Nobel Symposium on Social Networks Lund, Sweden, August, 2023

A Nobel Symposium on Social Networks was held in Lund last month.The papers don't appear to be online, but it ended with a round table discussion:

"You can join in online when the symposium ends with an open “round table discussion” with a panel of leading scientists on August 24 at 14:00. The discussion will be introduced by Tommy Andersson, Professor in Economics at LUSEM and Member of the Committee for the Prize in Economic Sciences in Memory of Alfred Nobel.

The panelists are Prof. Matthew Jackson, Prof. Albert-Laszlo Barbasi, Prof. Kathleen M. Carley, Prof. Damon Centola, Prof. Vittoria Colizza, and Prof. David Lazer."

Stanford was well represented. Aside from my colleague Matt Jackson, Mark Granovetter joined the symposium itself by Zoom (which I guess is a weak link).

Round table discussion: Nobel Symposium on the Future of Network Analysis

 

Nobel watchers, take note.

Crowd control of misinformation, by limiting fast forwarding, by Jackson, Malladi and McAdams in PNAS

 Here's a paper in PNAS about limiting the spread of misinformation by changing the network of information flows:

Learning through the grapevine and the impact of the breadth and depth of social networks by Matthew O. Jackson, Suraj Malladi, and David McAdams

"Abstract: We study how communication platforms can improve social learning without censoring or fact-checking messages, when they have members who deliberately and/or inadvertently distort information. Message fidelity depends on social network depth (how many times information can be relayed) and breadth (the number of others with whom a typical user shares information). We characterize how the expected number of true minus false messages depends on breadth and depth of the network and the noise structure. Message fidelity can be improved by capping depth or, if that is not possible, limiting breadth, e.g., by capping the number of people to whom someone can forward a given message. Although caps reduce total communication, they increase the fraction of received messages that have traveled shorter distances and have had less opportunity to be altered, thereby increasing the signal-to-noise ratio."

Matt Jackson wins the BBVA Frontiers of Knowledge Award in Economics

 The BBVA Foundation Frontiers of Knowledge Award in Economics, Finance and Management has gone in this fourteenth edition to Matthew O. Jackson “for his pioneering work on illuminating the role of networks in economic and social life.”

2 March, 2022

"Jackson, a Professor of Economics at Stanford University, “recognized the importance of networks for economics over 25 years ago,” says the award citation, in a theoretical paper that showed “how to predict which networks will form depending on the costs and benefits of forming links, and how these networks differ from the optimal ones.” His work, it continues, “has inspired an enormous literature, both theoretical and empirical, in which networks play an essential role in helping us understand financial markets, economic development, and a host of other economic phenomena.”

"In 1996, Matthew Jackson and Asher Wolinsky published “A Strategic Model of Social and Economic Networks,” in the Journal of Economic Theory, a paper regarded today as the launch pad for all subsequent literature on the social network approach or theory in economic analysis. In it, the authors define a network as a set of agents (people, but also firms, institutions and markets) connected by links, and modelled the characteristics such networks must exhibit in order to be efficient, to the extent that their component agents are satisfied and the network remains stable.

“Most of our interactions a human beings are social,” explained the new laureate in an interview shortly after hearing of the award. “We depend on other people for information, connections, opportunities, and also for norms of behavior. So the networks we are embedded in become very important determinants of our behavior and outcomes. In that first paper we tried to build the most basic model we could imagine about how people form relationships, whether they be business contacts, friendships, alliances or of any other sort.”

Here's a 13 minute video that starts with an announcement of the prize (by Eric Maskin). An interview with Matt begins around minute 4.

Pandemic policies work differently in different places

Here's a recent largely empirical paper by many authors, looking at the actual and counterfactual impact of different pandemic responses in different cities, with the aim (among others) of mapping the employment/mortality frontier of different policies.  They build on GPS and payment data for modeling movement and interpersonal contact, and electronic health records for hospitalization and deaths.  Thus, for example, they find that in Chicago, different policies can make big moves along the employment/mortality frontier (allowing only essential workers to go to work reduces deaths and increases unemployment, both by a lot), while in a more sparsely inhabited city like Sacramento, it's hard to change the mortality rate (but only allowing essential workers still causes lots of unemployment).

