School choice with outside options , by Akbarpour, Kapor, Neilson, van Dijk, and Zimmerman in J.Pub.E.

 One of the differences between market design and the theoretical mechanism design literature is that in mechanism design, the theorist creates the whole universe of strategies available to participants, while in practical market design, the marketplace being designed is part of some larger economic environment, which gives the participants potentially bigger strategy sets.

Here's a paper that takes that point of view with respect to school choice. In the empirical part of the paper, a switch from a manipulable immediate acceptance algorithm to a strategy proof  deferred acceptance algorithm influences families with an outside option (a guaranteed continuation in the school where they are enrolled in pre-kindergarten) differently from families without that safe option.  When the manipulable algorithm is used, families without an outside option often find it too risky to compete for scarce spaces in the most desirable schools, which they can safely do when the strategy proof algorithm is employed.

Centralized School choice with unequal outside options by Mohammad Akbarpour, Adam Kapor, Christopher Neilson, Winnie van Dijk, Seth Zimmerman, Journal of Public Economics, Volume 210, June 2022, 104644

Abstract: We study how market design choices exacerbate or mitigate pre-existing inequalities among participants. We introduce outside options in a well-known school choice model, and show that students always prefer manipulable over strategy-proof mechanisms if and only if they have an outside option. We test for the proposed relationship between outside options and manipulability in a setting where we can identify students’ outside options and observe applications under two mechanisms. Consistent with theory, students with an outside option are more likely to list popular, highly-rated schools under the Boston mechanism, and this gap disappears after switching to a Deferred Acceptance mechanism.

*******

Related earlier posts:

Monday, January 28, 2019

School choice in New Haven: studied by Kapor, Neilson and Zimmerman and switching from immediate to deferred acceptance

Sunday, March 22, 2020

School choice without the assumption of full-information equilibrium by Kapor, Neilson and Zimmerman

And here's a post about a paper that takes outside options seriously from a different point of view.

Monday, December 14, 2020

Designing centralized marketplaces that work gracefully with pre-existing decentralized ones, in Management Science, by Benjamin Roth and Ran Shorrer

More on NYC school choice lotteries

 Following my recent post on random numbers in the NYC school choice system(s) for high school and middle school, Amélie Marian writes to me from Rutgers, where she is a professor of computer science and a close observer of school choice.

She writes:

"I just read your blog post about the NYC school lottery system glitch and I found the comparison to plumbing extremely adequate to describe what has been happening with the NYC school admission system these past few years. 

...

"One of the most major recent change is that most admissions are now decided solely by lottery numbers; most schools don't rank students anymore***. The random number, originally designed as a tie-breaker, is now the main deciding factor. With this in mind, I, along with parent advocacy groups, pushed the DOE to provide students with their lottery numbers so that families could adjust their expectations and strategize their lists to avoid being unmatched; in one Manhattan district last year, 18% of students did not receive an offer to a school on their list. I have been working on explaining the system to parents, and on crowdsourcing data to help parents estimate their student's odds of admissions at various schools:

 * Part 1 on the random numbers: https://medium.com/p/bae7148e337d  

* Part 2 on their impacts on strategy: https://medium.com/p/42dd9a98b115

"*** MS admissions is purely lottery-based but geographically limited by district. HS admissions is city-wide. Some HS are allowed to screen students, but the screening is very coarse; this year 63% of students qualify in the top screening group, within the group admissions are decided by lottery numbers.

 "Of course, every modification in the system has had unintended consequences. The "glitch" reported by the NYPost was likely due to the DOE system assigning random numbers to applications and not to students, which was a reasonable approach as long as the numbers were not shared with families. And, as you pointed out in previous blog posts, the addition of waitlists has had repercussions as well. In fact, the DOE has changed the way it processes waitlists yearly since their inception, most likely to fix the problems that the previous iteration created. The latest version unfortunately introduces an incentive to strategize for waitlists in the original choice ranked list. "

2022 Easter Workshop on School Choice Belfast, April 25-26, 2022

 2022 Easter Workshop on School Choice Belfast, April 25-26, 2022

"In recent years, there has been a great deal of research activity to study and design systems to assign students to schools. Funded by the ESRC and the Leibniz Association, we are happy to organize a joint workshop with ZEW – Leibniz-Centre for European Economic Research to discuss the latest theoretical and empirical developments in the field.

"We are happy to announce that Professor Aytek Erdil will deliver a keynote presentation on a modern design for university admissions in the UK.

