Why did books replace scrolls? Random access and the market for texts

Why did books replace scrolls?

That is, why did the modern form of the book, the codex, with pages bound together on a spine, replace pages sewn together and rolled up in a scroll? (Today, the term codex is mostly used for old, hand-written books that predate the printing press.)

It isn't that scrolls are no longer produced. Every week in synagogues around the world, as a new portion of the Torah is read , the parchment scroll is advanced, from right to left, until it is time to start the annual cycle again.

But if you want to browse, you don't use the scroll, you look in a book. It's easier to flip back and forth in a book, to compare passages, to read ahead and find out what is coming, to look back and remember what came before, to share with another reader who may be at a different place. In computerese, books (in codex form) are random access devices, while scrolls are sequential access machines.

And, except for the Torah, there basically aren't any more scrolls. Books have completely replaced scrolls, since books are so much easier to use.

Technologies like the printing press also made it cheap to produce texts as books, but if we didn't find books superior, it would still be possible to buy versions of your favorite novels or math texts (or dictionaries!) in scroll form. While a kosher Torah scroll to be used in public prayer in a synagogue is hand written by a scribe, there are printed Torah scrolls for non-ritual use: the technology for attaching single-sided printed pages together in a scroll isn't any obstacle. (Remember how early computer printers used to work on a continuous stream of accordian-folded paper?)

Search, which is easier in books than in scrolls, is even easier in digital texts such as we find online: e.g. here you can search not only the Five Books whose contents make up the Torah scroll, but the entire Hebrew Bible (and here is a link to the weekly portion).

So computers and the internet and the Kindle and other ways to handle texts electronically are just the latest chapters in the ancient, ongoing story of the market for texts.

(I'm not an early adopter myself, but here's a review of the new Kindle from yesterday's Washington Post that makes it sound as if, after maybe a little more progress on the electronic front, trees may soon be able to start sleeping at least a little easier.)

Your grandchildren's houses may not have bookshelves.

Liver Transplant for Jobs in Tennessee

The title of this post doesn't mean that people are donating organs in return for work, but that Apple's founder Steve Jobs has received a liver transplant. In Tennessee.

This reveals something about the regionalized waiting system for deceased donor organs in the United States, picked up in a WSJ article by Laura Meckler: Jobs's Transplant Highlights Differing Wait Times

"Apple Inc. CEO Steve Jobs's decision to travel to Tennessee for a liver highlights the significant disparities in transplant waiting times across the country -- the source of a longstanding controversy over the fairest way to distribute scarce organs.
For liver transplants, the wait is particularly agonizing. Kidney replacements can often be put off for years through dialysis, where a machine does the work of the kidneys. But there is no such treatment for liver disease.
There are 15,771 Americans waiting for a liver today, according to the United Network for Organ Sharing. Last year, 1,481 people died awaiting a donor.
Faced with a sometimes years-long wait, patients typically have only a few options. They can wait their turn at a home-state transplant center, knowing that their chances will improve as they get sicker; look for a friend or family member willing to undergo major surgery to contribute half of his or her liver; or seek out a hospital where the waiting times are typically shorter.
Those who travel out of state must be evaluated at the new hospital, but there is no prohibition to being on the wait list at more than one transplant center. UNOS doesn't keep statistics on how many people choose to travel out of state."
The story, incidentally, seems to be something of a scoop for the WSJ. Other newspapers are reporting the story on an "as reported in the WSJ" basis (apparently the transplant was two months ago). E.g. here is the Washington Post: Jobs, on Leave From Apple, Reportedly Had Liver Transplant

Update (6/23/09): Memphis Hospital Says It Did Jobs’s Liver Surgery.
"Methodist University Hospital in Memphis acknowledged Tuesday that it had performed a liver transplant on Steven P. Jobs, the chief executive of Apple."
...
"Methodist has one of the shortest waiting times of any liver transplant center in the country, according to a transplant registry operated by the Arbor Research Collaborative for Health and the University of Michigan."
...
"A scoring system, known as a MELD score, determines where a patient ranks on a transplant waiting list. The higher the score, the sicker a patient is and the higher the ranking. Any ties are decided by who has had that score the longest.
In its statement, Methodist said that Mr. Jobs had received a liver transplant because he was the patient of his blood type with the highest MELD score and thus “the sickest patient on the waiting list at the time a donor organ became available.” "

Further update (6/24/09): A CNN story discusses the regional allocation system, and how it favors those who are healthy and wealthy enough to be on waiting lists at multiple places around the country, under the provocative headline: Did Steve Jobs' money buy him a faster liver transplant?

Political pressure in Illinois college admissions

At the University of Illinois, politically connected applicants sometimes gained admission over the protests of admissions staff. Here are some stories (the first from InsideHigherEd.com, reporting on the second two from the Chicago Trib, and the last two on the fallout):
Blago-Style Admissions
Clout goes to college
U. of I. admissions: How politicians pressured university to admit students
Governor Appoints Panel to Investigate U. of Illinois Admissions
Federal Investigators Subpoena Admissions Records at 3 Illinois Universities

College admissions is serious stuff in Illinois. (Or, to put it another way, state politics includes everything.)

Update: the Chicago Trib has kept following the story, and now has quite a collection of articles: Clout goes to college.
Further update (7/13/09) from the Chronicle: Backlash Over U. of Illinois 'Clout' Scandal Spreads to Trustees and News Media
(8/3/09): The chairman of the Board of Trustees at the University of Illinois resigned on Monday amid increasingly incendiary accusations that he encouraged an academic version of “pay to play” politics to flourish, allowing students to be admitted based largely on personal and political connections.

Computer assisted markets

I'm giving a brief talk today on Computer Assisted Markets at the HBS Digital Economy Symposium. I plan to talk about how some of the markets I've helped design are part of the digital economy (whatever that is), at least in the sense that they are operated by computers.

I'm thinking here of labor market clearinghouses for doctors, kidney exchange, and school choice mechanisms, as well as the American Economic Association's newish coordination mechanisms for the economics job market, namely early market signaling, and a late market scramble.

I enumerate this list to emphasize that these markets use computers in a variety of different ways. The slide with which I'll begin my talk lists some of these, in increasing order of how "intensely" the market is computationally assisted:

–Markets can be run on computers (making transaction rules very well specified, and performing market operations very quickly, avoiding congestion.)
– Markets can be accessed over the internet (reducing transaction costs and increasing market thickness and scope.)
–Markets can use computers as trusted intermediaries (allowing confidential information to be entered and handled and transmitted in a trustworthy way.)
–Market outcomes can be determined by (computationally intensive) algorithms (e.g. integer programs to find optimal kidney exchanges that couldn't be found any other way).

Some markets make essential use of only some of these forms of computational assistance, and some use them all.

Here is my full set of slides: Computer Assisted Markets.pptx

Retail market for gold

You may not have thought that we were missing gold-dispensing vending machines, but we're about to find out, the NY Times reports.

"If gold is the ultimate sanctuary for small investors who have taken furious flight to quality, then Thomas Geissler may have invented the ultimate vending machine.
"After creating an online platform for trading precious metals this year, his small company has hit on a frontier beyond the Internet: the seemingly endless line of devices at airports and train stations that spit out cigarettes, condoms, toothpaste and candy bars in exchange for a little cash. But his machines will allow customers to buy small chunks of gold."

Of course, there are some special market design problems to address:
"The machines will be tested with explosives to make sure they are resistant to theft, Mr. Geissler said."

HT: Scott Kominers and Andrea Hawksley

Queuing to tee up at the Bethpage State Park Black Course

The USGA 2009 US Open golf tournament begins tomorrow, June 18. The host golf course is the Bethpage State Park Black Course. You have to be pretty skilled to qualify ("Entries are open to professional golfers and amateur golfers with an up-to-date men’s Handicap Index® not exceeding 1.4 under the USGA Handicap System™. ")

But if you just want the experience of playing on the same course as the top pros, the Black is a public golf course. You could just sign up for a tee time. Or could you? It turns out not to be quite so easy.

Just as markets can unravel, so can queues. A reliable symptom is people waiting on line overnight, especially if they have to wait for more than one night. Getting a tee time at this particular famous public (i.e. not rationed by price) golf course on Long Island seems to qualify: Parking All Night at Bethpage, Hoping to Drive. Note the well developed rules for regulating the queue, which include a rule meant to prevent the substitution of capital for leisure.