Socioeconomic Network Heterogeneity and Pandemic Policy Response
Mohammad Akbarpour, Cody Cook, Aude Marzuoli, Simon Mongey, Abhishek Nagaraj, Matteo Saccarola, Pietro Tebaldi, Shoshana Vasserman, Hanbin Yang
NBER Working Paper No. 27374
Issued in June 2020

Abstract: "We develop a heterogeneous-agents network-based model to analyze alternative policies during a pandemic outbreak, accounting for health and economic trade-offs within the same empirical  framework. We leverage a variety of data sources, including data on individuals' mobility and encounters across metropolitan areas, health records, and measures of the possibility to be productively working from home. This combination of data sources allows us to build a framework in which the severity of a disease outbreak varies across locations and industries, and across individuals who differ by age, occupation, and preexisting health conditions.

"We use this framework to analyze the impact of different social distancing policies in the context of the COVID-19 outbreaks across US metropolitan areas. Our results highlight how outcomes vary across areas in relation to the underlying heterogeneity in population density, social network structures, population health, and employment characteristics. We find that policies by which individuals who can work from home continue to do so, or in which schools and firms alternate schedules across different groups of students and employees, can be effective in limiting the health and healthcare costs of the pandemic outbreak while also reducing employment losses."

Contact tracing as a component of ending corona pandemic lock-downs

One important idea behind 'flattening the curve' of covid-19 cases is that, if lockdowns reduce the case rate sufficiently, the economy might be able to open up again and leave control of the virus to contact tracing and selective quarantines.  Contact tracing--tracing the contacts of sick people, to see who else they might have infected--was the go to method of trying to control sexually transmitted diseases.  But it's likely that an infected person has an easier time remembering sexual contacts than the much more casual contacts than can lead to covid-19 infection.

And there are lots of ideas about how contact tracing might be conducted (and it isn't clear to me that any of them are being prepared for with sufficient seriousness to be actually put into place anytime soon...). The old fashioned way involves lots of people on the phone, interviewing those who have just tested positive.

Here's one story along that line, from The Hill:
Newsom wants to train 10,000 contact tracers in California

"California Gov. Gavin Newsom (D) said Wednesday that the state is planning to train up to 10,000 contact tracers amid the coronavirus pandemic.

"Expanding contact tracing and testing is one of six indicators Newsom said last week would drive the state’s decision to gradually modify portions of the stay-at-home order. "


And here's another, from Vox:
Contact tracing, explained
The US needs tens of thousands of “disease detectives” to safely reopen the economy.   
By Dylan Scott

"To prevent another spike in cases, public health workers will perform the difficult and sometimes tedious process of interviewing people diagnosed with Covid-19, finding out who they have recently been in close physical contact with, and then informing those people of their potential exposure and advising them to self-isolate and get tested.

“The rapidity with which this work has to be done is really unprecedented,” Jeff Dunchin, who leads the epidemiology division in King County, Washington, the first epicenter of the pandemic in the United States, told me. “If you miss a few cases, those little sparks can set off a forest fire.”
***************

Another part of the contact tracing discussion involves apps on smart phones. The idea is that your phone can report to a good deal of precision where you have been, and/or who you have been near.  That "and/or" has implications for privacy.  If the contact tracers figure out if you and I have been near each other by looking at our path through the world, then they are recording a lot of information about us besides whether we have e.g. been within six feet of each other.  Alternatively, using blue tooth enabled apps, we could just be recording which phones our phone got close to.

In either case, the idea behind phone apps for contact tracing is that if someone tests positive for covid-19, they record it on their app, go into quarantine themselves, and the apps of everyone to whom they have been close (in the last 14 days?) sound the alarms.