Here is the Program 

 Organisers:  Josue Ortega and Thilo Klein

HT: Bertan Turhan

NYC plugs a school choice leak (of random numbers)

 Some time ago, Esther Duflo likened market design to plumbing. I think she had in mind construction plumbing, making sure the pipes are all tight. But there's also maintenance (and home repair) plumbing, which involves plugging new leaks.  Parag Pathak alerts me to such an issue in New York City's school choice system.

The NY Post has the story:

Parents uncover major glitch in NYC school lottery system  By Susan Edelman 

"A Manhattan mom discovered an embarrassing glitch in the city Department of Education lottery system used to match students with middle and high schools.

"When NYC students filled out their online applications for 2022-23, each kid automatically received a long string of random numbers from 0 to 9 mixed with lower-case letters from a to f. 

"The random numbers are used to determine the order in which students are matched to programs.

"Lottery numbers starting with 0 are most likely to land students in a school at the top of their list – 8th graders can rank up to 12 preferred high schools. 

...

"But as one 8th-grader’s mom figured out, if students canceled and re-started their applications – as the DOE permitted – they received a different lottery number each time. The loophole allowed users to potentially game the system by simply re-applying until a favorable lottery number popped up.

"Parent leaders alerted the DOE’s Chief Enrollment Officer, Sarah Kleinhandler, who was unaware of the snafu and promised to look into it. She did.

...

"The DOE said it was able to identify 163 students who received new lottery numbers – less than 1 percent of applicants. They included 121 students out of 71,000 high-school applicants, and 42 students out of 58,000 middle school applicants, a spokesman said.

"Students who received new lottery numbers after restarting their applications will get their first lottery numbers back, a spokeswoman told The Post."

**********

Speaking of home repairs, here's an earlier post about some self inflicted problems:

Tuesday, May 12, 2020

Confusion in NYC high school wait lists

Lowell High School principal resigns in San Francisco, in latest setback for elite high school

Elite public schools, which admit students by exam, are under attack in many places.

In San Francisco, that would be Lowell high school, whose principal has just resigned.  SFGate has the story.

Principal at Lowell High School abruptly resigns, rebuking SFUSD in resignation email  by Joshua Bote

"The principal of Lowell High School — the highly selective, highly controversial school at the center of this year’s San Francisco school board recalls — has resigned, rebuking the school district in a farewell email sent Wednesday.

...

“While I deeply appreciate you all for the community and support I have received in the last three years, the decision to leave SFUSD is solely based on my desire to apply my passion for education in a district that values its students and staff through well organized systems, fiscal responsibility and sound instructional practices as the path towards equity,” Dominguez wrote in the email.

"Statewide budget cuts, due in large part to decreasing student attendance, have hit San Francisco Unified hard this year, with Lowell being affected by a pause of funding to its Advanced Placement program — perhaps where the allusion to “fiscal responsibility” in Dominguez’s email comes from.

"In the past year, Lowell made national headlines when the decision to replace its GPA- and test score-based admissions policy with a districtwide lottery was approved by the previous school board, receiving criticism from parents who said that they were “caught off guard” by the decision. The move, intended to increase racial equity and diversity on campus, was put on hold by a San Francisco court in November 2021."

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

Here are some earlier related stories about the troubles at Lowell and in SF:

More School Board Drama Looming, as Lowell High Sticks to Lottery-Based Admissions Another Year  2 DECEMBER 2021

"The SFUSD superintendent says there’s not enough time to implement a court order to re-vote on admissions changes at Lowell. That’s likely to further infuriate the alumni groups that sued the district to win that court order."

 ------------

The SF Chronicle covered the first act of this play in three acts:

S.F.'s elite Lowell High School would permanently switch to lottery admission under fast-track proposal  by Jill Tucker  Jan. 30, 2021

"San Francisco’s elite academic public high school would no longer admit students based on top grades and test scores, and instead use a random lottery system for admission, if the school board approves a measure fast-tracked for a vote."

^^^^^^^^^^^^^^^

And here's an earlier post that touches on similar developments in Boston and NYC:

Monday, March 22, 2021

Elite public schools move away from exams

School Choice by Atila Abdulkadiroglu & Tommy Andersson

Here's a big new survey on school choice theory and practice:

School Choice  by Atila Abdulkadiroglu & Tommy Andersson, NBER working paper 29822

DOI 10.3386/w29822 ISSUE DATE March 2022 (forthcoming in the Handbook of the Economics of Education vol. 6).

Abstract: School districts in the US and around the world are increasingly moving away from traditional neighborhood school assignment, in which pupils attend closest schools to their homes. Instead, they allow families to choose from schools within district boundaries. This creates a market with parental demand over publicly-supplied school seats. More frequently than ever, this market for school seats is cleared via market design solutions grounded in recent advances in matching and mechanism design theory. The literature on school choice is reviewed with emphasis placed on the trade-offs among policy objectives and best practices in the design of admissions processes. It is concluded with a brief discussion about how data generated by assignment algorithms can be used to answer contemporary empirical questions about school effectiveness and policy interventions.