"Bethpage has five public golf courses: Black, Red, Blue, Yellow and Green. But the bulk of tee times for the courses, particularly the famed Black, can be hard to get through the phone-reservation system, which has 70,000 registered users. At least one company floods the system each night with hired callers, then resells the times as part of golf packages.
Yet there is one way to ensure a time at Bethpage Black, a major-championship course with $50 fees during the week, $60 on weekends, and double that for non-New Yorkers: get to the parking lot and spend a night. Maybe two. Maybe more."
...
"A sign there explains the complex rules of the “Walk Up Car Line.” Most important is that someone must be at the car for part of every hour. For the Envoy, on this Saturday afternoon, that person was Steve Atieh, 25, from Basking Ridge, N.J., who planned to play the Black course with two brothers and a friend.
They teed off 39 hours after arriving, about 11 hours after their car battery died while the radio broadcast a Yankees game."
...
"Steve Tomasheski was sitting in space No. 3 when someone offered $1,000 for it. He declined, afraid to disappoint his playing partners. Please do not tell his wife."
...
"At 7 p.m., Michael Azzue, an assistant supervisor at Bethpage, arrived in a cart. “Who’s No. 1?” he said, shouting. Azzue attached a plastic bracelet around Atieh’s wrist. At least one person from every car must be present when a supervisor arrives between 6 and 9 p.m. That person must be one of the golfers the next morning, to prevent hiring a nongolfer to do the waiting, which used to happen."

Apparently it is repugnant to pay someone to wait in line for you, although the story suggests that there is some demand for this, and people who arrive a little late (and before the monitoring kicks in) sometimes buy places from early arrivals.

Endnote: "Success has many fathers...", here's a story on a dispute about who really deserves the credit for designing the course. (Credit is a subject worth a discussion in its own right. In my experience, success in complex design projects often does have many fathers, with lots of people contributing in critical ways.)

Michael Sandel on Markets and Morals

My Harvard colleague, the political scientist Michael Sandel, lectures on the BBC on Markets and Morals The Reith Lectures. Here is the transcript: MARKETS & MORALS LECTURE TRANSCRIPT (I don't know how long the BBC will keep these links live...).

Sandel begins by noting that he thinks that Economics is "a spurious science."

"It’s a spurious science in so far as it is used to tell us what we ought to do because questions of what we ought to do in politics or as a society are unavoidably moral and political, not merely economic questions, and so they require democratic debate about fundamental values. Economists can inform us about possible implications of policy choices, but they can’t tell us - and they don’t really claim to tell us - what’s right and wrong, what’s just and unjust. "

The gist of his argument is here:

"Looking back over three decades of market triumphalism, the most fateful change was not an increase in the incidence of greed. It was the expansion of markets and of market values into spheres of life traditionally governed by non-market norms. We’ve seen, for example, the proliferation of for profit schools, hospitals and prisons; the outsourcing of war to private military contractors. We’ve seen the eclipse of public police forces by private security firms, especially in the US and the UK where the number of private guards is more than twice the number of public police officers. Or consider the aggressive marketing of prescription drugs to consumers in the United States. If you’ve ever seen the television commercials in America on the evening news, you could be forgiven for thinking that the greatest health crisis in the world is not malaria or river blindness or sleeping sickness, but a rampant epidemic of erectile dysfunction. (LAUGHTER) Or consider some recent proposals to use market incentives to solve social problems. Some New York City schools are trying to improve academic performance by paying children 50 dollars if they get good scores on standardised tests. In Dallas, they’re trying to encourage reading by paying children 2 dollars for each book they read.
Or consider the vexed issue of immigration policy. Gary Becker, the Nobel Prize winning free market economist at the University of Chicago, has a solution: to resolve the contentious debate over whom to admit, the US, he says, should simply set a price and sell American citizenship for 50,000 dollars, or perhaps 100,000. Immigrants willing to pay a large entrance fee, Becker reasons, would automatically have desirable characteristics. (LAUGHTER) They are likely to be young, skilled, ambitious, hardworking; and, better still, unlikely to make use of welfare or unemployment benefits. (LAUGHTER) Becker also suggests that charging admission would make it easier to decide which refugees to accept - namely those sufficiently motivated to pay the price. Now you might say that asking a refugee fleeing persecution to hand over 50,000 dollars is callous. So consider another market proposal to solve the refugee problem, one that doesn’t make the refugees themselves pay out of their own pockets. An American law professor proposed the following: that an international body assign each country a yearly refugee quota based on national wealth. Then let nations buy and sell these obligations among themselves. So, for example, if Japan is allocated 20,000 refugees per year but doesn’t want to take them, it could pay Poland or Uganda to take them in. According to standard market logic, everyone benefits: Poland or Uganda gains a new source of national income; Japan meets its refugee obligations by outsourcing them; and more refugees are rescued than would otherwise find asylum. What could be better?
There is something distasteful about a market in refugees, even if it’s for their own good, but what exactly is objectionable about it? It has something to do with the fact that a market in refugees changes our view of who refugees are and how they should be treated. It encourages the participants - the buyers, the sellers and also those whose asylum is being haggled over - to think of refugees as burdens to be unloaded or as revenue sources rather than as human beings in peril. What this worry shows is that markets are not mere mechanisms. They embody certain norms. They presuppose, and also promote, certain ways of valuing the goods being exchanged. Economists often assume that markets are inert, that they do not touch or taint the goods they regulate. But this is a mistake. Markets leave their mark. Often market incentives erode or crowd out non-market incentives. "

He then speaks briefly about Gneezy and Rustichini on childcare late fines (Gneezy, U., and A. Rustichini “A Fine is a Price,” Journal of Legal Studies, vol. XXIX, 1, part 1, 2000, 1-18.), about Titmuss on paid versus unpaid blood banks, and on his own reservations about tradeable pollution permits. He sums this up as follows:

"My general point is this. Some of the good things in life are corrupted or degraded if turned into commodities, so to decide when to use markets, it’s not enough to think about efficiency; we have also to decide how to value the goods in question. Health, education, national defence, criminal justice, environmental protection and so on - these are moral and political questions, not merely economic ones. To decide them democratically, we have to debate case by case the moral meaning of these goods in the proper way of valuing. This is the debate we didn’t have during the age of market triumphalism. As a result, without quite realising it, without ever deciding to do so, we drifted from having a market economy to being a market society. The hope for moral and civic renewal depends on having that debate now. It is not a debate that is likely to produce quick or easy agreement. To argue about the right way of valuing goods is to bring moral and even spiritual questions into public discourse. Is it possible to bring moral and religious disagreements into public life without descending into intolerance and coercion? That is the question I’ll turn to in the next lecture. Thank you very much."

Update: In his second lecture, Morality in Politics, Sandel discusses why he thinks paying surrogate mothers is a bad idea (apparently in Britain it is illegal, and so there's a thriving market in which British couples hire surrogate mothers in India). He also discusses arguments for and against same sex marriage. Here is the Programme transcript of the second lecture from the BBC.

HT: Tim Harford

Children can't get organ donations in Japan, because they can't be deceased donors

Even organ donation can be regarded as repugnant.
CNN reports on a Boy not allowed to get life-saving transplant in Japan.

""We were told by his doctor at the end of last year that the heart transplant operation was the only way for him to survive," Ando said.
But the law in Japan prohibits anyone under the age of 15 from donating organs -- meaning Hiroki can't get a new heart in his home country.
According to the web site for Japan Transplant Network, a non-governmental group that supports changing Japan's transplant law, "this stipulation has greatly reduced the possibility of transplants to small children; heart transplants to small children have become impossible."
Lawmaker Taro Kono is spearheading efforts to change the law, which was enacted in 1997. Japan's parliament is now debating four proposed amendments-- including one that would scrap the age limit. "

It appears that the thought of a child dying and having his or her organs transplanted is so distressing that it's against the law; it's considered a repugnant transaction. But because small children can't receive adult hearts, which are too big, this repugnance leads to the deaths of other children.

The boy in question still has a chance:

"Hiroki is now at Columbia University Medical Center in New York, awaiting a new heart. His father says he knows that the transplant issue is a difficult one for families.
"The honest wish from the recipient's side is to have a donor show up as soon as possible," he said, pausing. "I still do not know whether I can make a decision to give my child's heart to someone else if I am faced with such a situation. But unless the people face the issue and think about it seriously, I do not think the time will come soon to see more people volunteering to donate organs."

That last quote is worth re-reading, as it captures a lot of the pathos on both sides of the transplantation transaction, in which one tragic death can sometimes save other lives.

