Two-career job searches

When a couple needs two career-track jobs, they face a hard problem of coordination with each other and with their prospective employers. If they are in different industries, they need to find a four-way match, between the two of them and two different employers. If they are academics, they can at least try to find two jobs at the same university, but if they are in different disciplines the negotiations will involve different departments (and maybe different schools, i.e. different deans), and so the search and negotiation process can be complex, and can still involve potentially very different timing of searches and hiring.

The Chronicle of Higher Ed has a first person account of one such struggle, that ended successfully with two tenure-track assistant professorships at the same university: Lessons of a Dual Hire.

The (pseudonymous) author writes:"After three years of job searching for me in the geological sciences, and four years for my husband in engineering, we successfully maneuvered this year to find two tenure-track positions at the same university. Here's how it happened."

The article goes on to explain some of the difficulties that were overcome in the most recent, successful job search.

Here are two earlier related posts, both of which touch on my work on making the clearinghouse for new doctors, the National Resident Matching Program, more friendly to couples.

Job market for couples (which concerns law schools hiring of couples); and

Match Day for new doctors, which is specifically about couples who are both seeking jobs as new doctors.

Even the medical clearinghouse doesn't do much to help doctors whose spouses have non-medical careers (or even doctors whose spouses have medical careers with different years of graduation from medical school). Some years ago, I was asked to respond to an essay from a doctor's spouse which suggested that maybe the market would work better without a match, i.e. without any centralized clearinghouse. That essay, and my reply, were published in an online student edition of JAMA that no longer exists, on web pages that are no longer maintained. However I am linking to them below, on the remarkable internet archive also known as the Wayback Machine.

Mismatch, by Betsy Brody, University of Notre Dame

Response to Betsy Brody's "Mismatch" by Alvin E. Roth (both originally in MSJAMA, April 7, 1999.

Rereading my response, I would have written it a bit differently today, but the basic point still seems right. But two-career searches are tough, no doubt about it.

Deceased organ donation: advice from Steve Jobs

Here's a 2-minute CNN video, at the beginning of which Apple CEO Steve Jobs, who recently received a deceased donor liver, advises us all to register to become donors.

If you have a Massachusetts driver's license you can register online to be an organ donor, right now, right here.

Law clerks for Massachusetts courts, continued

In MA, the Proposal to let law-firm hires help state courts is dropped.

"The state judiciary has abandoned a controversial proposal to fill coveted law clerk jobs at no cost to the government with newly hired private lawyers whose firms have pushed back their start dates because of the recession."
...
"Mulligan had proposed the arrangement in the spring because of two related employment trends. Tight finances had forced the state to rescind job offers it had made in December to at least 24 recent law school graduates who wanted to work as law clerks. And the bad economy had prompted some law firms to defer bringing on first-year associates at full salaries.
Many firms around the country are paying such “deferred associates’’ stipends of about $60,000, less than half their regular starting salaries of about $150,000, to hold onto them until the economy improves.
Some firms have recommended that the fledgling lawyers volunteer at nonprofit groups or engage in public service. And several local firms asked Mulligan whether their associates in waiting could perform their public service as law clerks.
Some legal specialists had said an arrangement that involves a law firm paying a judicial employee raised thorny ethical questions; firms that donate lawyers to the courts might appear to be currying favor or expect preferential treatment.
...
"But Mulligan won the approval of the Committee on Judicial Ethics of the Supreme Judicial Court after he proposed a special “double blind’’ arrangement.
The Flaschner Judicial Institute, which provides continuing education to state judges, would have dealt with the law firms that supplied the clerks. Judges and court officials would have had no contact with the donating firms, and the firms would have been instructed not to identify the clerks on their websites. The clerks would have been barred from disclosing which firms were paying their stipends."


Here is my earlier post on the proposal: Law clerks for Massachusetts courts

Market for new lawyers

Graduating in a recession is no fun, and aspects of the way lawyers are hired and promoted may make that particularly so not only for this year's law grads, but for next year's, since many law firms essentially hire after the second year of law school: Downturn Dims Prospects Even at Top Law Schools .