Here's a paper in Science:

Quantifying SARS-CoV-2 transmission suggests epidemic control with digital contact tracing
Luca Ferretti *, Chris Wymant *, Michelle Kendall , Lele Zhao , Anel Nurtay , Lucie Abeler-Dörner ,
Michael Parker , David Bonsall1,†, Christophe Fraser1,†‡

Abstract: The newly emergent human virus SARS-CoV-2 is resulting in high fatality rates and incapacitated health systems. Preventing further transmission is a priority. We analyzed key parameters of epidemic spread to estimate the contribution of different transmission routes and determine requirements for case isolation and contact-tracing needed to stop the epidemic. We conclude that viral spread is too fast to be contained by manual contact tracing, but could be controlled if this process was faster, more efficient and happened at scale. A contact-tracing App which builds a memory of proximity contacts and immediately notifies contacts of positive cases can achieve epidemic control if used by enough people. By targeting recommendations to only those at risk, epidemics could be contained without need for mass quarantines (‘lock-downs’) that are harmful to society. We discuss the ethical requirements for an intervention of this kind.
************

Here's a skeptical take on that from Brookings Techstream, that focuses on the considerable problem of false positive and false negative conclusions, and also on privacy and security:

Contact-tracing apps are not a solution to the COVID-19 crisis
April 27, 2020 Ashkan Soltani, Ryan Calo, and Carl Bergstrom

"we urge developers of contact-tracing apps, as well the companies enabling their development, to be candid about the limitations and implications of the technology. To be ethical stewards of these new public health tools, they must also provide explicit guidelines and “best practice” recommendations for the development of the apps. These should include recommendations for how back-end systems should be secured and how long data should be retained, criteria for what public health entities can qualify to use these technologies, and explicit app store policies for what additional information, such as GPS or government ID numbers, can be collected. They should adopt commonly accepted practices such as security auditing, bug bounties, and abusability testing to identify vulnerabilities and unintended consequences of a potentially global new technology. Finally, app creators—as well as the platforms that enable these applications—should make explicit commitments for when these apps and their underlying APIs will be sunsetted.

"There is also a role for law and official policy. If we are to use technology to combat coronavirus, it is critical that we do so with adequate safeguards in place. Here we mean traditional safeguards, such as judicial oversight and sunset provisions that guard against mission creep or limitations on secondary use and data retention that protect consumer privacy. We agree with our colleagues at the Civil Liberties Oversight Board that coronavirus surveillance should learn from the lessons of 9/11. But we also see a role of law and policy in policing against an all too plausible dystopia that technological solutions could enable."
*************

If you are in Australia, here's a government sponsored voluntary contact tracing app that you could try out if you want:
COVIDSafe app
Let's work together to stop the spread of COVID-19
COVIDSafe helps you and all of our communities. Assist health officials to quickly understand and tackle the spread of Coronavirus (COVID-19).
https://www.covidsafe.gov.au/

***********
And here is (a picture) of the above post in Spanish, in the (gated) 20th anniversary edition of the magazine Capital:  Capital cumple veinte años

Matt Jackson, profiled in the Proceedings of the National Academy of Sciences

Matt Jackson in the PNAS: Profile of Matthew O. Jackson

Here's the 'Extract' (the full article seems to be gated but this gives you the idea):

During a lunchtime chat in 1993, Matthew Jackson first became interested in social and economic networks. Jackson and a colleague were discussing how power depends on networks of relationships. As an economist, Jackson had always been interested in modeling and analyzing social interactions and human decision-making. Soon, he and his colleague followed up on their lunchtime discussion by building game theoretic models of how people choose to form relationships (1). “Once I started getting interested in the subject, there were lots of different angles on it that became interesting, and I just started working on it more and more,” he says.

Jackson, the William D. Eberle Professor of Economics at Stanford University, has spent most of his distinguished career studying networks and game theory. He has studied how networks form in varied settings, including research on the root of racial biases in high school friendships and how microfinance spreads in rural Indian villages (2, 3). Jackson’s research has illuminated the role of networks in influencing access to jobs and information (4). “Understanding networks can really help us understand a lot of persistence in inequality and differences across groups in labor markets,” he says. More recently, Jackson has examined why nations go to war (5) and how social structure affects beliefs (6). For his many contributions to the field, Jackson was elected to the National Academy of Sciences in 2015.

Role of Social and Economic Networks

During the course of Jackson’s career, social and economic networks have become a prominent focus of study for economists. Through the work of Jackson and others, it has become clear that understanding networks has wide-ranging applications.