If you aren't already registered as a deceased organ donor (i.e. as someone who is willing to have your organs donated if they can be used after your death), please think about registering now. If you live in the United States, you can often find the form on the website of your State Department of Motor Vehicles, since registration as an organ donor is often done when you get your driver's license.

Education for matching

David Brooks reflects on what to tell high school graduates, and he thinks about skills we don't teach for making matches: Advice for High School Graduates.

"The most important decision any of us make is who we marry. Yet there are no courses on how to choose a spouse. There’s no graduate department in spouse selection studies. Institutions of higher learning devote more resources to semiotics than love.
The most important talent any person can possess is the ability to make and keep friends. And yet here too there is no curriculum for this."

In addition to thinking about how to educate young people how to navigate these life skills better, we can also think about how to design institutions to better facilitate them. Many high school graduates will find they have no problem making friends and even identifying potential mates while they are in college, where the market is thick. Once they disperse to the work force, both of those things may become harder, as the opportunities become less thick. Many of our customs and institutions related to marriage arose when more people married their high school and college sweethearts.

"Yield" in college admissions

The Chronicle of Higher Education has a thoughtful article: What Yield Says About a College:

"As usual, some colleges had to do much more than others to fill their classes, a fact that complicates interpretations of yield.
For instance, two colleges may have ended up with identical yield rates. College A did not admit a single applicant early, but College B enrolled a third of its class through early decision, which guarantees a yield of virtually 100 percent for students in that pool.
“Any meaning that yield ever had is now gone, because the number can be manipulated,” says Daniel M. Lundquist, vice president for marketing and enrollment management at the Sage Colleges, in New York. “It’s a circus, and colleges all do admissions differently.”
How many applicants did a college have? How many did it admit? Did it use a waiting list? How big was its tuition-discount rate? And did its football team win the conference title last year?
The answers to such questions are necessary to put yield in context. Some universities, such as large flagships in the Midwest, have high yields because they face relatively little competition for students.
Other colleges see their yield rates drop as their appeal rises and they become more competitive with higher-ranked institutions. Take Dickinson College, whose yield was 26 percent this year, much lower than some of its highly selective competitors. “We could have a higher yield if we competed against lower-tier institutions,” says Robert J. Massa, vice president for enrollment and college relations. “I would rather have a lower yield and compete against top-tier institutions.”

"In some circles, yield is entangled with measures of prestige. U.S. News & World Report once factored yield rates into its rankings of colleges, but it stopped doing so in 2004 amid the debate over the growth of early decision. The magazine now publishes a list of the “most popular colleges,” based solely on yield rates. In the most recent list, Harvard was first, followed by Brigham Young University and the University of Nebraska at Lincoln."

The Economic Logic of Anonymity and Pseudonymity

My previous post talks about my recent NBER working paper with Muriel Niederle and Utku Unver. Earlier this week I received an email that this paper was featured on another blog, Economic Logic. The email was signed "Economic Logician." And when I looked carefully at the blog itself (which I had read before; it's one of the economics blogs I have on my bookmark list), I couldn't find any identifying information about the blogger, even after clicking on the links through which blog owners often identify themselves.

So I replied to the email asking "Are you blogging anonymously, incidentally? (May I ask why?)"

I received the following reply: "Yes, I remain anonymous. This allows me more liberty in my writing, and I hope the blog will gather reputation on its own merit, instead of being attached to a name."

This got me thinking about the market design aspects of anonymity , and its not so close relative pseudonymity. When I asked EL about his/her anonymity, I was referring of course to the fact that I don't know who he/she is, what his/her day job is, which personal pronoun is appropriate, etc. But when EL speaks of the blog developing a reputation, he/she is referring to the fact that the posts are under the repeated-use pseudonym Economic Logician (with respect to which the name of the blog is an eponym), so that each post can both rely on and help establish the reputation of the same unidentified/pseudonymous person who wrote the previous posts.

Lots of internet markeplaces allow pseudonymous usernames, and still manage to foster reputation building and trust. (In an earlier post I wrote about the redesign of eBay's reputation system from one in which feedback could only be identified or pseudonymous to one in which it can also be anonymous: "ENGINEERING TRUST - RECIPROCITY IN THE PRODUCTION OF REPUTATION INFORMATION," - by Gary Bolton, Ben Greiner, and Axel Ockenfels. ) That paper notes how being able to identify who left feedback led to reciprocal feedback, either jointly positive or jointly negative, which reduced the informativeness of certain kinds of feedback.

There are other contexts in which anonymity is encouraged or allowed (and not just in comments to blogs). The refereeing of academic papers for publication is an example in which we seem to believe that the benefits (increased frankness) of anonymity may overcome the costs (e.g. an increase in self-serving reviews).

Some journals have double-blind refereeing, in which the authors as well as the referees may choose to remain anonymous during the review process (e.g. by deleting their names from the cover sheet, and also not posting the paper where Google can find it). Google now essentially prevents journals from enforcing anonymity on authors, since it gives authors a way to identify themselves if they wish, despite the requirement that their names and affiliations may not appear on the submitted paper. I think that preventing referees from knowing who the authors are would be a mixed blessing; it would level the playing field in certain desirable ways, but it might also remove information that would be valuable in evaluating the paper. (For example, if you read a paper saying that, on balance, the conclusions of Roth (1977) need to be revisited, it might be useful for you to know if Roth is one of the authors.)

Of course, marketplace rules may allow participants to be anonymous from some parties and not from others, and internet privacy rules are concerned with who can choose how individuals are identified. (See this nice take on the famous New Yorker cartoon about anonymity on the internet.)

So, anonymity has its uses, as does identity, and pseudonymity has some of the advantages and disadvantages of each. I'll keep blogging under my natural name for the time being, since, especially when my posts are unclear or incomplete, they may get some helpful context from the fact that they are linked to me and the work I do .

Unraveling

Many markets have trouble coordinating on the timing of transactions, and this has led to market failures in markets as diverse as the market for college football bowls, and the labor market for federal court clerks, and in various medical markets, such as (most recently) gastroenterologists and orthopaedic surgeons.

Why do transactions in some markets happen inefficiently early? Here are the concluding paragraphs from our recent NBER working paper Unraveling Results from Comparable Demand and Supply: An Experimental Investigation
by Muriel Niederle, Alvin E. Roth, M. Utku Unver - #15006 (LS)

" It has been known at least since Roth and Xing (1994) that many markets unravel, so that offers become progressively earlier as participants seek to make strategic use of the timing of transactions. It is clear that unraveling can have many causes, because markets are highly multidimensional and time is only one dimensional (and so transactions can only move in two directions in time, earlier or later). So there can be many different reasons that make it advantageous to make transactions earlier. There can also be strategic reasons to delay transactions; see e.g. Roth and Ockenfels (2002) on late bidding in internet auctions.
Thus the study of factors that promote unraveling is a large one, and a number of distinct causes have been identified in different markets or in theory, including instability of late outcomes (which gives blocking pairs an incentive to identify each other early), congestion of late markets (which makes it difficult to make transactions if they are left until too late), and the desire to mutually insure against late-resolving uncertainty. There has also been some study of market practices that may facilitate or impede the making of early offers, such as the rules and customs surrounding "exploding" offers, which expire if not accepted immediately.
In this paper we take a somewhat different tack, and consider conditions related to supply and demand that will tend to work against unraveling, or to facilitate it. There seems to be a widespread perception, in markets that have experienced it, that unraveling is sparked by a shortage of workers.
But for inefficient unraveling to occur, firms have to be willing to make early offers and workers have to be willing to accept them. Our experiment supports the hypothesis that a shortage of workers is not itself conducive to unraveling, since workers who know that they are in short supply need not hurry to accept offers by lower quality firms. Instead, in the model and in the experiment, it is comparable supply and demand that leads to unraveling, in which attention must be paid not only to the overall demand and supply, but to the supply and demand of workers and firms of the highest quality. This seems to reflect what we see in many unraveled markets, in which competition for the elite firms and workers is fierce, but the quality of workers may not be reliably revealed until after a good deal of hiring has already been completed."

http://papers.nber.org/papers/W15006

Postscript: Skip Sauer over at The Sports Economist has a post about a 9th grader offered a college football scholarship in what is becoming a seriously unraveled market.

The market for beauty queens

Beauty queens are marketed as prizewinners, but they are also employees, as the firing of Miss California makes clear: Donald Trump to Miss California: You're fired.

"Wednesday brought another breathtaking twist to the saga of Carrie Prejean, the now-former Miss California USA who got the ax from the pageant's boss Donald Trump ...for not honoring her pageant commitments.
Trump told TMZ.com that Prejean refused to appear at roughly 30 events to which she was contractually bound. ...