"Discussions at industry roundtables and casual talk among officials at leading schools and firms suggest a consensus that interview dates should be pushed back to the spring of the second year, if not the third year. The recent problems have arisen, reform-minded critics say, because the legal industry essentially hires two full years ahead of when employees begin to work. And because young lawyers have to be advanced by lockstep every year, it is difficult to make recruiting changes that are responsive to shocks in business.
“There’s a long list of issues that need re-examining,” said Ralph Baxter, the chairman of Orrick. “The current economic circumstances have helped people see the economic inefficiencies we’ve been living with.”
Even lockstep, as sacred a pillar of Big Law as the billable hour, has been undermined by the hiring headaches of the last year, some argue. Orrick and another major firm, Howrey, have introduced innovative programs for associates based on apprenticeships or tiered systems that depart from the traditional “up or out” partner-track models. Some industry observers say their moves represent first steps that may ultimately give firms greater flexibility in hiring."

Matching for school choice

School choice has received some extended coverage lately, with articles intended to appeal to a broad audience interested in education issues and mathematics, respectively. Both focus on work that Atila Abdulkadiroglu, Parag Pathak, Tayfun Sonmez and I have had the opportunity to help put into practice (and both are related to ongoing work in CA being spearheaded by Muriel Niederle and Clayton Featherstone).

Over at Education Sector, the September 2009 issue of their feature Ideas at Work covers the new school choice mechanisms for Boston Public Schools and New York City high schools:
MATCHMAKING: ENABLING MANDATORY PUBLIC SCHOOL CHOICE IN NEW YORK AND BOSTON, By Thomas Toch and Chad Aldeman. (It also comes with a 10 minute podcast you can listen to: "A Closer Look at Mandatory School Choice", in which Aldeman interviews me and Atila...)

Joseph Malkevitch has written one of the American Mathematical Society's Monthly Essays, called School Choice.
It's an introduction to Gale and Shapley's basic deferred acceptance algorithm, with a discussion of some applications, with attention paid to the fact that the student proposing algorithm makes it safe for families to reveal their preferences.

Federal Judges Law Clerk Hiring

Today, the day after Labor Day, as law students begin their third and final year of law school, is the time when Federal judges are supposed to begin hiring their law clerks for next year. (A clerkship, particularly with an appellate court judge, is a very career enhancing first job for a new law grad.)

While the very beginning of the third year of law school might seem early to be sorting out the plum jobs, in fact it is quite late by the historical standards of this market. Over the last few decades, hiring has periodically unraveled back well into the second year of law school. And so, not for the first time, judges are trying to restrain themselves. Here's the current plan and it's key dates: Federal Judges Law Clerk Hiring Plan with Critical Dates .

Tuesday, Sept. 8 is the "first date when applications may be received." Judges are then supposed to wait until Friday Sept. 11 before contacting candidates to schedule interviews, and to wait until the following Thursday, Sept. 17, before actually conducting any interviews or making any offers. Offers, often exploding offers that must be answered immediately, can be made at the interview, and so much of the market is over by the end of the first day. (Yesterday's post included my favorite exploding offers story.)

One more thing. Judges cheat. (My coauthors tell me I'm not supposed to say that, rather, some judges do not comply with the guidelines.) So a nonnegligible part of the market is over before it's supposed to be over. Some part of the market may even be over before it's supposed to have begun. In our 2007 Chicago Law Review article The New Market for Federal Judicial Law Clerks, a third of the judges acknowledged that they cheated. But for the time being they were largely cheating by only a few days, so that the Labor Day focal point has remained.

The law blogs are full of contemporary reports about this year's market. See e.g. Getting Your Clerkship Before Labor Day? It's Not Just for Graduates Anymore and Clerkship Application Season: Open Thread

There are also some blogs that will post news in real time, including when particular judges have begun to hire, and when they finish. They open a window on the amount of "non-compliance." See Law Clerk Addict, and Clerkship Notification Blog .