“One area in which it has become obvious to people that networks of interactions matter lately is understanding financial …

[Full Text of this Article]

What does the NSF do? What should it do? Reports from and about the Social, Behavioral and Economic Sciences, and Dec 1 Webinar

What should the National Science Foundation division of Social, Behavioral and Economic Sciences be doing? They asked and we answered, and now they're having a webinar to report the results: here's the email announcement.

Dear Colleague:

Just a year ago, we stopped accepting SBE 2020 white papers.  The papers were released to the public in February and now we have completed a report, Rebuilding the Mosaic, which briefly describes the process, some of the themes we identified, and the programmatic implications of what we learned.  The report is available at: http://www.nsf.gov/sbe/sbe_2020/index.cfm, and we expect to host a webinar/town hall on December 1.  The login details are below.

All of your papers contributed to our thinking about the future of research in the SBE sciences, and we continue to be amazed at and grateful for your participation.  I hope that you will take a moment to read the report – all of the papers are listed in Appendix 5.  For the foreseeable future, we also expect to maintain the website (http://www.nsf.gov/sbe/sbe_2020/index.cfm), where the papers can be individually found and downloaded, since the report cannot substitute for the many ideas that you have shared with us and with the American people.

Although I have written to you before to express my appreciation, one more time, let me say:

Thank you.

Myron Gutmann

Directorate for the Social, Behavioral, and Economic Sciences

National Science Foundation

Details for participating in the webcast:

Date: December 1 at 11 a.m.

Webcast Title: Rebuilding the Mosaic: Listening to the Future in the SBE Sciences

Dial-in phone number:  888-469-1936

Verbal Passcode: Mosaic

Webcast URL:  http://live.science360.gov/    (will be active on Dec. 1.)

Webcast username: webcast

Webcast password: mosaic (case sensitive)

*********
Earlier, in a statement to Congress, Dr. Gutmann highlighted some of the tangible benefits derived from market design work that the NSF has supported:

Statement of
Dr. Myron P. Gutmann,
Assistant Director, Social, Behavioral, and Economic Sciences 
National Science Foundation

Before the Committee on Science, Space, and Technology Subcommittee on Research and Science EducationUnited States House of Representatives

"3.1 SBE research has resulted in measurable gains for the U.S. taxpayer

Matching markets and kidney transplants. Researchers in economics at Harvard University, the University of Pittsburgh, and Boston College have applied economic matching theory to develop a system that dramatically improves the ability of doctors to find compatible kidneys for patients on transplant lists. Organ donation is an example of an exchange that relies on mutual convergence of need. In this case, a donor and a recipient. This system allows matches to take place in a string of exchanges, shortening the waiting time and, in the case of organ transplants, potentially saving thousands of lives.¹⁰ Similar matching markets exist in other contexts, for example, for assigning doctors to residencies.

Spectrum auctions. Spectrum auctions have generated $54 billion for the U.S. Treasury between 1994 and 2007 and worldwide revenues in excess of $200 billion. Researchers at Stanford University and the California Institute of Technology, supported by grants from SBE, developed the simultaneous ascending auction mechanism as a technique for auctioning off multiple goods whose values are not fixed but depend on each other. The mechanism was then tested experimentally and further refined before being implemented by the Federal Communications Commission. In this auction, all of the goods are on the selling block at the same time, and open for bids by any bidder. By giving bidders real-time information on the tentative price at each bid stage, bidders can develop a sense for where prices are likely to head and adjust their bids to get the package of goods they want. This process enables "price discovery," helping bidders to determine the values of all possible packages of goods. These auctions not only raise money, but ensure efficient allocation of spectra so that the winners of the auction are indeed the individuals who value the spectra the most. Applied with great benefit for the U.S. taxpayer in the FCC spectrum auctions, this method has also been extended to the sale of divisible goods in electricity, gas, and environmental markets.^11"

*****************
Here's an earlier post on congressional testimony:

NSF Social, Behavioral and Economic Sciences--attack and defense

Peer to peer overnight accommodations

The NY Times reviews sites of "social network bed and breakfasts" on which you can reserve rooms for overnight stays in cities around the world: Europe Without Hotels.

The sites have various ways to protect against scams:

"In Paris, AirBnB has places in every arrondissement, including $13-a-night rooms in the western suburbs and $285-a-night houseboats on the Seine. As the first Web site of its kind to grab the headlines, the system has already developed a large and loyal user base. Some properties have as many as 70 user-generated reviews, which give paying guests a greater sense of confidence. It is similar to how eBay works: you’re more likely to buy from an eBay seller with good feedback." ...