Some paragraphs from the conclusions:

"Parental choice over public schools has become a major part of education reform around the world. In the US alone, the proportion of the largest 100 schools districts with parental choice over public schools doubled between 2000 and 2016 (Whitehurst, 2017). Currently, parents in Belgium, England, Ireland, Italy, the Netherlands, Portugal, Sweden, Wales, and Northern Ireland have the right to or must choose a public or a private school at the primary, lower and upper secondary levels for their children. In fact, for the upper secondary level, only six European countries (Denmark, Greece, France, Cyprus, Malta and Turkey) do not have any type of school choice program and, instead, assign students to schools based on their place of residence (European Commission, 2020). Consequently, the demand for rigorous solutions for student assignment has been growing. Each school-choice program comes with its own institutional and political constraints, which opens the door for further research. In fact, most of the theoretical literature on school choice is motivated by real-life problems identified in the field.

...

"This chapter has focused on student assignment in school choice by taking preferences and priorities as exogenous. An equally important question concerns the welfare consequences of school choice. In particular, the models in the literature ignore probably one of the most important aspects of school choice: access to a school is determined not only by the ability to list the school in the application form, but also by admissions policies, such as neighborhood priority, and by means for traveling to the school. This makes both preferences and priorities endogenous. While wealthy families can choose affluent neighborhoods with good schools before going through the formal choice process, low income families are shut out of such residential choice. The matching models of school choice regularly ignore housing markets, families’ endogenous housing decisions and their impact on welfare. Recent advances in this direction have been made by studying school choice with competitive housing markets and a continuum of students. For example, in a fairly general model, Grigoryan (2021) offers a convincing theoretical argument in favor of school choice by showing that low income families are better-off under deferred acceptance in comparison to solely residence-based school assignment even when applicants are granted neighborhood priorities in deferred acceptance. Much work is still to be done both theoretically and empirically on that frontier.

...

" data generated by assignment algorithms can be used to answer most pressing empirical questions on school effectiveness and policy interventions.29 Seats in a school choice program are rationed by admissions priorities, such as neighborhood priority for pupils living within a certain distance from school, lotteries, student rankings at the school which may be based on an entrance examination, academic records, interviews and other criteria. Such rationing creates quasi-experimental variation in school assignment at unprecedented levels that can be used for credible evaluation of individual schools and of school reform models, such as charters, small schools, and voucher programs. A recent literature focuses on research design with data from centralized admissions and develops econometric techniques."

Matching and market design in the January issue of Theoretical Economics

 The current issue has three papers on the market design of matching markets.

Theoretical Economics, Volume 17, Number 1 (January 2022): Table of Contents

Here are the market design articles that caught my eye:

Rank-optimal assignments in uniform markets  by Afshin Nikzad

"We prove that in a market where agents rank objects independently and uniformly at random, there exists an assignment of objects to agents with a constant average rank (i.e., an average rank independent of the market size). The proof builds on techniques from random graph theory and the FKG inequality (Fortuin et al. (1971)). When the agents’ rankings are their private information, no Dominant Strategy Incentive Compatible mechanism can implement the assignment with the smallest average rank; however, we show that there exists a Bayesian Incentive Compatible mechanism that does so. Together with the fact that the average rank under the Random Serial Dictatorship (RSD) mechanism grows infinitely large with the market size, our findings indicate that the average rank under RSD can take a heavy toll compared to the first-best, and highlight the possibility of using other assignment methods in scenarios where average rank is a relevant objective.

*******

Family ties: school assignment with siblings by Umut Dur, Thayer Morrill, and William Phan

"We introduce a generalization of the school choice problem motivated by the following observations: students are assigned to grades within schools, many students have siblings who are applying as well, and school districts commonly guarantee that siblings will attend the same school. This last condition disqualifies the standard approach of considering grades independently as it may separate siblings. We argue that the central criterion in school choice—elimination of justified envy—is now inadequate as it does not consider siblings. We propose a new solution concept, suitability, that addresses this concern, and we introduce a new family of strategy-proof mechanisms where each satisfies it. Using data from the Wake County magnet school assignment, we demonstrate the impact on families of our proposed mechanism versus the “naive” assignment where sibling constraints are not taken into account."