The situation well before the current attempt to organize the clerkship market is described here: Federal Court Clerkships in Roth, A.E. and X. Xing, "Jumping the Gun: Imperfections and Institutions Related to the Timing of Market Transactions," American Economic Review, 84, September, 1994, 992-1044

The more proximate history of the market before the current attempt is here:
Avery, Christopher, Christine Jolls, Richard A. Posner, and Alvin E. Roth, "The Market for Federal Judicial Law Clerks" University of Chicago Law Review, 68, 3, Summer, 2001, 793-902.(online at SSRN)

The just-prior attempt to organize the market is described here, and investigated experimentally:
Haruvy, Ernan, Alvin E. Roth, and M. Utku Unver, “The Dynamics of Law Clerk Matching: An Experimental and Computational Investigation of Proposals for Reform of the Market,” Journal of Economic Dynamics and Control, 30, 3 , March 2006, Pages 457-486. (With appendices and experimental instructions here.)

And the early experience with the current market organization is described here (with lots of illustrative quotes from clerkship applicants).
Avery, Christopher, Jolls, Christine, Posner, Richard A. and Roth, Alvin E., "The New Market for Federal Judicial Law Clerks" . University of Chicago Law Review, 74, Spring 2007, 447-486.

Exploding offers

My favorite exploding offer story is probably this one:
"I received the offer via voicemail while I was in flight to my second interview. The judge actually left three messages. First, to make the offer. Second, to tell me that I should respond soon. Third, to rescind the offer.
It was a 35 minute flight." −2005 applicant for federal judicial clerkships (p448 of "The New Market for Federal Judicial Law Clerks" )

Exploding offers can have a malign effect on market performance. Here's a just-published experimental investigation that focuses on how exploding offers contribute to the unraveling of a market:

Niederle, Muriel, and Alvin E. Roth, “Market Culture: How Rules Governing Exploding Offers Affect Market Performance," American Economic Journal: Microeconomics, 1, 2, August 2009, 199-219.

(In case you were always wondering how lawyers and gastroenterologists are similar, and different, these two papers will give you some clues, at least for when they are looking for jobs...)

Here's the Abstract of the AEJ Micro paper: Many markets encounter difficulty maintaining a thick marketplace because they experience transactions made at dispersed times. To address such problems, many markets try to establish norms concerning when offers can be made, accepted and rejected. Examining such markets suggests it is difficult to establish a thick market at an efficient time if firms can make exploding offers, and workers cannot renege on early commitments. Laboratory experiments allow us to isolate the effects of exploding offers and binding acceptances. In a simple experiment, we find inefficient early contracting when firms can make exploding offers and applicants’ acceptances are binding.

"Death pools", coming to life again

The NY Times reports on efforts to buy and securitize life insurance policies, that would be sold to investors by people with terminal illnesses: Wall Street Pursues Profit in Bundles of Life Insurance . The idea is simple enough:

"Defenders of life settlements argue that creating a market to allow the ill or elderly to sell their policies for cash is a public service. Insurance companies, they note, offer only a “cash surrender value,” typically at a small fraction of the death benefit, when a policyholder wants to cash out, even after paying large premiums for many years.
Enter life settlement companies. Depending on various factors, they will pay 20 to 200 percent more than the surrender value an insurer would pay. "
...
"Mr. Terrell was the co-head of Bear Stearns’s longevity and mortality desk — which traded unrated portfolios of life settlements — and later worked at Goldman Sachs’s Institutional Life Companies, a venture that was introducing a trading platform for life settlements. He thinks securitized life policies have big potential, explaining that investors who want to spread their risks are constantly looking for new investments that do not move in tandem with their other investments.
“It’s an interesting asset class because it’s less correlated to the rest of the market than other asset classes,” Mr. Terrell said. "

But life insurance is the kind of product that has always had at least a tinge of repugnance, which is why many states have "insurable interest" laws saying that someone can only purchase insurance on your life if they have a reason to want you to be alive. "As discussed by Justice Oliver Wendell Holmes Jr. in a 1911 Supreme Court case: “A contract of insurance upon a life in which the insured has no interest is a pure wager that gives the insured a sinister counter interest in having the life come to an end” "

That's from my paper Repugnance as a Constraint on Markets , where I went on to say"The insurance industry lobbies against Stranger (or Investor) Owned Life Insurance (SOLI) and “viatical settlements,” which are third party markets and funds that purchase life insurance policies from elderly or terminally ill patients who wish to realize the cash value of their policies while still alive. The arguments against such funds often focus on the repugnance of having life insurance held by an entity that profits from deaths (in contrast to insurance companies, which make money when their customers continue living). Of course, sellers of annuities also profit from untimely deaths."(p41)

Some of the quotations from the NY Times story make me wonder whether the securitizers have fully mastered the potential repugnance issue of this kind of investment, and whether that might ultimately affect its success. See if any of these lines strike you as courting a reaction of repugnance.