Pageant officials say Tami Farrell, first runner-up to Prejean, will take over those responsibilities. Which, to be honest, nobody really understands. But they sound very important."

Theft and armed robbery

Theft is such a threat to civilization that it made it into the ten commandments. As an opportunistic act it must be as old as property, but it probably didn't become a profession until after markets allowed the development of concentrated and transportable forms of wealth. Even so, theft as a profession, and its close cousin, armed robbery, must be at least as old as agriculture.

So for a very long time, at least for some kinds of items, part of marketplace design includes ways to thwart thieves, or catch them. But security is costly in many ways, not least being that if you make your marketplace hard for thieves to enter, you may also discourage customers. So losses from theft (and payment of theft insurance premia) are often a cost of doing business, leading to the occasional story that could be a movie: Well-dressed thief steals €6 million worth of Chopard jewels in Paris.

"Suspicion has fallen on the Pink Panthers, the name given to a diffuse international gang with origins in the Balkans. French police describe the group’s crimes as lightning-fast hold-ups: daring, but planned down to smallest detail.
In December thieves staged a €74 million jewel theft at the Harry Winston boutique in the Avenue Montaigne, near the Place Vendôme, off the Champs-Elysees. Four robbers, two disguised as women, calmly emptied the store as staff and customers lay on the floor.
The Harry Winston raid came a year after the same store was attacked by robbers who forced staff to empty its safes, taking at least €10 million worth of jewels.
The Pink Panthers have accumulated loot worth up to €200 million in an estimated 120 attacks on stores in around 20 countries since their first robbery in Mayfair in London in 2003.
Two weeks ago Paris police arrested two Serbians, alleged to be Panthers, and charged them with carrying out armed raids on stores in Monaco, Switzerland and Germany.
Last Thursday a former soldier from Montenegro, also said to be a Panther, was sentenced to 15 years in jail for a 2005 jewel robbery in the Riviera resort of Saint-Tropez. The court in Draguignan also fined Dusko Martinovic €130,000 for the raid, which he carried out in 90 seconds with two accomplices who have not been caught. The trio escaped into the Mediterranean aboard a speed boat before the police reached the boutique that they had emptied.
The world record for a jewellery theft remains the $100 million (£62 million) robbery of diamonds in Antwerp, Belgium, in 2003. "

While diamonds can presumably be resold easily, some items, like an iconic artwork or a thoroughbred race horse are too identifiable. But that doesn't always protect them from theft: sometimes thieves steal them and try to ransom them back to the original owners, and sometimes they may be destined to be enjoyed privately by wealthy criminals in distant places. Here's one list of The 10 Most Infamous Heists, some of them still unsolved.

Update: The Times of London reports on a modern form of theft: Criminal gang bought own music on iTunes and Amazon using stolen cards.
A gang of criminal musicians bought their own music online with stolen credit cards, and received royalties...

Market for wedding guests

Here's an unusual market for temporary workers:
Japanese company does thriving trade in 'fake friends'

"Along with choosing a dress and booking a honeymoon, there is one other item to add to the wedding checklist in Japan: hiring fake friends.
Office Agents, a Tokyo-based company, rents out friends, work colleagues and even relatives to pad out the guest list.
Brides or grooms who want to impress their prospective partners with their sheer volume of friends are among those secretly padding the guest list with fakes.
The recession has also boosted the popularity of the service. With unemployment rising and a growing number of Japanese in part time jobs, people rent fake bosses or colleagues."

Are paperless tickets scalp proof?

The latest development in the ongoing war between ticket originators, fans, and scalpers is the ticketless ticket.

"Ticketmaster is going to try issuing paperless tickets to reduce scalping. Resale companies are not amused.
http://marketplace.publicradio.org/display/web/2009/06/08/pm_ticketmaster/
"JILL BARSHAY: Miley Cyrus hopes she can cut out scalpers from her next tour by selling only paperless tickets. Ones you can't give or sell to someone else. Ones you buy online and pick up at the concert gate by showing your driver's license and a credit card.
Sean Pate is the spokesman for StubHub, the big ticket resale site, owned by eBay. He's predicting paperless tickets will mean long lines on concert night.
SEAN PATE: You know, we're going to see a lot of inconveniences for the fans, especially of Miley Cyrus's demographic. Her fans more than likely don't own credit cards.
That means mom or dad may have to listen to the concert too. Not to mention how mortifying it is for a 12-year-old to be seen with her parents.
Critics say some concerts will still sell out quickly. And prices will be jacked up. The question is by whom. Don Vaccaro is the CEO of TicketNetwork, another resale site. He points out that Miley Cyrus's management company, which is owned by Ticketmaster, is selling prime seats on its Web site starting tomorrow for $295."

Update: Here's the (June 16, 2009) take of the NY Times Ethicist column: Miley Cyrus Takes on the Scalpers.

HT: Steve Leider

Anesthesia was once repugnant

A wonderful story by Mike Jay in the Boston Globe, The day pain died , recounts how the first surgical use of anesthesia came long after its pain-killing properties were known. An impediment to its use, however, was the thought that pain relief was repugnant, i.e. there was something wrong in having a pain free operation.

Here is the beginning of Jay's story, and the end (emphasis added):
"The date of the first operation under anesthetic, Oct. 16, 1846, ranks among the most iconic in the history of medicine. It was the moment when Boston, and indeed the United States, first emerged as a world-class center of medical innovation. The room at the heart of Massachusetts General Hospital where the operation took place has been known ever since as the Ether Dome, and the word "anesthesia" itself was coined by the Boston physician and poet Oliver Wendell Holmes to denote the strange new state of suspended consciousness that the city's physicians had witnessed. The news from Boston swept around the world, and it was recognized within weeks as a moment that had changed medicine forever.
But what precisely was invented that day? Not a chemical - the mysterious substance used by William Morton, the local dentist who performed the procedure, turned out to be simply ether, a volatile solvent that had been in common use for decades. And not the idea of anesthesia - ether, and the anesthetic gas nitrous oxide, had both been thoroughly inhaled and explored. As far back as 1525, the Renaissance physician Paracelsus had recorded that it made chickens "fall asleep, but wake up again after some time without any bad effect," and that it "extinguishes pain" for the duration.
What the great moment in the Ether Dome really marked was something less tangible but far more significant: a huge cultural shift in the idea of pain. Operating under anesthetic would transform medicine, dramatically expanding the scope of what doctors were able to accomplish. What needed to change first wasn't the technology - that was long since established - but medicine's readiness to use it.
Before 1846, the vast majority of religious and medical opinion held that pain was inseparable from sensation in general, and thus from life itself. Though the idea of pain as necessary may seem primitive and brutal to us today, it lingers in certain corners of healthcare, such as obstetrics and childbirth, where epidurals and caesarean sections still carry the taint of moral opprobrium. In the early 19th century, doctors interested in the pain-relieving properties of ether and nitrous oxide were characterized as cranks and profiteers. The case against them was not merely practical, but moral: They were seen as seeking to exploit their patients' base and cowardly instincts. Furthermore, by whipping up the fear of operations, they were frightening others away from surgery and damaging public health.
The "eureka moment" of anesthesia, like the seemingly sudden arrival of many new technologies, was not so much a moment of discovery as a moment of recognition: a tipping point when society decided that old attitudes needed to be overthrown. It was a social revolution as much as a medical one: a crucial breakthrough not only for modern medicine, but for modernity itself. It required not simply new science, but a radical change in how we saw ourselves."
...
"Once Morton had successfully demonstrated his technique of ether anesthesia, it was quickly seen that its implications reached considerably beyond the dental business. Before 1846 was out, it had been successfully tried by the most celebrated surgeon in Britain, Robert Liston, who pronounced that the new "Yankee dodge" had "the most perfect and satisfactory results" and was "a fine thing for operating surgeons." It was enthusiastically championed by an emerging generation of medical humanitarians, and the new buzzword "anesthesia" crystallized the sense of novelty and medical miracle. Chemistry had, as Thomas Beddoes had prophesied, come to rule over pain.
Despite its successes, resistance to the idea didn't vanish overnight. Until the end of the century, some doctors would maintain that pain had a necessary role in the preservation of life, but from 1846 onward they were outnumbered by those who insisted that it was the job of a physician to inflict as little of it as possible. Some religious voices would hold out for a good deal longer: Pope Pius XII would confirm that "the Christian's duty of renunciation and of interior purification is not an obstacle to the use of anaesthetics" only in February 1957.
Despite the long resistance, that demonstration in the Ether Dome marked a transition that was as irreversible as it was historic. The practice of medicine finally achieved a goal that it had, until that moment, never truly been able to imagine: loosening pain's age-old stranglehold on humanity. And in a sense, the invention was the least of it. The real milestone witnessed in Boston that day was the moment when culture had finally caught up with chemistry."