**********

Optimal organ allocation policy under blood-type barriers with the donor-priority rule by Jaehong Kim and Mengling Li

"Shortages in organs for transplantation have resulted in a renewed interest in designing incentive policies to promote organ supply. The donor-priority rule, which grants priority for transplantation based on deceased organ donor registration status, has proven to be effective in both theory and practice. This study investigates the implications of the donor-priority rule for optimal deceased organ allocation policy design under a general formulation of blood-type barriers. We find that for any blood typing and organ matching technology, reserving type X organs for only type X patients maximizes the aggregate donation rate under regular distributions, which also ensures equity in organ sharing. Moreover, this is the unique optimal allocation policy if and only if the directed compatibility graph that corresponds to a given organ matching technology is acyclic."

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

 When it's costly to gather information needed to inform yourself about your own preferences, having a guaranteed offer in hand may justify the effort to gather necessary information.  Here's a paper that considers that as a first order issue:

The Case for Dynamic Multi-offer Mechanisms, by Julien Grenet YingHua He Dorothea Kübler

January 2022, (Forthcoming: The Journal of Political Economy)

Abstract: We document quasi-experimental evidence against the common assumption in the matching literature that agents have full information on their own preferences. In Germany’s university admissions, the first stages of the Gale-Shapley algorithm are implemented in real time, allowing for multiple offers per student. We demonstrate that non-exploding early offers are accepted more often than later offers, despite not being more desirable. These results, together with survey evidence and a theoretical model, are consistent with students’ costly discovery of preferences. A novel dynamic multi-offer mechanism that batches early offers improves matching efficiency by informing students of offer availability before preference discovery.

**********

Update: the paper appears as

Grenet, Julien, YingHua He, and Dorothea Kübler. "Preference Discovery in University Admissions: The Case for Dynamic Multi-offer Mechanisms." Journal of Political Economy, volume 130, number 6, June 2022, 1427-1476,  https://www.journals.uchicago.edu/doi/epdf/10.1086/718983

Centralized Student Choice and Assignment Systems around the world

 Christopher Neilson at Princeton has launched a web site aimed at organizing information on school choice around the world. The site opens with an ambitious world map, and it looks like there is still plenty of room for contributions from people with information on school choice systems wherever they are.

Centralized Student Choice and Assignment Systems

"Centralized Choice and Assignment Systems have been implemented in many countries and different settings, in an adoption trend that is likely to continue.

"With support from the Industrial Relations Sector at the Economics Faculty of Princeton University, this project aims to document the adoption trend and the large heterogeneity in implementation practices, with the objective of fostering further research into the different systems and identifying best practices for different contexts.

"The team has worked intensively in collecting and organizing the data. Nonetheless, the project is very ambitious and information about the different systems can be improved and needs to be updated. Therefore, with this challenge in mind, this webpage has been created to be able to share the data with the research and policy making communities around the world, and to invite everyone to contribute to the effort, suggesting edits and additional information that will improve upon the data collected."

Costly information gathering to form preferences in school choice

 Here's a model suggesting that people for whom it is more costly to gather information about school quality will do less well in preference based school choice.

Inattention and Inequity in School Matching, by Stefan F. Bucher & Andrew Caplin, NBER WORKING PAPER 29586, DOI 10.3386/w29586

Abstract: The attractive properties of the Deferred Acceptance (DA) algorithm rest on the assumption of perfect information. Yet field studies of school matching show that information is imperfect, particularly for disadvantaged students. We model costly strategic learning when schools are ex ante symmetric, agree on their ranking of students, and learning is rationally inattentive. Our analytic solution quantifies how each student’s rank, learning costs and prior beliefs interact to determine their gross and net welfare as well as the extent and form of mistakes they make. In line with the evidence, we find that lower-ranked students are affected disproportionately more by information costs, generally suffering a larger welfare loss than higher-ranked students. Interactions between mechanism design, inattention and inequity are thus of first order importance.

**********

"The challenge faced by matching models with endogenous information is that students face three sources of uncertainty: signal-based, deriving from uncertainty about what information their learning strategy will produce; strategic, deriving from uncertainty about others’ submissions and thus the resulting matching outcome; and value-based, referring to the remaining uncertainty about the student’s valuation of their tch.

We introduce a tractable model of strategically rational inattention in a matching market that parsimoniously captures this complexity. To focus on the interplay with inequity we assume that schools agree on their ranking of students. For analytic tractability we assume that schools are ex ante symmetric (exchangeable) and that learning is rationally inattentive (Sims, 2003; Caplin and Dean, 2015; Matejka and McKay, 2015). While our symmetry assumption implies that schools are ex ante identical, it does not require that students’ valuations are independent across schools so that information on a school can update beliefs about others.