"Goldman Sachs has developed a tradable index of life settlements, enabling investors to bet on whether people will live longer than expected or die sooner than planned....Spokesmen for Credit Suisse and Goldman Sachs declined to comment. "
...
"In addition to fraud, there is another potential risk for investors: that some people could live far longer than expected.
It is not just a hypothetical risk. That is what happened in the 1980s, when new treatments prolonged the life of AIDS patients. Investors who bought their policies on the expectation that the most victims would die within two years ended up losing money.
It happened again last fall when companies that calculate life expectancy determined that people were living longer. "
...
"The solution? A bond made up of life settlements would ideally have policies from people with a range of diseases — leukemia, lung cancer, heart disease, breast cancer, diabetes, Alzheimer’s. That is because if too many people with leukemia are in the securitization portfolio, and a cure is developed, the value of the bond would plummet. "
...
"But even with a math whiz calculating every possibility, some risks may not be apparent until after the fact. How can a computer accurately predict what would happen if health reform passed, for example, and better care for a large number of Americans meant that people generally started living longer? Or if a magic-bullet cure for all types of cancer was developed? If the computer models were wrong, investors could lose a lot of money."

Matching children to classes

If the only thing that mattered about an elementary school class was the teacher, then matching children to classes would be simpler than it is (and more like school choice as we usually think of it). But it is a more complex problem when you take into account that it would be good if your child could be in a classroom with his friends, but without the kids who fight with him.

Slate has a story, Should parents meddle in their kids' classroom assignments?, which in turn prompted a post, the class matching problem, by Joshua Gans on his economics-and-parenting blog Game Theorist. (Gans' contribution to the "-onomics" library is called Parentonomics. He's also a prolific contributor to the econ- literature, and is likely to be a sabbatical visitor at Harvard in 2010. See my earlier post Market for ideas.)

In elementary school, kids have only one class. In high school, you have to assign each kid a bundle of classes. That makes the problem both harder—because bundles are hard, and there are complementarities—and easier, because one class isn’t divisible, but bundles are…you can give a high school kid some good classes and some bad ones, and have it come out to an ok schedule. Eric Budish has made some progress on this, although without worrying about putting friends in the same class (see my earlier post Course allocation, by Eric Budish )

Roommate matching

"Male or female? Smoker or nonsmoker?
Those two questions have long been the basis for the University of Arizona’s roommate-pairing formula. But a year ago the university decided to give incoming students seeking deeper compatibility another option: shopping for their roommates on the Web."


That's the first paragraph of an interesting story at Inside Higher Ed about using the web to improve roommate matching: Match at First Site .


"Arizona is one of a small but growing number of colleges that have contracted with RoommateClick, a service that lets students take the lead on a task that has historically fallen to campus housing officials by browsing and communicating with future classmates who have also signed up for the service. Students who have hit it off online can then request to bunk with each other."


For a different market, see my earlier post Housemate match .

Weeding as market regulation

We have what our friend Bettina Klaus calls a Sisyphus garden: we can weed for an hour whenever we want, and get trashbags full of biomass.

Weeding is a bit like being a regulator, you have to decide what counts as a weed, where. This always gets me thinking about what constitutes "unfair" competition, or maybe "competition in restraint of" what we would like the garden to be.

I am a permissive regulator; if we have planted some ground cover in one place, and it also takes root where we have planted a different ground cover, let competition decide the winner. "Unfair" competition takes the form of parasitism (vines that reach for sunlight by climbing over their slower growing hosts) or shallowly rooted, ephemeral tall plants that spring up between the roots of longer lived plants, but compete with them for sunlight and water.

Market Design Blog: the second year

Peter Coles and I began this blog in September 2008 to provide some additional motivation and context for our market design course. We weren't sure what we would blog about, except that we knew that we'd link to news stories related to market design either as a verb (designing markets) or as a noun (how the design of a market influences its performance). I also anticipated I'd follow up my interest in repugnant transactions, i.e. transactions that aren't represented in the marketplace because, even though some people might like to engage in them, others object.

