not traditional marketplaces based in cash.

Instead, she studies markets for goods/resources that place a high value on social goods like diversity, fairness and equity.

Thus, Lo came to help San Francisco create an algorithm to assign kids more fairly to public schools across geographic, social, racial and economic boundaries. As it turns out, math is just the first step. The most challenging part was getting families to trust in the system, begetting a multi-year community engagement effort.

Lo is now turning her attention to other markets with social impact, like her work on the system that places medical students in residency programs across the country or one trying to make the palm oil supply chain fairer for farmers.

Listen in as Irene Lo explains the changing face of markets to host Russ Altman in this episode of Stanford Engineering’s The Future of Everythingpodcast. Listen and subscribe here."

Kim Krawiec to UVA

 Controversial markets are coming to Virginia:

Here's the announcement from the U. of Virginia:

Kimberly Krawiec, Expert in Controversial Markets, To Join Faculty

"Kimberly D. Krawiec, a leading expert in market regulation, will join the University of Virginia School of Law faculty in the fall.

...

“Kim is a major contemporary voice on misconduct and trade within forbidden or contested markets,” Dean Risa Goluboff said in welcoming Krawiec to the faculty.

...

"Krawiec, who visited at UVA Law in 2004, has taught both large lecture classes and smaller ones, including her recent favorites Taboo Trades and Forbidden Markets, and Advanced Contracts. “Taboo Trades” is also the name of the podcast she launched in August, which so far has covered topics ranging from marijuana legalization to blood and other “repugnant transactions.”

Economics and Engineering (and market design): some history and prehistory, at Stanford and elsewhere

The  December 2020 issue of History of Political Economy is devoted to Economics and Engineering.

Here's an account of Stanford and Bob Wilson (among others), written before the most recent Nobel prize to Wilson and Milgrom.

A Century of Economics and Engineering at Stanford by Beatrice Cherrier and Aurélien Saïdi

History of Political Economy (2020) 52 (S1): 85–111.  https://doi.org/10.1215/00182702-8717936

"This article documents the disciplinary exchanges between economists and engineers at Stanford throughout the twentieth century. We outline the role of key scholars such as Kenneth Arrow and Robert Wilson, as well as engineers turned administrators like Frederick Terman. We show that engineers drew upon economic theories of decision and allocation to improve practical industrial management decisions. Reciprocally, economists found in engineering the tools that they needed to rethink production and growth theory (including linear programming, optimal control theory, an epistemology of “application” that emphasized awareness to institutional details, trials and errors and experiments). By the 2000s, they had turned into economic engineers designing markets and other allocation mechanisms. These cross-disciplinary exchanges were mediated by Stanford’s own institutional culture, notably its use of joint appointments, the development of multidisciplinary “programs” for students, the ability to attract a variety of visitors every year, the entrepreneurial and contract-oriented vision of its administrators, and the close ties with the industrial milieu that came to be called the Silicon Valley.

..

"This article should not be read as a history of economics, engineering, or management science at Stanford and their idiosyncrasies.4  None of the research programs or institutional arrangements we describe were unique to Stanford. Rather, we document how some of the engineering and economics theories, tools, and epistemologies developed elsewhere were recombined in a specific institutional setting and entrepreneurial culture, and thus came to infuse the vision that some Stanford economists developed and spread in the last decades."

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

The pdf to the full article appears to be ungated, and will be especially rewarding to old Stanford hands, who will recognize a lot of names from Operations Research as well as from Econ.

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

And here's the introduction to the whole December special issue, by its editors:

Introduction: From “Economics as Engineering” to “Economics and Engineering”  by Pedro Garcia Duarte and Yann Giraud

History of Political Economy (2020) 52 (S1): 10–27.  https://doi.org/10.1215/00182702-8717898

"Economists such as Alvin Roth and Esther Duflo have recently argued that economics in the late twentieth century has evolved from (social) science to engineering. On the other hand, historians such as Mary Morgan and Michel Armatte have argued that the transformation of economics into an engineering science has been a century-long development. Turning away from the “economics as engineering” analogy, our introduction suggests an alternative approach to account for the presumed transformation of economics into an engineering science. We encourage the development of a history of “economics and engineering,” which depicts how these two types of knowledge–and the communities who produce them–have interacted in various institutional and national contexts. Drawing on the contributions to this 2020 annual supplement of HOPE, we show how these narratives may help change the historiography of twentieth-century economics."

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As it happens, I had the privilege of discussing some of these papers  in Atlanta in  2019 at the ASSA meetings, in a session sponsored by  the History of Economics Society, and chaired by Pedro Garcia Duarte.

Another paper from that session that appears in this issue of HOPE is 

Engineering the “Statistical Control of Business”: Malcolm Rorty, Telephone Engineering, and American Economics, 1900–1930  by Thomas A. Stapleford

History of Political Economy (2020) 52 (S1): 59–84.  https://doi.org/10.1215/00182702-8717924

"Malcolm Rorty is best known to historians of economics as the primary organizer and founder of the National Bureau of Economic Research. This article situates Rorty’s interest in economics against the backdrop of his early career in telephone engineering at American Telephone & Telegraph. I argue that distinct structural features of telephone engineering in general, and AT&T in particular, created overlaps between the practices of engineering and economics, and also opened space for Rorty to craft a broader vision for the “statistical control of business” through quantitatively informed management."

Market Design Job Market Candidates in Econ and Computer Science (or a combination of the two) from SIGecom Exchanges

 Assaf Romm writes:

"The editors of SIGecom Exchanges were kind enough to host on their November issue a list that I compiled containing profiles of market designers currently on the job market. The profiles contain links to their homepage and CVs, and a short summary of their research and job market papers. There are twelve excellent candidates with very interesting papers!