The article comes from Jay's new book The Atmosphere of Heaven.

Update: Dubner at Freakonomics follows up on this post and draws some interesting comments, including this one:

“So discredited had narcotic drugs become by the middle of the seventeenth century that when Nicolas Bailly, a barber-surgeon of Troys, administered a narcotic potion to a patient before an operation, the venture aroused widespread condemnation. Bailly was arrested and fined for practicing witchcraft. The stupefaction of patients by administration of herbal remedies was then forbidden in France under heavy penalty.”
(Victor Robinson, M.D.: Victory Over Pain. A History of Anesthesia, London: Sigma, 1947. p.40)— kaloniki "

Matchmaking in Gaza, and Bollywood

Marriage is important everywhere, and matching and matchmaking seems to have a lot in common across disparate cultures, although the design of matching markets certainly have some local twists, including who the parties to the match are, e.g. the young couple themselves, or their parents:

Militant Hamas Gets Into Matchmaking Business
"The applicants, who pay a fee of $10-$70, are divided into categories according to their eligibility. Women under 25 are easiest to marry off; more challenging are women over 30 and divorcees.
But in a nod to Gaza's grinding poverty triumphing over its conservative culture, there is a special file for women with jobs. Bringing home a salary in Gaza can trump any other category, matchmakers say.
In the women's application, they describe their ideal man. Most ask for a devout Muslim with a job and his own apartment, a top find in crowded Gaza.
Women also must describe their appearance and answer a killer question: ''Do you consider yourself pretty according to Gaza standards?''
The ideal of beauty in Gaza means tall and fair-skinned with blue or green eyes and light-colored hair -- and that's what men usually ask for. But most Gaza women have dark hair and bronze skin.
''If we see a girl that appears to match (a man), but she's not physically what he wants, I'll call him and say, 'Well, she's pretty, but she's dark.' Or 'she's short, but she's white.' We encourage them to be a bit more realistic,'' Khalil said."
...
"Around 40 men a month turn to Tayseer in search of a wife. When association employees think there's a match, they quietly organize a meeting, with employees acting as chaperones in compliance with Islamic law. If the couple like each other, Gaza's traditional courtship kicks in.
The man's relatives visit the woman's family, saying that a well-meaning stranger told them of a girl wanting to marry. The matchmakers are not mentioned, because their role is still taboo, said Khalil."

Meanwhile, in another part of the world, there is a different challenge to a different tradition of arranged marriage (the photo of the prospective bride suggests some other differences between India and Gaza also):
Bollywood's Rakhi Sawant takes search for a husband to prime time TV
"Rakhi Sawant, a Bollywood dancer, actress and television host, has refused a union brokered by her parents. Instead, she has promised to find the perfect man herself — with the aid of a prime time TV series.
Rakhi Ka Swayamvar (Rakhi’s Search for a Husband) has attracted more than 12,500 aspirant grooms from across the subcontinent. The show is due to begin later this month but the outspoken celebrity’s promise to marry on air has already whipped up controversy in what remains a rigidly conservative country."
...
"A recent survey by the International Institute for Population Sciences found that 95 per cent of marriages in India today are arranged by the families of the bride and groom. More than 70 per cent of married women between the ages of 15 and 24 said that they were never asked their views on their future husband before their wedding. About a quarter said that their first sexual experience within marriage was forced."

Related recent posts:
Marriage and dating online in Korea, Marriage and dating online (in the U.S.), Marriage market in India

University admissions in the UK: admissions formulae

I recently wrote about University admissions in the UK , from the point of view of the centralized process by which applications are made, university decisions are communicated, and student responses are collected. Universities' admissions decisions are decentralized, however; each university makes its own. A story in the Times of London, with accompanying links to documents obtained through Britain's Freedom of Information Act, gives an unusually detailed look at how top universities are making those decisions: Top schools boycott ‘biased’ Durham--The leading university's entry system handicaps high performers.

The article discusses first Durham University, and then Cambridge and Oxford. Some controversy attaches to these universities' weighted ranking systems that now give extra points to students who come from low achieving schools.

Digital Economy Symposium at HBS

On June 19 there will be a symposium on the Digital Economy at HBS; the program is at the link.

The organizers are John Deighton, Karim Lakhani, and Misiek Piskorski.

I plan to talk about "Computationally Assisted Markets."

Fertility and religion

The Bible encourages reproduction, but puts bounds on sexuality, and so religious couples seeking treatment for infertility need to navigate carefully. For orthodox Jews, the Puah Institute (named after one of the two Hebrew midwives in the story of the birth of Moses) helps with this navigation. Here's a story about rabbinical supervision of medical fertility treatments involving in vitro fertilization: How to make a kosher baby.

Some of the particular issues that arise with in vitro fertilization involve how to be sure, in a legal sense, who the parents are. (This is presumably also one of the reasons behind the restriction of sex to marriage in so many cultures, when sex was the only reproductive option.)

The problem of how to integrate new technological and commercial possibilities with ancient customs, rules, and practices is very clear when those are religious in nature. But similar problems also present themselves in secular society, in dealing e.g. with issues like surrogacy, or compensation for sperm and egg donors in ways that navigate around repugnance.

In only slightly related news (but still on the subject of being fruitful, and making sure your children have the right parents), the cost of arranged marriages is going up among Israel's most orthodox Jews: Haredi matchmaking rates skyrocketing

Protecting the commons with 'altruistic punishment': scam baiting

Ernst Fehr and his students and colleagues have conducted a broad inquiry into the idea that many public goods may be maintained in part by a widely held motivation to punish transgressors, even when such punishment is costly. It's an idea that has engaged evolutionary psychologists and anthropologists as well, and has generated some controversy.

An example of altruistic punishment in practice is the internet sport of scam baiting: Baiting Nigerian scammers for fun (not so much for profit).
"When your hobby is baiting 419 scammers (also known as Nigerian scammers or advance-fee fraudsters), a death threat isn't cause for concern—it's a trophy worth bragging about to your friends.
Scam baiters are the vigilante enforcers who come together to waste hours, weeks, or months of 419 scammers' lives for nothing more than the satisfaction of knowing that they are distracting them from real victims. Though the world of 419 scams has existed since long before the Internet, people continue to fall for scammers in droves—certainly, scammers are making millions of dollars every year by promising money, goods, and romance that they never deliver on. That's part of why scam baiting has actually become a somewhat popular pastime online, with thousands of users flocking to scam baiting forums to share stories and ideas on how to string along more scammers. And hey, why not? Most of us end up spending too much time screwing around on the Internet anyway—these folks just use that time to make scammers miserable."

If you want to play (the next time you get an email offering to transfer millions of dollars to your account*), one of the central sites seems to be 419Eater.com.

*For those of you who never look in your junk mail folder, here's a good example from mine:
"Sir / Madam,
I am Barrister Adamu Azeez, an attorney to late Richard Lim a foreigner who is an Engineer with Nigerian National Petroleum Corporation (NNPC) here in Nigeria. Late Mr. Richard Lim has an account with United Bank for Africa Plc, Nigeria.
I received a memo early this year from the Bank Remittance Department for an interview about (US$25.500,000.00) (TWENTY FIVE MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS ONLY) that belongs to my client Late Mr. Richard Lim ,the bank informed me on their policy to freeze the account of Late Richard Lim, I am in a position to redirect the (US$25.500,000.00) to any foreigner's account any where because they was no Next of Kin in his entire file within the bank and his account has been dormant for years which is against the policy of the Bank.
I am contacting you because of the need to involve a foreigner as the foreign beneficiary to that fund and also to stand as the Next of Kin to the deceased. I have resolved to share the money in this ratio.
(1) 65% for me.
(2) 30% for you.
(3) 5% for the Remittance Manager in the bank who has agreed to guide us for the success of our objectives.
(4) 5% for any expenses both party might incur during the processing of this transaction.

I will need your full name and address including telephone and fax number for the internal processing of the fund transfer and the internal processing of the required documents to back you up for the claim of the fund in receipt of all the required information from you which was given above. I will give you further details on the entire process when I receive your positive response."