Judging from the keywords we assigned to blog posts, repugnance turned out to be the modal subject. Other popular keywords have been (with some overlap): the academic marketplace, auctions, college admissions, compensation for donors, kidney exchange, market design, marriage, matching, and school choice. I retrospectively added a keyword, entrepreneurial market design, which is Peter's phrase.

We kept the blog going even after the course ended (it turns out I like to blog), and picked up some readers over the course of the year, some endorsements from much more famous bloggers (e.g. here and here), and even some friendly advice on how to get more readers (for which, thanks, although I'll probably keep it going as is for a while).

So, if you're taking the course, or if you're new to the blog for some other reason, welcome aboard. We're still figuring out what the blog is for, but it turns out that market design is everywhere, so there's lots to blog about. I'm looking forward to year 2.

Kidney donations, incentives, sales, legislation

An interview including Alex Tabarrok, Sally Satel, and Frank Delmonico, covering the range of viewpoints on the subject.

"Last year Pennsylvania Senator Arlen Specter floated a draft bill that could have cleared the way for states to offer non-cash incentives. ...
But groups including the National Kidney Foundation rejected Specter's proposal, now a spokeswoman for the Senator says he has no plans to introduce the bill."

Here is one draft of Senator Specter's proposed bill (on the site of the American Society of Transplant Surgeons--it was never introduced into the formal legislative process): Organ Donation Clarification Act of 2008 - Proposed Specter Bill

The current issue of the American Journal of Transplantation contains a survey of the ASTS membership, which finds that a majority of the surgeons responding support various income tax credits, insurance, and reimbursement for funeral expenses and lost wages, but oppose cash payments to the donor, donor's family or estate. (Rodrigue et al., "Stimulus for Organ Donation: A Survey of the American Society of Transplant Surgeons Membership," AJT, 2009, 9, 2172-2176.

Bebchuk on bonuses

Bonus Guarantees Can Fuel Risky Moves by Lucian Bebchuk in the WSJ:

"Financial firms seeking to attract and retain talent are reported to be making a substantial use of guaranteed bonuses, and the French Economy Minister recently called for limits on guaranteed bonuses. While many now focus on how using guaranteed bonuses affects the level of pay, it is important to recognize their effect on incentives. Guaranteed bonuses create perverse incentives to take excessive risks, and they consequently could well be worse for incentives than straight salary."

Policing the lobster commons

Lobsters are caught in traps that sit on the sea floor, marked by (and recovered via) buoys that float above, connected to the trap by a rope. Lobstermen in Maine are known for policing who sets traps where by cutting the lines (or threatening to cut the lines) of lobstermen who set traps outside of their territory. From time to time there's a question about whether the state should limit certain areas to local lobstermen. Now is such a time:

In Maine, Tensions Over Ailing Lobster Industry
"Officially, anyone with a Maine lobster license can set traps almost anywhere in state waters. Most lobstermen are allowed 800 traps each, making for a crowded ocean floor.
But unofficially, each harbor has its own boundaries, determined by local lobstermen over the decades. Newcomers often find their buoys snatched or their trap lines cut. The lobstermen who live on Maine’s rugged islands are especially territorial and known for practicing frontier justice; in one notorious case in 2000, two lobstermen fought over turf with a pitchfork and a fish gaff."
...
"The idea of a resident-only lobstering zone is not without precedent. The state approved a two-mile “conservation zone” around Monhegan Island in 1998, restricting access to local lobstermen, who had complained about interlopers from the mainland. "
...
"George Lapointe, the state’s commissioner of marine resources, said he had not yet decided whether to endorse a resident-only zone for Matinicus and had to consider the constitutional rights of all of the state’s roughly 5,800 licensed lobstermen.
“I’ve had three other islands say they’re interested in getting their own zone if we create one for Matinicus,” Mr. Lapointe said. “One of the concerns is the balkanization of lobster territories along the coast.”
He said that enforcing the zone around Monhegan had proved expensive for the state, and that while the shooting on Matinicus had put the island’s problems under a magnifying glass, lobstermen up and down Maine’s coast were hurting."