"The list of candidate profiles is here. "

And here's the list of people described at greater length at the link--you could hire one of them.

Delacretaz, David, Goldner, Kira,  Gonczarowski, Yannai A., Imamura, Kenzo, Koren, Moran, Larroucau, Tomas, Qian, Pengyu, Raghavan, Madhav, Sayedahmed, Dilek, Sullivan, Colin. Thakur, Ashutosh , Vohra, Akhil.

Finally! Paul Milgrom and Bob Wilson win the 2020 Nobel Prize in Economics

 Could this be the best Nobel pairing ever?  (It's certainly a great one, and one of the best things to come out of 2020 so far...) Here's the announcement:

"The 2020 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded to Paul R. Milgrom and Robert B. Wilson “for improvements to auction theory and inventions of new auction formats" https://www.nobelprize.org/

I've known Paul at least since 1978, when he attended a course I taught while on leave at Stanford, on Axiomatic Models of Bargaining. Bob advised both of our dissertations, although not at the same time.  

Bob is a legendary advisor of grad students.  Paul is now the third of Bob's  students to win a Nobel.  So Bob is well established as the patriarch of a Nobel dynasty.

Bob Wilson's Nobel dynasty (to date): Wilson (with Milgrom) 2020, and Bob's students Roth (with Shapley) 2012, Holmstrom (with Hart) 2016, and Milgrom (with Wilson) 2020

It looks like we should check back in 2024...

Here's another picture, from another celebration:

Bob Wilson being celebrated for the 2017 CME MSRI prize, by his students Al Roth, Paul Milgrom, and Bengt Holmstrom.

I've often blogged about  both Milgrom and Wilson, separately and together.

Here's a paragraph I wrote about Bob's work in our (only) joint paper, in which we interviewed each other:

 How Market Design Emerged from Game Theory: A Mutual Interview

Alvin E. Roth and Robert B. Wilson
Journal of Economic Perspectives—Volume 33, Number 3—Summer 2019—Pages 118–143

"Wilson (1977) introduced the model of common-value auctions (sometimes called the “mineral rights model”). The model and its equilibrium initiated a large body of theoretical, experimental, and applied work. One important insight from this model is that winning an auction contains “bad” news, since it implies in equilibrium that the winner’s estimate is the highest. In equilibrium, rational bidders fully account for this, but the paper raises the empirical question of the extent to which actual  bidders are able to fully discount for the fact that, if they win the auction, they likely overestimated the value of winning. Thus, Wilson’s work initiated a new research program on the winner’s curse, involving systematic overbidding compared to equilibrium, sometimes involving losses to the winning bidder. The private-value model of Vickrey (1961) and the common-value model of Wilson (1977) together form the basis of much of modern auction theory and practice, since most auctions have elements of both private and common value." 

Right after that, Bob and I talked about important influences on our work. Bob included this:

"I was deeply affected in the early 1990s by working with Paul Milgrom on design of the FCC spectrum auctions. I marveled at his insights and creativity in constructing rules for a “simultaneous ascending auction” that would have good prospects of yielding an approximately efficient outcome in an environment afflicted with strong complementarities, dispersed private information about market fundamentals, and substantial market power."  

To which I replied:

" I was also much influenced by Paul when we developed and co-taught what may have been the first courses in market design, in 2000 and again in 2001 when he was on leave at Harvard and MIT." 

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Here's an old snapshot:

Bob Wilson and Paul Milgrom in 2006

There's a rabbinical literature about the relationships between students and teachers. It often comes to mind when I think about how lucky I have been to have the students I've had. But today I'm reminded of my luck in having Bob Wilson as my teacher and friend, and Paul as my friend and colleague.

"Joshua ben Perahiah used to say: provide yourself a teacher and acquire yourself a friend. Judge everyone favorably." (Pirkei Avot, chapt 1 verse 6)

Here's how I recalled Bob as a teacher, in an autobiographical essay of a kind that they will each now be asked to write:

"Bob Wilson agreed to be my advisor and rescued me from having what looked to be a very short academic career after I failed one of my Ph.D. qualifying exams. He was on sabbatical that year, but met with me regularly once a week for an hour. In memory, our meetings followed a kind of script: I would spend a while explaining to him why I hadn’t made progress that week, and then he would spend a while telling me not to be discouraged. Then I would describe some roadblock to further progress, and he would, as we finished our meeting, recommend a paper for me to read. Because his recommendations had always been very much on target, I would go straight from his office to the library and start to read the paper. As I did, I would think, this time Bob made a mistake, this paper has nothing to do with my problem. But then, somewhere in the middle of the paper would be a lemma or remark that helped me get around that roadblock …"

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And here's a final picture from Stockholm in 2012, of me and Emilie and Paul and Eva, with Parag Pathak (one of Bob's academic grandchildren) in the  background.

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Read the press release

"The Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2020 to

Paul R. Milgrom
Stanford University, USA

Robert B. Wilson
Stanford University, USA

“for improvements to auction theory and inventions of new auction formats”

...

“This year’s Laureates in Economic Sciences started out with fundamental theory and later used their results in practical applications, which have spread globally. Their discoveries are of great benefit to society,” says Peter Fredriksson, chair of the Prize Committee."
Learn more in the popular information

"Every day, auctions distribute astronomical values between buyers and sellers. This year’s Laureates, Paul Milgrom and Robert Wilson, have improved auction theory and invented new auction formats, benefitting sellers, buyers and taxpayers around the world."
Read the scientific background