HT: jeff at Cheap Talk

Same sex marriage in New Hampshire

Once again, an ancient repugnance is annulled by legislators, not just judges: New Hampshire Legalizes Same-Sex Marriage .
"The New Hampshire legislature approved revisions to a same-sex marriage bill on Wednesday, and Gov. John Lynch promptly signed the legislation, making the state the sixth to let gay couples wed. "

Real estate brokers and the internet

Now that many houses for sale can be viewed on the internet, it is entirely possible to conduct a search for a house without the assistance of a real estate broker. But a peculiarity of the real estate market is that a buyer who does not use a broker may not reduce the fees paid in the transaction. A typical seller's contract with the broker who helps put the house on the market (the "originating broker") is for 6% of the selling price. If the buyer is accompanied by an agent, this fee is split between the two. If the buyer comes without an agent, the 6% is paid entirely to the originating broker.

An internet brokerage firm has seen this as an opportunity. Redfin.com offers to represent buyers and refund 50% of Redfin's half of the fee set by the originating broker and seller. So, if the fee is the conventional 6% of the sales price, Redfin as the buyer's broker would get 3% and refund 1.5%. That is, if you are on the verge of buying a house for a million dollars without a broker, but instead close the deal through Redfin, they will give you $15,000. That's not a bad reason to have an agent.

Obviously this is inefficient from the point of view of the buyer, seller, and originating broker (since if they could negotiate efficiently they could divide among themselves the 15K that Redfin keeps). But the final moments of the negotiations are tense ones, in which the reservation values of all three parties are unknown, so this may not be the kind of 3-way negotiations in which we should expect efficiency. So Redfin may have a good business.

I keep expecting the real estate market to undergo some fundamental change, and maybe this is a sign of pressure building.

HT: Michael Schwarz

p.s. for completeness, I note that Redfin also offers discounted sell-side services, part of which come with a fee that is not contingent on whether or not a sale results.

Market for bodyguards

A big cost of having full time bodyguards is overtime pay, particularly for those who travel a lot, or have an active nightlife. So, in an economy move, Scotland Yard is increasing the number of protection officers assigned to protect the British Royals, whose younger members apparently need several shifts: Royal protection unit boosted by 150 extra armed protection officers .
"Metropolitan Police protection officers for the Royal family, diplomats and politicians work up to 70 hours a week, particularly on foreign trips, and receive overtime payments of up to £30,000 a year.
A decision to boost the 400-strong team by up to 150 officers is the result of a review that has also raised questions about the costs of looking after junior members of the Royal family."

Market for poets

The market for poets is of course not the same as the market for poetry, and a recent NY Times article looks at how poets fit into academia, as professors of poetry: Poets, Academia: A Couplet in Conflict.
The article discusses the notion that poets might be expected to be more drunken and seductive than, say, critics. But in other respects, the intersection of poetry and academia is a lot like in many other fields, in which scholars not only do scholarship, but teach.

That being said, the balance between scholarship and teaching, like the balance between discovery and stewardship, and between the ivory tower and the open marketplace, is quite different in different disciplines. But, in each discipline, the various roles that universities play in our society involve finding such balances.

I can't tell how much the non-academic market for poets and poetry has been changed since the endowment in 2003 of the Poetry Foundation (what rhymes with a hundred million dollars?). But here's a 2006 article in the Globe: Poets, Inc., which notes about Poetry magazine that "The magazine's efforts to engage a broader audience seem to be working. When Wiman took over Poetry in October 2003, the magazine's circulation was 11,000. Today it stands at roughly 29,000."

One thing to admire about the poetry biz is that there's a technical term for a bad poet: poetaster (rhymes with "do it faster").

(Contest: what should be the equivalent word for a bad economist? Econo... misser? ...messer?)

Chicago parking: private metering, public/private enforcement

The City of Chicago recently sold the right to manage its parking meters for the next 75 years to a private company, for a payment of $1.15 billion. The city retains the right to make parking laws and enforce them, although some aspects of enforcement are now shared. Not surprisingly, there's some trouble in the Windy City: Long a Driver’s Curse, Chicago Parking Gets Worse .

Not only have meter rates gone up, enforcement seems to have become more aggressive. Aside from the fact that Chicago looks to parking fines for revenue in tough economic times, there appear to be market design reasons for this.

Here is the agreement between the city and the contractor. Section 3.2e on page 40 reveals that the contractor as well as the city may issue tickets to illegally parked cars at meters.

So now there are two motivations for issuing tickets; the city issues them to raise revenue from parking fines and to enforce the parking laws, and the contractor issues them to increase meter revenue by discouraging people from parking without paying or parking after the payment has expired.

The city can raise revenues from fines by aggressively enforcing laws, e.g. about how many inches you may park from the curb. The contractor can raise revenues by ticketing cars promptly after meters expire. (Both the city and the contractor have an interest in enforcing the laws that say you must park between the lines.)

Some problems with getting new meters (which accept credit cards) to work properly have compounded the angst.

What to do? Carry lots of quarters when you drive in Chicago, at least until things settle down.

Harvard's "Z-list," waitlist admission with a difference

Even Harvard gives favorable attention to legacies (children of alums), you are no doubt shocked to learn. But, right around this time of year, as offers are made off the waiting list, some of those alumni children, and others with certain special late-season Harvard offers, are being given a potentially hard choice: The Back Door to the Yard Z-list: A legacy-heavy special admissions program .

The Z list students are admitted after a year delay, on the unusual condition that they don't attend college anywhere else in the intervening year. The Crimson story (from several years ago) described the program, and found that it included a substantial proportion of legacy students. (emphasis added):

"This group of students, known within Byerly Hall as the “Z-list,” are plucked off the waitlist any time from May to August—after they have accepted offers of admission at other universities—and informed that if they are willing to take a year off, they can enroll at Harvard the following September.Harvard admissions officers say they choose to “Z” students—it’s a verb—when there is a consensus that the College cannot bear to reject them but there is simply no bed available for them immediately after they graduate high school.“There’s no formula to this and there’s not much in common [between Z-list students],” says Director of Admissions Marlyn McGrath Lewis ’70-’73. “It makes us feel we made some effort to get them here.”But if you talk to enough of these students whom the admissions office makes a special effort to bring to Cambridge, you’ll find they do have something in common: Their parents went to Harvard."
...
"Other top colleges have special admissions programs in which applicants are asked to take time off or enroll elsewhere and then transfer, but no other Ivy requires students to take a year off and gets them to come in such high proportions—a testament to the College’s perennial superiority in admissions.And if a year off makes students more mature and better able to contribute to the College, then the Z-list allows Harvard to placate powerful parents without diluting the quality of its class."
...
"“A very high percentage are alumni cases,” agrees Susan G. Case, a college counselor at Milton Academy, which in some years has sent Harvard a quarter of the Z-list all by itself. “There isn’t necessarily an academic pattern, but it’s usually institutional needs. That’s a phrase they use internally.”"

Legacy admissions in public schools

California leads the way again: here's some school choice news from LA. 'Legacy' admissions OK'd in public grade schools, Calif. weighs pros, cons of alumni preference policy.

"Emulating a controversial practice at many colleges, two high-achieving public school districts in California are giving preference to the children of alumni.

"The Beverly Hills Unified School District and the Santa Monica-Malibu Unified School District have adopted legacy admissions policies for children of former students who live outside their enrollment boundaries.
The policies appear to be the first in the nation at public schools, education observers say.
The programs vary slightly, but leaders of both districts say they hope to raise money by forging closer ties with alumni who may be priced out of their hometowns as well as with grandparents who still live there.
In each district, nonresident legacy students will make up a tiny percentage of the student population, officials said.
...
Many universities and colleges have long offered preferences to the children, grandchildren, and siblings of alumni, accepting them at greater rates than applicants overall, sometimes with lower grades and SAT scores.
Universities' arguments for legacy admissions - to nurture connections with alumni and their checkbooks - have been upheld as constitutional.
But the policies can cause campus controversy, leading some schools, including the University of California in 1998, to vote to abolish them.
...
Beverly Hills adopted its legacy policy on a 3-2 vote last spring, allowing the children of anyone who attended city schools at least four years and whose grandparents have lived in the city for at least a decade to apply for permits. Eleven students, among 5,100 enrolled in district schools, attend school under the program.
Fenton said he proposed the idea to reconnect the district with grandparents who live within its borders and no longer have a direct stake in the city's schools yet are asked to vote on school measures, such as a $334-million facilities bond passed in November."
...
"To round out classes and maximize state funding, the 12,000-student Santa Monica-Malibu district has long offered permits to the children of district, city, and community college employees, siblings of current students, and others who moved away.
After those, it also has given permits to some nonresident students without connections to the district.
But the board voted unanimously in April to give alumni children priority over this last category of students, starting next school year.
...
"Critics are skeptical.
"It would be more efficient from a fund-raising standpoint to auction off education slots on eBay than to create a legacy preference," said Michael Dannenberg, director of education policy at the nonpartisan New America Foundation."