Craigslist and spam

Wired has a long article about Craigslist and its founder; the tone is simultaneously admiring and baffled: Why Craigslist Is Such a Mess. It's well worth reading.

Here's one paragraph that stood out:
"The battle flows back and forth. Captchas—distorted words that can be interpreted by humans more easily than by machines—tamed spam on craigslist for a while. Then it came back full force, not because the spammers had solved the difficult problem in artificial intelligence but because they had hacked an easier problem in global economics. I recently established a friendly email dialog with a young man in Dhaka, Bangladesh, who works on a 13-person team that creates craigslist spam. He fills in Captchas, creates new accounts with masked IP addresses, and posts ads all day long using text from a database provided by his employer, an anonymous spam king. The going price for a spam post on craigslist is about 50 cents, with large discounts for volume. When I told Buckmaster about my new friend, he took the news calmly. "These are technically sophisticated people who take pride in their work, and when we knock them down they don't just decide to go find something else to do. You could say we are breeding the perfect spammer." "

Market for short basketball players

In China, "The Dream Basketball League was set up to allow players of "shorter" stature to compete on a level playing field, with a height limit of 6ft 2in (1.88m) imposed." But it's hard to enforce the rules (since players can hunker down when measured): "Too tall" player sparks fan violence

HT: Luke Coffman (who you could hire this year, if he's not too tall).

"Girl taxi" and "Ladies Nights"

The WSJ reports 'Girl Taxi' Service Offers Haven to Beirut's Women .

"...these days the city's transport staple is facing some serious competition from a growing army of female taxi drivers, dressed in stiff-collared white shirts, dark shades, pink ties and small pink flowers tucked into their flawlessly coiffed hair.
All of them drive for Banet Taxi, or "girl taxi" in Arabic. It is Lebanon's first cab service for women, by women. You can't miss the company's signature candy-pink cars."
...
"The company is part of a regional trend. Entrepreneurs across the Middle East have recognized the business potential in offering secure transportation options for women. Banet Taxi follows on the heels of successful women-only transportation models in Dubai, Tehran and Cairo."

..."It is the promise of a safe and uneventful ride that attracts a wide range of female passengers: older women who want a quiet drive, young women out partying until late at night, and even preschoolers put in the cars by their teachers.
Passengers' reasons for choosing Banet are based, in part, on their cultural and religious backgrounds. Beirut's population breaks down roughly into thirds, Christian, Sunni and Shiite. Conservative Muslim women might take Banet Taxi to accommodate rules against traveling with unknown men. Others just want to put comfort and safety first."

While single sex markets thrive in some venues, others use gender as a basis for discriminatory pricing, with different prices for men and women. Economists mostly don't find this malign in two-sided platforms like those that provide dating opportunities, since they need to attract both genders in comparable proportions. So, for example, some clubs have 'ladies nights,' in which women are admitted for free or at a lower cover charge.

One lawyer is very annoyed by this: N.Y. Lawsuit Calls 'Ladies' Night' Discriminatory . However Roy Den Hollander "ANTI-FEMINIST LAWYER"--N.Y. Times seems to be mostly losing these cases, and has drawn this unsympathetic portrait from the New Yorker: Hey, La-a-a-dies!

Market design courses this Fall at Harvard and MIT

In a sign that market design is taking root, there are four relevant courses being offered this Fall along the banks of the Charles. (Some are planned for the Spring as well, Susan Athey will offer one at Harvard and Tayfun Sonmez will offer another at Boston College) . The Fall offerings I know of are the following.

Hanna Halaburda at HBS will teach “Economics and Strategy for Market Intermediaries and Two-Sided Platforms” (Wednesdays, 9-noon).
The main topics of the course are market intermediaries, two-sided markets, and the impact of network effects on the competitive environment. The course will combine formal economic analysis --- using theoretical models --- with case study discussions focusing on strategic considerations that companies in two-sided markets face (e.g. in on-line dating market or e-commerce).