...

"A central finding is that DA exacerbates inequity. Lower-ranked students attain a lower fraction of their net welfare surplus under full information than do higher-ranked students, even if they have the same costs of learning. This is because lower-ranked students face greater uncertainty about the outcome resulting from any submission, which disperses and often dilutes their incentive to acquire information.

...

"The fact that lower-ranking students are more likely to be matched with a school further down their list results in very unequal learning incentives..."

School choice using deferred acceptance algorithms increases competition for selective schools, by Terrier, Pathak and Ren

 Here's a working paper from the LSE which concludes that making it safe for parents to truthfully report their preferences increases the competition for selective schools (called grammar schools, which prioritize students based on admission tests), with the unintended consequence of disadvantaging poorer families in England. The paper contains a good description of past and present school assignment regimes in England.

From immediate acceptance to deferred acceptance: effects on school admissions and achievement in England by Camille Terrier Parag A. Pathak and Kevin Ren,  Centre for Economic Performance Discussion Paper No.1815, November 2021

"Abstract: Countries and cities around the world increasingly rely on centralized systems to assign students to schools. Two algorithms, deferred acceptance (DA) and immediate acceptance (IA), are widespread. The latter is often criticized for harming disadvantaged families who fail to get access to popular schools. This paper investigates the effect of the national ban of the IA mechanism in England in 2008. Before the ban, 49 English local authorities used DA and 16 used IA. All IA local authorities switched to DA afterwards, giving rise to a cross-market difference-in-differences research design. Our results show that the elimination of IA reduces measures of school quality for low-SES students more than high-SES students. After the ban, low-SES students attend schools with lower value-added and more disadvantaged and low-achieving peers. This effect is primarily driven by a decrease in low-SES admissions at selective schools. Our findings point to an unintended consequence of the IA to DA transition: by encouraging high-SES parents to report their preferences truthfully, DA increases competition for top schools, which crowds out low-SES students."

And here are the paper's concluding sentences:

" In England, selective schools pick students based on test scores, which favors high-SES parents. After the transition to DA, high-SES parents enroll at these schools at higher rates. Selective admissions are widespread throughout education, so our results provide an important caution to equity rationales for DA over IA in settings where selective schools have large market share."

The Elements of Choice (Architecture) by Eric Johnson

Eric Johnson's new book is about choice architecture, and how when choices are presented in a confusing way, we may make bad decisions.

The Elements of Choice. WHY THE WAY WE DECIDE MATTERS  By ERIC J. JOHNSON

One of the points the book makes is that having too many choices may impede the quality of your decision: you might do better if the choice architect had narrowed or better organized your choice set to make it easier for you to fluently understand the choices presented, which would enable you to make a more accurate decision.

Here is a picture of the first search result that appeared when I searched for the book, which I surmise is an ad composed by the publisher:

I read with interest his discussion of school choice, in which he argues that much of the potential welfare improvement produced by market design could potentially be undone by confused decision making by participants, and that welfare could be improved if market designers did a better job of actively curating and organizing the choices offered.

He writes "Increasing the number of options increases the probability that families will be presented with the best school for them, but it does not mean they will see it."

Some of his recommendations suggest that market designers should get involved at all level of detail: e.g. easier to read fonts may increase fluency and allow more choices to be presented effectively.

Others of his recommendations seem to me to be further removed from the actual practice of school choice: e.g. "If we can remove any terrible schools from the set, choosers, even if they were picking randomly, would on average get better outcomes." Closing underperforming schools (e.g. by not admitting new students) is much more complicated than that.

I haven't finished reading the book yet (Eric pointed me first to the section on school choice), and I'm looking forward to it.  Choice architecture is certainly an important part of market design.

Market design in Tokyo

 Fuhito Kojima and Hiroaki Odahara report on some of the projects presently underway at the University of Tokyo Market Design Center (UTMD), which include matching for child care, for medical residencies, and for internal labor markets.

Kojima, F., Odahara, H. Toward market design in practice: a progress report. Japanese Economic Review, (2021). https://doi.org/10.1007/s42973-021-00103-w

Abstract: In recent years, many developments have been made in matching theory and its applications to market design. This paper surveys some selected topics from this research area and describe our own work. We also describe the newly established University of Tokyo Market Design Center (UTMD), which works as a vehicle for practical implementation.

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."

School choice in Latin America, in BBC News Mundo

 A news story with an unusually detailed account of school choice algorithms discusses some of the issues in Latin America, in Spanish, in BBC News Mundo. (Google translate does an adequate job...).  One of the issues discussed is that geographic priorities for schools give wealthier families an advantage, and perpetuate geographic segregation.