Opposite of repugnance: Protected transactions

I've been thinking lately about transactions that are the opposite of repugnant, i.e. transactions that, as a society, we often seek to promote, for reasons other than efficiency or pure political expediency.

In yesterday's post I mentioned monogamous marriage between a man and a woman, which in many countries and U.S. states is promoted over other forms of marriage (such as polygamy or same sex marriage).

Home ownership in the US is an obvious one, in this post-housing-bubble financial crisis, in which there have been Federal bailouts of the various Government Sponsored Entities like Fanny Mae and Freddy Mac, set up to promote home ownership.

Food production by small farmers, not only in the US, but also in Europe and Japan: we protect this by subsidies, price supports, government supported crop insurance programs, etc.

Fishing by small fishing boats: if we were only interested in protecting fish to keep fisheries sustainable, we might regulate fisheries by imposing seasonal limits on how much could be caught. But in many cases we also set daily limits (e.g. some fishermen on Cape Cod are limited to catch no more than 400lbs of scallops a day). This makes large, factory fishing uneconomical, and protects small local fishermen.

The right to purchase guns probably falls into this category in the U.S.

Of course, as with repugnant transactions, protected transactions may involve a lot of complications, like providing public goods and protecting rights. But it may be that to better understand which kinds of transactions may come to be regarded as repugnant, it will help to understand which kinds of transactions are sometimes protected.

Update: looking at the comments, commuting alone in a car seems worth including on the list of protected transactions in the U.S. (And thank you to Dubner at Freakonomics for his generous plug of this blog...)

Airport slot auctions in the Washington Post

Today's Washington Post has an editorial regretting the obstacles thrown up to auctioning airport slots, and in favor of good market design: Airport Slot Auctions--A good idea to relieve air traffic congestion is snuffed out.

HT: Scott Kominers

Miscellaneous repugnant transactions

Germany to ban paintball
"The German government is planning to ban paintball and laser shooting games in reaction to the recent school massacre in which 15 people died.
Under legislation agreed by the ruling coalition of the chancellor, Angela ­Merkel, using air rifles to shoot paint-filled pellets at opponents is likely to be made illegal, and would be punishable with fines of up to €5,000 " (HT Muriel Niederle)

Over at Knowledge Problem: Price gouging: Is it wrong? Should it be against the law?

At MR, Tyler Cowen reports:"Love Land, a sex theme park set to open this October in China won't have the chance to lose it's virginity. Chinese bureaucrats ordered the park destroyed after details of the park's featured attractions were leaked.
The story is here. The rest of the article relates:
The park was to have giant-sized reproductions of male and female anatomy, and offered lessons in safe sex and the proper use of condoms. There was also an exhibition about the history of sex, as well as workshops offering sex techniques.
The entrance to park featured a giant pair of women's legs clad only in a red thong. Those legs are now closed forever. Officials would only say that the concept of the park was vulgar, and deemed unnecessary. Bulldozers and wrecking ball were seen destroying the exhibits as onlookers tried to get a peak.
China considers the topic of sex taboo, even though illegal prostitution is at an all-time high in the country. "

Fertility treatments in Britain: a post actually headlined Repugnant Transactions follows a story in the Guardian, Thousands of women leaving UK for fertility treatment, • Women losing patience with NHS waiting lists • Eggs and donated sperm in short supply, study says.
"Couples here are able to exploit the fact that, in some countries, women who choose to donate eggs can be paid, said Culley, with some donors in America receiving up to $10,000. In Britain, by contrast, tight regulation of fertility means egg donors receive only expenses.
"All the evidence is that cross-border reproductive care is growing. Women here do this for all sorts of reasons," she said. "There is a serious shortage of eggs, donated sperm is in shorter supply than before, the cost can be cheaper abroad and some people want IVF which they can't get on the NHS."
...
"Isobel O'Neill, a fertility counsellor in Glasgow, said couples seeking a donated egg who visit the Glasgow Royal Infirmary are told there is a six- or seven-year wait for one on the NHS. Even those willing to pay at the private Glasgow Centre for Reproductive Medicine, where she also works, face a delay of up to a year."

California High Court Upholds Gay Marriage Ban
"The California Supreme Court upheld a ban on same-sex marriage Tuesday, ratifying a decision made by voters last year. The ruling comes at a time when several state governments have moved in the opposite direction.
"The court’s decision does, however, preserve the 18,000 same-sex marriages performed between the justices’ ruling last May that same-sex marriage was constitutionally protected and voters’ passage in November of Proposition 8, which banned it.
The court’s opinion, written by Chief Justice Ronald M. George for a 6-to-1 majority, noted that same-sex couples still had a right to civil unions. Such unions, the opinion said, gives those couples the ability to “choose one’s life partner and enter with that person into a committed, officially recognized and protected family relationship that enjoys all of the constitutionally based incidents of marriage.”
Justice George wrote that Proposition 8 did not “entirely repeal or abrogate” the right to such a protected relationship. Instead, he said, it “carves out a narrow and limited exception to these state constitutional rights, reserving the official designation of the term ‘marriage’ for the union of opposite-sex couples as a matter of state constitutional law.”
The 18,000 existing marriages can stand, he wrote, because Proposition 8 did not include language specifically saying it was retroactive."

Update, hugging: Jorge Ortiz directs my attention to a story in today's NY Times that I had overlooked, some high schools are banning hugs:
"And schools from Hillsdale, N.J., to Bend, Ore., wary in a litigious era about sexual harassment or improper touching — or citing hallway clogging and late arrivals to class — have banned hugging or imposed a three-second rule. "

An innovative early paper on repugnance: Ravi Kanbur, "On Obnoxious Markets", July 2001. Revised version published in Stephen Cullenberg and Prasanta Pattanaik (editors), Globalization, Culture and the Limits of the Market: Essays in Economics and Philosophy. Oxford University Press, 2004.
Professor Kanbur argues that extreme outcomes, and asymmetric and inadequate information, and inequality are big components in making markets obnoxious, and I agree.

I'm personally reluctant to set out a theory of what makes markets repugnant since I always find markets that don't fit into any simple framework. Same-sex marriage, for example, is a transaction that many people find repugnant (and is now once again illegal in California, see above), but it is no more extreme, or subject to asymmetric information, or unequal than heterosexual marriage, which is just about the opposite of a repugnant transaction, what we might call a "protected" transaction.

Signaling for attention: email version

Seriosity.com thinks it has a solution to email overload. They offer firms a signaling service based on an artificial currency ("serios"). Potential message senders are endowed with a fixed supply of serios per week, and they can spend them to indicate their estimate of the value of the message. The company demo suggests that managers may not read underfunded messages, and will read highly endowed messages first. (It isn't clear what the equilibrium would look like in a dynamic environment.)

But creating scarce signals is not a bad idea, see e.g. the mechanism for Signaling on the Economics Job Market , which allows each candidate to send up to two signals.

From their website:
"Attent creates an economy with a scarce new currency (Serios) that enables users to signal the importance of their outgoing email by attaching value. Recipients can use the Serios received to prioritize their attention to messages, and in return use their Serios to assign appropriate weight to their responses."

HT: John Cawley

Where did all the MD license plates go?

When I was a child, it was commonplace to see cars with license plates indicating that the car belonged to a medical doctor. Where did they all go?

It isn't that they aren't still available to doctors who want them, e.g. here is the MA application form, complete with a picture of an MD license plate: Application for Medical Doctor (MD) Plates . So why have doctors reduced their use of this kind of signaling?

My guess is the answer has to do with changes in markets that changed the value of sending such a signal. Here are some conjectures:

Housecalls play a much smaller role in medical practice than they did when I was a child, and so the need for docs to park in odd places and rely on their plates to ward off parking tickets has decreased.

The reputational benefits of being a doctor have decreased.

Drug addicts started to break into cars with MD plates, looking for drugs to use or sell.

Feel free to leave other conjectures as comments...