"After the brief tour, I gave Mr. Mostaedi the code that allows him to collect my payment from iStopOver. That’s one of the safeguards that iStopOver offers to guests. If a listing turns out to be fraudulent or misstated, you can refuse to give the owner the code, and the fee is refunded in full. Other services offer similar protections: AirBnB withholds a host’s payment until 24 hours after guests check into an accommodation in order to fend off potential scammers, and Crashpadder uses credit card payments to verify guest identities (though it says it will monitor but not otherwise involve itself in any disputes)."

Here are the sites mentioned:

"AIRBNB.COM
AirBnB.com, founded in 2007 in San Francisco, is the largest of this new generation of social B&Bs and has the most user reviews.
Where: About 5,378 cities in 146 countries.
Accommodations: Air mattresses to entire villas.
Price: In New York, from $10 for a room to $3,000 for a loft.
ISTOPOVER.COM
IStopOver, founded in 2009 in Toronto, specializes in big events, like this summer’s World Cup in South Africa.
Where: Mostly North America, Europe and South Africa.
Accommodations: Apartments and houses.
Price: $10 to $8,000 a night.
CRASHPADDER.COM
Founded in 2008 in London, Crashpadder.com operates mostly in Britain, with a surge expected during the 2010 Olympics in London.
Where: 898 cities, including more than 1,000 listings in London.
Accommodations: Bedrooms to houses.
Price: From £15 (about $21 at $1.43 to the pound) a night, plus £3 booking fee.
ROOMORAMA.COM
Founded in 2008, Roomorama.com focuses on higher-end properties, especially in New York City.
Where: 36 cities, including more than 1,000 listings in New York.
Accommodations: Bedrooms to houses.
Price: From $30 to $5,000, plus an 8 to 12 percent booking fee. "

More on kidney donation and social networking

It continues to look like social networking may become big for kidney donation. Here's a recent story from New England: Conn. mayor donates kidney to Facebook friend

"Sanchez, a 44-year-old father whose kidneys were failing because of diabetes, sent out the request on Facebook only hesitantly and on his doctor's suggestion. He worried people might pity him -- and certainly hadn't pinned his hopes on finding a donor that way.
He didn't have long to wait. Capone Almon was the first person to respond.
"I sent him a private message and just said, 'Hey, I'll try. I'll get tested,'" Capone Almon said Wednesday. "I really felt from the very beginning that I was going to be a match and a donor. I don't know why, but I just knew it."
Sanchez had no such certainty.
"I thought she was joking. The mayor of East Haven would offer me her kidney?" said Sanchez, an office administrator. "She responded back and said, 'I am serious, I am willing to get tested.'"
...
"Capone Almon, a Democrat, was running for a second term as mayor at the time but kept the details of her medical plans a secret. She won the election as they awaited word on when she could donate the kidney, saying they grew as close as family during the lull.
"I know he voted for me, too," she joked.
The operation was set only after Capone Almon passed a battery of tests and was given a long explanation of the process, which involved three small incisions near her ribcage and a scar similar to that of a cesarean section.
"What the doctors said to me is, 'Your recipient is already sick and we're not going to make you sick to make him somewhat better,'" she said. "They do not compromise the donor's health in any way, shape or form."
Their tenuous connection was cemented into a lasting bond April 8, when doctors at Yale-New Haven Hospital removed Capone Almon's left kidney and transplanted it into Sanchez.
They were released from the hospital in less than a week and are expected to make full recoveries. His insurance paid for both their surgeries, and the mayor is back on the job in this middle-class city of about 30,000."

HT: Alexander Ruiz

Networks in markets that unravel, and those that don't: Itay Fainmesser

Itay Fainmesser defended his dissertation yesterday.