Qué es el Mecanismo de Boston y por qué expertos denuncian que hay segregación en las asignaciones de escuelas en América Latina  Analía Llorente  BBC News Mundo

[G translate: What is the Boston Mechanism and why experts denounce that there is segregation in school assignments in Latin America]

Some snippets:

"The Boston mechanism allows for a lot of parenting strategy and that means that it generates a lot of inequalities " [says] Paula Jaramillo, Associate Professor in Economics at the Universidad de los Andes in Colombia

...

"The criticism is against the Boston Mechanism because it continues to be applied, but it is also against the deferred acceptance method because it is generating segregation at the neighborhood level," says Caterina Calsamiglia, a leader in the investigation of these methods.

"The specialist refers to the fact that a student obtains more points for his proximity to the preferred school, therefore he has a greater chance of being admitted to it.

"This creates one of the main strategies is the moving neighborhood, decision can only carry out families with middle income to high, creating inequality."

...

"In many places in Latin America the selection method is not even regulated, and where it is, they are not very transparent with parents in communicating the methods.

"We know a lot about what is done by cities in the United States, in Europe, in Asia, we don't know so much about Latin America," says Paula Jaramillo.

...

"In conclusion, the experts believe that there is no magic method that can be applied uniformly in the countries of the region to avoid segregation and inequality in school selection.

"They agree that the deferred acceptance method is the "fairest" but not perfect. There are many factors to take into account from the quality of the schools to their location."

Market design (I talk to the entering Ph.D. class at Escola Nacional de Administração Pública)

 Yesterday I gave what I think was the first lecture to the entering class of Ph.D. students at the Escola Nacional de Administração Pública (ENAP) in Brasilia.  I spoke about market design, using as my main examples school choice and kidney exchange.  Afterwards there was Q&A on a variety of subjects, including black markets and repugnance.

Here's a video (I start to speak around minute 8):

A lottery for antibody treatment, with slots reserved for vulnerable patients

 It's always good to see a collaboration between physicians and economists on allocating scarce resources, and here's a case report of allocating monoclonal antibodies in Boston (with some resemblance to school choice), forthcoming in the journal CHEST.

A novel approach to equitable distribution of scarce therapeutics: institutional experience implementing a reserve system for allocation of Covid-19 monoclonal antibodies  Emily Rubin, MD JD MSHP, Scott L. Dryden-Peterson, MD, Sarah P. Hammond, MD, Inga Lennes, MD MBA MPH, Alyssa R. Letourneau, MD MPH, Parag Pathak, PhD, Tayfun Sonmez, PhD, M. Utku Ünver, PhD.

DOI: https://doi.org/10.1016/j.chest.2021.08.003, To appear in: CHEST

"Background. In fall 2020, the Food and Drug Administration issued emergency use authorization for monoclonal antibody therapies (mAbs) for outpatients with Covid-19.  The Commonwealth of Massachusetts issued guidance outlining the use of a reserve system with a lottery for allocation of mAbs in the event of scarcity that would prioritize socially vulnerable patients for 20% of the infusion slots. The Mass General Brigham (“MGB”) health system subsequently implemented such a reserve system.

"Research Question. Can a reserve system be successfully deployed in a large health system in a way that promotes equitable access to mAb therapy among socially vulnerable patients with Covid-19?

...

"Results: Notwithstanding multiple operational challenges, the reserve system for allocation of mAb therapy worked as intended to enhance the number of socially vulnerable patients who were offered and received mAb therapy. A significantly higher proportion of patients offered mAb therapy were socially vulnerable (27.0%) than would have been the case if the infusion appointments had been allocated using a pure lottery system without a vulnerable reserve (19.8%) and a significantly higher proportion of patient who received infusions were socially vulnerable (25.3%) than would have been the case if the infusion appointments had been allocated using a pure lottery system (17.6%)

...

"The reserve for vulnerable patients was a “soft” reserve, meaning that if there were not enough patients in either the high SVI or high incidence town categories to fill the vulnerable slots, those slots were allocated to patients who were next in line by overall lottery number. This was done in order to avoid unused capacity for a therapy that is time sensitive and requires significant infrastructure to provide. Once the lottery had been run, dedicated, primarily multilingual clinicians who had been trained to discuss the therapies with patients called patients to verify eligibility and engage in a shared-decision making conversation to determine whether the patient would like to receive an infusion.

Early experience with running the lottery prior to patient engagement revealed that a large number of patients declined the therapy once offered, were deemed ineligible once contacted, or wished to discuss the therapy with a trusted clinician. The process subsequently was changed to allow clinicians to enter referrals for their own patients once they established patient interest (“manual referrals”). 