Hal Varian on ad auctions

Muthu Muthukrishnan at Google in NY has a nice post about Hal Varian, Google's chief economist and a pioneer of the economics of the internet (among other things*). Here is a youtube video in which Hal gives an elementary explanation of Google's ad auction. MR points to this article about Hal in Wired: Secret of Googlenomics: Data-Fueled Recipe Brews Profitability.

Here is Hal's recent paper Online Ad Auctions, forthcoming in the May 2009 AER Papers and Proceedings. Here is Hal's earlier paper, Position Auctions, published in the 2007 International Journal of Industrial Organization. One nice thing about both these papers is that they explicitly take note of the link between ad auctions and the matching literature.

*Hal is the original Renaissance economist. Aside from his academic work on subjects from the internet to public goods provision, he's an author of bestselling texts and business books, and was for many years a NY Times columnist. One of his columns, When Economics Shifts From Science to Engineering, August 29, 2002, on the subject of market design, was about a paper of mine. When I marveled at how succinctly he was able to summarize, he told me that his secret (quoting Elmore Leonard) was to "leave out the parts that people skip."

Waiting lists and late college applications

Students who may be waiting to see if they will be offered positions from some colleges' waiting lists should also be aware that other colleges are still accepting applications.

The Common Application .org has posted a list of 67 of their members who are still accepting applications (including the University of Chicago):
Augsburg College, Berry College, Canisius College,Carroll College, Cazenovia College, College of Mount Saint Vincent, College of Santa Fe, College of St. Benedict-St. John's University, Colorado State University, Converse College, Creighton University, Culver-Stockton College, Curry College, Dominican University of California, Franklin Pierce University, Green Mountain College, Gustavus Adolphus College, Hofstra University, Illinois College, Illinois Institute of Technology, Keystone College, Lasell College, Lawrence Technological University, Loyola University New Orleans, Lynn University, Manhattan College, Marquette University, New England College, Nichols College, Notre Dame de Namur University, Oglethorpe University, Pacific University, Prescott College, Regis College (Massachusetts), Regis University (Colorado), Rollins College, Russell Sage College, Sacred Heart University, Sage College of Albany, Salem College (North Carolina), Seton Hall University, Seton Hill University, Southern New Hampshire University, St. Lawrence University, St. Norbert College, SUNY Fredonia, SUNY Oswego, TCU (Texas Christian University), The College of Idaho, Thiel College, Thomas College, University of Chicago, University of Dallas, University of La Verne, University of Maine, University of Maine at Machias, University of Massachusetts Boston, University of New Haven, University of Tampa, Utica College, Valparaiso University, Wabash College, Webster University, Westminster College (Missouri), Westminster College (Utah), William Jewell College, Xavier University

David Warsh on Auctions and Politics

David Warsh, the Boston-based economic journalist whose weekly internet column Economic Principals talks about economics and economists, writes about last week's NBER Market Design Working Group Meeting, which he attended.

Market design has blossomed in the last decade, in directions that would have been hard to predict. It has also made enormous progress in one of its oldest streams, auction design. This first NBER conference on market design had as its main theme the progress that has been made in auction design, by economists and computer scientists, since the first spectrum auctions in 1994. Warsh writes about that, and the political processes involved in persuading governments to adopt the new auction technologies (not to mention simply communicating them): Auctions and Politicians.

Market for textbooks

The Washington Post has a story on the educational software company Aplia, founded by Paul Romer: An Economist, an Academic Puzzle and a Lot of Promise. It makes a number of interesting observations about the design of the textbook market, and how interactive software that gives students immediate feedback, and lets them participate in experimental economics style interactions, complements the traditional textbook and lecture style of instruction.

"Students seemed to like Aplia's engaging and easy-to-use software, as well as the feedback. Professors liked Aplia even more. It allowed them to leverage the grade-grubbing instincts of today's college students to get them to do homework -- but without having to spend countless hours reading and correcting the assignments. They also got reports from Aplia identifying which students were having the most trouble with the material and which concepts were stumping the class as a whole. "
...
"By relieving instructors of the considerable burden of reviewing homework assignments, the technology makes it possible for universities to require professors to teach more students, either by increasing class sizes or the number of classes they teach. More important, it frees instructors to spend more time preparing for class, working with individual students and even doing their own research. "

It may also allow publishers to circumvent the secondhand market for textbooks, as the software license can be separated from the book.

HT: Greg Mankiw

Markets for hunting

In New England, battles about repugnant transactions often pit social liberals against social conservatives, with the liberals trying to make some transaction possible that the conservatives believe should be banned, as in debates about Same sex marriage in Iowa, and New England.

But there are other kinds of transactions that liberals find repugant and conservatives defend. One of these concerns buying and selling permission to shoot captive game in game farms: Slaughter to some, game to others: Hunting preserves offer captive animals

"For the privilege of killing two boars, Cabral's father and grandfather paid $1,200. By their reckoning, that gets them enough bacon, pork chops, and ham to last their families nearly a year.
"I see it like I'm going grocery shopping," said Russell Mulgrew, Cabral's grandfather.
Not everyone shares that view. Opponents, including some hunters, say captive hunting is anything but sporting for one simple reason: There is no fair chase when the animal has no hope of escape.
As commercial interest grows in Maine to expand these preserves and opposition ratchets up across the country, a deep-seated ethical debate over the ranches is being pushed into the public eye.
"It's morally and ethically wrong to enclose animals and charge a fee to kill them. It's a theme park environment where the prize is a dead animal," said Robert Fisk Jr., president and director of Maine Friends of Animals.
New England's captive parks attract hundreds of hunters each year. In Maine, 388 animals were killed in 2005, although that fell to 262 by 2007. The parks rarely make headlines unless it's about someone notable - such as Massachusetts' former governor William F. Weld boasting about shooting a wild boar in 1991 but initially failing to say that it was in a New Hampshire game park.
Vermont banned new game preserves late last year, largely over concerns about disease, especially chronic wasting disease, a contagious, fatal neurological illness among deer. An effort to outlaw seven existing shooting ranches in Maine for ethical reasons, which was supported by Fisk's group, failed last month. Two other Maine bills are pending: one to permit a new game preserve and the second to expand the variety of animals at others. New Hampshire has two game parks, but no new ones are allowed.
Big-game shooting preserves are prohibited in Massachusetts, Connecticut, and Rhode Island. Still, it is estimated that there are more than 1,000 game ranches in at least 28 states, according to the Humane Society of the United States, which has an ongoing campaign to end captive hunting. Debates over the ranches have surfaced from New York to North Dakota in recent years."

In England, a legal ban on hunting foxes with dogs (the whole picturesque business, but no fun for the fox) seems to be falling into disuse:

Death knell for hunting ban as police abandon monitoring operations:
"Police forces are to stop monitoring hunts in a change of policy that sounds the death knell for the hunting ban, The Times has learnt."
...
"Richard Brunstrom, Chief Constable of North Wales and the Acpo spokesman on rural affairs, said: “Hunting is definitely not a policing priority. It is not illegal to wear a red coat and ride a horse in a public place.” The new guidance undermines one of the most controversial pieces of legislation introduced by the Labour Government, which took up 700 hours of parliamentary time. Since the Hunting Act came into force in 2004, there have been eight prosecutions, of which only three have been successful, with one pending. Hunting has thrived. Mr Brunstrom said that police had to chose which areas of law enforcement to devote scarce resources to. He said: “If you look at hunting, the penalties do not include a prison sentence for offenders. This puts the Hunting Act to the lower rather than the higher end of offences. Parliament had the chance to include imprisonment as a sentence but did not do so.” "
...
"A spokesman for the League Against Cruel Sport said: “We fought for 80 years for the hunting ban and, while we accept it is not a high priority for police, a ban was the will of Parliament and is the will of the people and we are going to press for more prosecution cases to be brought.” "

See also The hunt ban: a bad law with nowhere to run

More on open source software

I recently wrote about the new take on Open source software proposed by Michael Schwarz and Yuri Takhteyev. Now, while reading David Pennock's reflections on the recent NBER Market Design Working Group Meeting, I followed his link to Paul Graham , on science, art, and engineering, who (in passing) has this to say:

"It seems surprising to me that any employer would be reluctant to let hackers work on open-source projects. At Viaweb, we would have been reluctant to hire anyone who didn't. When we interviewed programmers, the main thing we cared about was what kind of software they wrote in their spare time. You can't do anything really well unless you love it, and if you love to hack you'll inevitably be working on projects of your own."

Graham thus views open source as akin to the scholarly publishing that professors do, which is also uncompensated open source work. Like programmers, we also get rewarded for it in our day jobs.