One of the papers in his dissertation concerns job markets that have “unraveled” so that a large part of the market consists of early, exploding offers. He develops a network model, motivated by the observation that when many markets unravel (as when medical labor markets start to hire doctors well over a year before they begin employment), hiring also becomes more local (as hospitals start to hire students from local medical schools, etc.). Itay takes this as evidence that when hiring is very early, employers are forced to rely more on their local networks for information. He builds a network model that allows him to investigate which properties of local networks lead to unraveling, and which lead to later hiring. In this model, information about the quality of candidates eventually becomes widely available, but early information about candidate quality can only be reliably transmitted along links of a network. (When Markets Unravel: Social Networks, Information Transmission, and the 'Hiring Frenzy' older version here.)

Another of his papers tackles the question of cooperation in repeated games, where the possible interactions are constrained by a network, and he asks which buyer-seller network structures will support persistent cooperation (where sellers have an opportunity to cooperate by shipping a high quality good, or to defect by shipping a low quality good). It’s a hard problem, and (in a third paper) he and a coauthor invent models and tools to deal with it (in a large-network framework), that allow him to turn some difficult non-monotonic relationships among networks into well behaved statements about the value of links. (Community Structure and Market Outcomes: Towards a Theory of Repeated Games in Networks )

Itay will be an assistant professor of economics at Brown next year.

Welcome to the club, Itay.

Michael Kearns heads up a new market design program at Penn

The University of Pennsylvania today issued a press release announcing a new undergrad program: Penn Launches Undergraduate Program in Market and Social Systems Engineering, Nation’s First.

"PHILADELPHIA -- The University of Pennsylvania has launched a first-of-its-kind program that will prepare undergraduate students to shape the technologies that underpin Web search, keyword auctions, electronic commerce, social and financial networks and the novel and unanticipated markets and social systems of the years ahead. "
...
"“Traditional programs don’t prepare students to design systems that take into account the goals and incentives of the people who use them,” said Michael Kearns, professor in the Department of Computer and Information Science in Penn’s School of Engineering and Applied Science and the program’s founding faculty director. “We haven’t asked engineering students to take a course in game theory to understand how incentives work or in sociology to understand human behavior. There is now enough science out there on the intersection of these topics to design undergraduate courses.”
In 2003, Kearns developed a Penn course, Networked Life, which engages students in hands-on explorations of the networks in which they participate every day. Now one of the most popular courses at the University, Networked Life also served as a proving ground for the larger MKSE program of which it will become a part.
Kearns is the National Center Professor of Computer and Information Science in Penn Engineering, with secondary appointments in Statistics and Operations and Information Management at The Wharton School. "

Entrepreneurial Market Design

In the coming weeks, I'll be making a series of posts on a subject I term Entrepreneurial Market Design, the study of creating for-profit marketplaces. Such marketplaces often require innovations (market rules, information flows, timing adjustments, reputation mechanisms) to resolve longstanding inefficiencies (lack of market thickness, adverse selection, high transaction costs, etc). These innovations can create significant value for market participants, and at the same time offer a promising business model for the entrepreneur.

I've had the opportunity to study many such markets, in the capacity of academic researcher, case author, and advisor to students who are have started market-based businesses. The first set of markets I'll list are those founded or managed by recent HBS students with whom I've interacted. Future posts will go into greater detail on these.

TeachStreet. TeachStreet is a platform for matching students with classes, usually in a non-academic setting. Instructors of classes ranging from foreign language to cooking to SAT prep to belly dancing post listings on TeachStreet.com. Users browse through classes and sign up, and Teachstreet takes a commission for each new student. Julie Sandler, a current HBS student, is currently investigating how to expand to the platform to include children's classes. www.teachstreet.com

RelayRides. Concisely described as a peer-to-peer version of Zipcar. Car owners sign up to make their cars available for rental, naming their own rates and hours. Renters select from available cars. In theory, prices could be lower than in Zipcar and fleet size could be much larger. This looks like a classic two-sided network, but with some intriguing challenges of insurance, monitoring, and adverse selection. The founders are HBS students Shelby Clark and Nabeel Al-Kady. http://www.relayrides.com/check-zip.cgi?zip=21202&x=10&y=16

ClearMechanic. ClearMechanic is a platform to better connect auto mechanics with their customers. In an industry often considered technologically backward and rife with trust problems, ClearMechanic is meant to offer transparency and online accessibility to auto-owners. Using ClearMechanic, customers can go online to see the where their repair is in the work queue, learn about the repair being done, and interact with the repair shop. It also serves a marketplace for complementary products, such as accessories, insurance, repurchase options. The founder and CEO is Brad Simmons, a former student of my MBA class Managing Networked Businesses. www.clearmechanic.com