...

"All of the 274 patients who were guaranteed slots and 206 of 368 patients on the wait list were called, for a total of 480 patients called. The number of wait list patients called on a given day was a function of both how many of the guaranteed slots were not filled and how much capacity there was in the system to make phone calls on any given day. Of those patients who were called, 132 (27.5%) declined, 33 (6.9%) were deemed ineligible by virtue of being asymptomatic, 19 (4.0%) were deemed ineligible by virtue of having severe symptoms, 11 (2.3%) had been or were planning to be infused elsewhere, 61 (12.7%) could not be reached, and 191 were infused (39.8% of those called and 9.7% of total referred patients).

...

"Had we operated a pure lottery with no reserve for socially vulnerable patients, and all other factors had remained constant, 19.8% of patients offered therapy (88) would have been in the top SVI quartile as opposed to 27.0% (120) in our actual population, and 17.6% of infused patients (32) would have been in the top SVI quartile as opposed to 25.3% (46) in our actual population.

...

"The system we describe is to our knowledge the first instance of a reserve system being used to allocate scarce resources at the individual level during a pandemic.

"A reserve system with lottery for tiebreaking within categories can be straightforward to operate if there are few or no steps between the assignment of lottery spots and the distribution of the good. This could be true, for example, of allocation of antiviral medications to inpatients with Covid-19. In the case of monoclonal antibody therapies, there were multiple factors that could and often did interrupt the trajectory between allocation and distribution. These included the complexity of administering infusion therapy, the time sensitive nature of the therapy, the relative paucity of evidence for the therapy at the time the mAb program started, and the dynamic nature of Covid-19. The conversations with patients about a therapy that held promise but did not yet have strong evidence to support its efficacy and had not been formally FDA approved were often challenging and time consuming. Many patients identified for allocation were difficult or impossible to reach. Others declined therapy once it was offered and discussed, or had become either too well or too sick to be candidates for the therapy once they were reached.

...

"Notwithstanding significant challenges, the reserve system implemented in our health system for allocation of mAb therapy worked as intended to enhance the number of socially vulnerable patients who were offered the therapy. A significantly higher proportion of socially vulnerable patients were offered mAb therapy than would have been if the infusion appointments had been allocated using a pure lottery system without a vulnerable reserve. The intended enhancement of the pool of vulnerable patients who actually received monoclonal antibody therapy was counterbalanced to some extent by the disproportionate number of vulnerable patients who declined therapy, but even fewer socially vulnerable patients would have received the therapy if the lottery system had not included a vulnerable reserve. 

Course allocation at the Technical University of Munich, by Martin Bichler and Soeren Merting

 Here's a paper describing a recently designed and implemented course assignment system at the Technical University of Munich:

Randomized Scheduling Mechanisms: Assigning Course Seats in a Fair and Efficient Way  by Martin Bichler and Soeren Merting

Abstract: Course assignment is a very widespread problem in education and beyond. Typically, students have preferences for bundles of course seats or course schedules over the week, but courses have limited capacity. This is an interesting and frequent application of distributed scheduling, where payments cannot be used to implement the efficient allocation. First-Come First-Served (FCFS) is simple and the most widely used assignment rule in practice, but it leads to inefficient outcomes and envy in the allocation. It was recently shown that randomized economic mechanisms that do not require monetary transfers can have attractive economic and computational properties, which were considered incompatible for deterministic alternatives. We use a mixed-methods design including field and laboratory experiments, a survey, and simulations to analyze such randomized mechanisms empirically. Implementing randomized scheduling in the field also required us to develop a solution to a new preference elicitation problem that is central to these mechanisms. The results of our empirical work shed light on the advantages that randomized scheduling mechanisms have over FCFS in the field, but also on the challenges. The resulting course assignment system was adopted permanently and is now used to solve course assignment problems with more than 1700 students every year.

Market design, redesigned (in startups and university labs)

Market design is evolving, and new ways of organizing it are being explored. 

In my post yesterday, I talked about the early work on school choice that Atila Abdulkadiroglu, Parag Pathak, Tayfun Sonmez and I did under the auspices of Boston schools Superintendent Tom Payzant. The market design by economists in Boston, as with the earlier successful effort in New York City, was conducted as part of our research work as professors.  Not a penny changed hands, and we all felt good about that.

But if there was a flaw in that working arrangement, it was that no contracts were signed, and so as staff turnover took place in school districts, and the individuals we had dealt with departed, the district's institutional memory eroded, and they didn't always remember to turn to us when difficulties arose that we could have helped them with. Partly to address that, and to have at least one person able to devote time to approaching school districts, Parag and Atila and I supported Neil Dorosin in founding the non-profit  Institute for Innovation in Public School Choice, which during its lifetime helped school choice in a number of American cities, including Denver, New Orleans, and Washington D.C.

Parag and Atila went on to be founding members of MIT's School Effectiveness and Inequality Intiative, which just this week was "relaunched" with a different team as MIT Blueprint Labs, which aims to build on MIT's strengths not just in school choice but in a much wider area of market design and policy analysis, and to be a lab with a large staff and extensive fundraising:

Launch announcement of MIT Blueprint Labs

Featuring

Professor Parag Pathak Faculty Director MIT SEII / Blueprint Labs Research spotlight: K-12 education

Professor Joshua Angrist Faculty Director MIT SEII / Blueprint Labs Research spotlight: Higher education and the workforce

Professor Nikhil Agarwal Faculty Director, Health Care MIT SEII / Blueprint Labs Research spotlight: Health care

Eryn Heying Executive Director MIT SEII / Blueprint Labs

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Update: and here's the Blueprint Labs new (announced Aug. 11) website: https://blueprintlabs.mit.edu/

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In a related development, Parag has cofounded a new for-profit Ed-tech startup called Avela, that plans to spread the technologies he's helped pioneer.  A for-profit firm has some funding, employment and investing opportunities that aren't available to non-profits or university labs, let alone to teams of professors organized informally. And as in the Blueprint Lab, they hope that the tools they will develop will be readily applicable to quite a broad range of matching markets and market designs.

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These various efforts look to me like design experiments themselves, in the search for sustainable ways of making market design a permanent part of not only the research that economists do, but of the practical effects we hope to foster.

Observing all this from the West Coast, and over several decades, I can't help noticing that these institutional changes have been accompanied by team changes, and shifting collaborations among market designers.  

There are also a growing number of different kinds of economists (and computer scientists, operations researchers and businesses) involved in designing and assessing markets, and market design has not only changed markets, but changed the way economists work, in many small and large ways.  Econometricians and development economists have led the way in organizing large labs, and market design may be heading in that direction as well. Big and small tech firms have also started to think of market design as among their core competencies, and as a discipline they should be hiring.

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Here in California, I'd be remiss if I didn't mention that my colleague Paul Milgrom has for a long time engaged in auction design through his for-profit company Auctionomics.

And Susan Athey is the faculty director of a big lab at Stanford using different technologies in other areas of market design:  the Golub Capital Social Impact Lab, which describes itself this way:

"We use digital technology and social science research to improve the effectiveness of leading social sector organizations.

"Based out of Stanford GSB, the lab is a research initiative of affiliated academics and staff, as well as researchers and students, who are passionate about conducting research that guides and improves the process of innovation.

"Research Approach

We collaborate with a wide range of organizations, from large firms to smaller startups, for-profits to nonprofits, and NGOs to governments, to conduct research. Then, we apply and disseminate our insights to achieve social impact at large scale."

Tom Payzant, Boston schools superintendent who reformed school choice, dies at 80

 Tom Payzant played a critical role in transforming Boston's school choice from an immediate acceptance algorithm that exposed students and families to complex strategic risk when navigating the system, to a deferred acceptance algorithm that simplified their participation. As Superintendent of Boston Public Schools, Tom came to understand those issues well, and acted on them.

Here's his obit in the Boston Globe.

Thomas Payzant, whose education vision lifted Boston’s schools, dies at 80, By Bryan Marquard

and here's the statement from Boston Public Schools:

SUPERINTENDENT'S STATEMENT ON THE PASSING OF TOM PAYZANT

Here's a pic I took of Atila Abdulkadiroglu, Parag Pathak, and Tayfun Sonmez when we met with Payzant and his colleagues at Boston Public School headquarters, during the years we worked with BPS, starting around 2003.

Atila Abdulkadiroglu, Parag Pathak and Tayfun Sonmez at Boston Public School headquarters

Here's a paper that came out of those meetings, describing the deliberations that ultimately led BPS to adopt a deferred acceptance algorithm design for it's school choice system.

• Abdulkadiroglu, Atila, Parag A. Pathak, Alvin E. Roth, and Tayfun Sonmez, The Boston Public School Match," American Economic Review, Papers and Proceedings, 95,2, May, 2005, 368-371.

Over the course of those years, I was privileged to watch Parag evolve from a super smart young grad student to being a leader in the design of school choice.

I'll post tomorrow about some of Parag's latest efforts to bring the work associated with the design and evaluation of school choice, and market design more generally, into the world of startup companies and big university labs.