VigLink. VigLink is a startup that describes itself publicly as “building a unique platform for the real-time optimization of affiliate marketing." The founder, Oliver Roup is a recent HBS graduate and former student of Managing Networked Business. www.viglink.com

Cork'd. Cork'd is a social network for wine lovers. The founder is wine celebrity Gary Vaynerchuk, and the CEO is Lindsay Ronga, a former student in Managing Networked Businesses. Among other goals, Cork'd would like to match users with their favorite wines. www.corkd.com

SaleAwayWithMe. SaleAwayWithMe is a website that offers users customizable notifications about sales from their favorite brands. SaleAwayWithMe differentiates itself from spammy newsletters in that specific brands can be chosen, their sales are consolidated into a single list, and users can set thresholds (e.g. only include the most popular notices, such as sale notices that XX% of recipients click on.) SaleAwayWithMe is in a very early state, and was founded by former HBS student Sumir Meghani. www.saleawaywithme.com

I've recently spoken with all of the founders/managers of these companies, and each is willing to work with students who choose to study the business as part of the class project.

Trust and trustworthiness: promoting and maintaining it

Trust is essential for all sorts of transactions, and how to set up institutions to promote trust and trustworthiness in the marketplace is a big concern of market design.

It is even a big concern of armies trying to win the hearts and minds of a population in the face of a guerrilla insurgency. There's a very interesting essay in the Washington Post about earning, maintaining and restoring trust, by Admiral Mike Mullen, the Chairman of the Joint Chiefs of Staff: Building Our Best Weapon.

On a more technical note, I'm reading Community Structure and Market Outcomes: Towards a Theory of Repeated Games in Networks by Itay Fainmesser (who you can try to hire next year). He is interested how patterns of connections between buyers and sellers can promote trustworthy behavior through repeated play, and how the effort to achieve trust in the marketplace by engaging in long term relationships may exclude some parties from the market. In this connection he writes "...repeated interactions cannot perfectly substitute for institutions..."

The kinds of institutions he is thinking of are both legal (if you can sue me for non-performance, this makes it easier to trust me), and reputational (if you can give me a credible negative review that will impede my ability to transact in the future, this also makes it easier to trust me).

As it happens, I've also been reading about the recent redesign of eBay's reputational system: "ENGINEERING TRUST - RECIPROCITY IN THE PRODUCTION OF REPUTATION INFORMATION," - by Gary Bolton, Ben Greiner, and Axel Ockenfels. It is a very nice market design paper.

They describe some of the design concerns behind eBay's 2007 rollout of its new, more detailed feedback system, in which buyers are able to give some feedback on sellers anonymously. In particular, they describe how they and eBay became concerned that the old reputation system became less informative than it might have been, because the pattern of reciprocally positive feedback concealed underlying dissatisfactions. They describe how (both prospectively and retrospectively) they compared the relevant field data, and how laboratory experiments helped verify the intuitions gained in that way, and allowed them to see the efficiency effects of an improved reputation system.

Online job search

The WSJ has two articles about congestion on online job search sites. The first reports that, not only is it hard for employers to sort through applicants, a growing number of advertised positions may be deceptive, duplicate, already-filled, or fraudulent: It Isn't Always a Job Behind an Online Job Posting: Employment Ads on the Web Can Lead You to Marketing Pitches, or Worse.
Online job seekers may be particularly susceptible to fraud, because they are willing to give out various kinds of personal information, etc.

An accompanying article asks various recruiting professionals for advice:
Experts Weigh In on Job Boards . Some quick quotes:

Re Monster, CareerBuilder and HotJobs "They do a nice job for very young, entry-level job hunters," says Michael Mellone, a senior consultant at ClearRock, a Boston-based outplacement firm. But for more experienced professionals, he says, industry-specific job sites such as efinancialcareers.com and HigherEd.com are more effective."

"For Mr. Crispin, Jobing.com wins high marks. The site specializes in advertising local employment for job hunters in 41 metro areas across the country. "They have people who physically go out and meet with professional associations that are trying to get their members hired," he says.
Mr. Crispin also favors the site for the DirectEmployers Association, jobcentral.com. Job hunters interested in positions advertised on the site can click on a link to be taken directly to the employer's Web site. "You apply to the company firsthand," he says."

"Rich Gee, an executive coach in Stamford, Conn., recommends Execunet.com. "It's a serious job site," he says. "You cut right through the noise and get to the actual job."
Q: Execunet charges a fee to respond to its help-wanted ads. So do TheLadders and some other job boards. Are they worth paying for?
A: "It's not a lot of money for what you get in return, which is a great filter to get to serious jobs," says Mr. Gee.
Ms. Hightower Hill says many job hunters she's worked with complain that too many employment ads on TheLadders are anonymous, making research and due diligence difficult. "It's pretty hard to follow up because you don't always know the identity of the company," she explains."

"Q: What advice do you have for job hunters searching employment boards?
A: Don't put too much time into them, advises Mr. Cohen. He recommends investing heavily in networking in person and online."

"Networking" isn't just a buzzword. In 1973, the eminent economic sociologist Mark Granovetter first documented the strength of weak ties, and the fact that many jobs are found through friends of friends. The idea is that your close friends have more or less the same information you do, so they may not know of any job openings that you don't already know of. But as you reach out to people to whom you are only more distantly connected, you gain access to new information.

In the years to come it will be interesting to learn whether online job search and other market-making activities change how most jobs are found.

Market for electric cars

Before there's a very big market for all-electric cars, there would have to be a way to take long trips in them. For gas-powered cars, there's an extensive infrastructure of filling stations around the world's network of roadways. The NY Times reports on one company's plans to initiate such a network of stations, where you could change your depleted battery for a full one: Mapping a Global Plan for Car Charging Stations

"Mr. Agassi said the first 50 stations would be built in Israel by the end of 2010, the same time Renault’s electric cars would be introduced there, and followed by installations in Denmark, Hawaii and elsewhere. "

Israel and Hawaii seem like natural places to get electric cars started. Both of them are islands as far as auto traffic is concerned: very few people drive out of either one of them. So it should be possible to serve all the driving needs with a small, dense network. Denmark will be harder, since although many car trips that begin in Denmark remain in Denmark, Danes also can drive to Germany and Sweden, and from there on to the wide world, so a Dane with an electric car would, at least for a while, be more limited than one with a gas-powered car.

Networks and high school athletes

While the NCAA regulates the communication between high school and college coaches, it has more trouble regulating third-party networkers, the NY Times reports: College Recruiting’s Thin Gray Line. It isn't entirely clear who is extracting information rents from whom, but one worries about the high school players.

"“Recruiting for college football is obviously changing,” Prince said in a telephone interview. “It’s become much more like the basketball model. When that happens, you then have people who are intermediaries ...”"

HT Muriel Niederle

Networks and labor markets: Internships

The British government is promoting internships as one entryway into the labor market, and as a way to increase social mobility. But the Times of London notes: Sharp middle-class elbows are winning the intern wars

"Even the Labour party is not above calling in favours from chums. Euan Blair, son of the former prime minister, did two stints as an intern in the US Congress. He also worked as a production runner on a film set in the Houses of Parliament, and had work experience at a Paris radio station owned by Bernard Arnault, France’s richest man. "

Aside from personal connections, there are starting to be some market institutions:

"Parents with less exalted connections have little choice but to stump up cash. Work experience has become a popular prize at charity auctions: just before Christmas a week’s unpaid work at ITV Productions fetched £1,260."
"Work experience has always been tricky to come by, but at the moment demand vastly outstrips supply. Wexo, Work Experience Online, whose web address is www.wexo.co.uk, is a Facebook-style website that matches employers with people looking for work experience. It currently has 200 companies on its books – including Armani and Sony Music – and about 2,000 young people hoping to be interns. According to Robin Kennedy, the site’s co-creator, there are more applications towards more glam sectors like marketing, fashion, and entertainment. Don’t, though, think all work experience is so exciting. The company named last year as best work experience provider was Shetland Seafood Auctions, whose seven staff provide an electronic auction service at Lerwick fish market. "