David Parkes in SEAS will lead a seminar, CS 286r: Topics at the Interface between Computer Science and Economics Assignment, Matching and Dymamics
Monday, Wednesday 1-2.30 PM "Recent years have seen an explosion of computer-mediated markets, exchanges, and mechanisms for assignment and production. Problems of preference elicitation and optimization are coupled with concerns for incentive compatibility so that participantscannot manipulate the outcome of a mechanism in their favor. Related challenges include promoting appropriate levels of effort by participants in competition platforms, and preventing transaction failure by unreputable participants in peer production systems. Example domains span from sponsored search, to auction platforms such as eBay, to competition platforms such as TopCoder, to matching programs for medical residents and high schools, to kidney exchanges (without money)." He writes "economists are very welcome ..."

Parag Pathak at MIT will teach Topics in Game Theory, MW4-5.30 (BEGINS OCT 26) (E51-385) He writes "the course will cover advanced topics in matching, auction theory and mechanism design, with an emphasis towards areas of recent research."

Peter Coles and I will be teaching Market Design.
Economics 2056a/HBS 4150
Littauer Center M-16 Meeting Time: F., 9-12 (First meeting Friday, Sept 4)
The course "Deals with the theory and practice of market design, with prominent examples drawn from auctions, labor markets, school choice, and kidney exchange. " Here is the Syllabus, Fall 2009 (still a work in progress).

This course has been evolving since I first taught it with Paul Milgrom, and then with Estelle Cantillon. Some alumni of the course (some of whom took it as undergrads) who are presently active in market design and/or matching are Muriel Niederle, John Asker, Nicole Immorlica, Mohammad Mahdian, Michael Ostrovsky, Parag Pathak, Fuhito Kojima, Robin Lee, Mihai Manea, and Eric Budish.

Health insurance and incentive compatibility

A widely linked post, called Unconscionable Math by the blogger known as Taunter discusses why health insurance companies don't try hard to check the facts on insurance applications. (They only check your application for fraud, he claims, when you get sick enough to make really big insurance claims, and then they may be able to decline to pay if they can make the fraud claim stick.)

He draws the analogy to Las Vegas casinos, which he says don't check that gamblers are of legal age unless they win big:

"Years ago I was walking a casino floor with a casino executive. It was an incredibly detailed tour, and we got to talking about pretty much everything that came to mind about crowds and gaming. Now, a clever observer might notice that even the tolerant people of Nevada will not allow alcohol in vending machines – wouldn’t want the little ones to be able to get a Bud Light without a human being verifying their ID. But there we were in the middle of acres of blinking lights, with absolutely no one making sure that underage kids weren’t walking up to a slot machine. Indeed, they don’t card for the table games.
The executive told me you are free to play if you are underage, you just aren’t free to win. You can sit down and pump your money into the slots, and if you look presentable you can drop some chips on blackjack or craps. However, if you should happen to start winning, the pit boss or security team will come over and check your ID. The house edge is 100%."

So...be careful with those insurance applications.

Misc. organ transplant links

The links below, which I collected over some time but never turned into blog posts, all have something interesting to say about transplantation.

Should We Legalize the Market for Human Organs? An NPR debate among Sally Satel, Amy Friedman, and Lloyd Cohen (arguing for), and James Childress, Frank Delmonico, and David Rothman (arguing against).

Lingering myths discourage organ donation from American Medical News:
"Only 38% of licensed drivers have joined their states' organ donor registries, with many deterred by long-held misconceptions about how the transplant system works, according to poll results released in April."

Organ donations decline with economy from the Miami Herald.
The numbers of organ donors is down, and experts say one reason may be the recession. But "Because of legislative action, Floridians starting in July will be able to register online to be an organ donor at donatelifeflorida.org ."

In the Kidney Trade: Seller Beware
"Need a kidney? You may be able to buy one in Pakistan, which has become one of the world’s largest “kidney bazaars,” according to an article published in the May-June issue of The Hastings Center Report, a bioethics journal.
But who sells their kidneys, and what becomes of these people afterwards? The article, by two doctors and a psychologist from Karachi, paints an ugly picture of the kidney business and challenges the argument made by some that selling organs is a great financial boon to the poor and that they are grateful for the chance to do it. "

A Better Way to Get a Kidney Daniel Rose in a NY Times OpEd proposes we shift to "opt out" for deceased donors.

National Paired Donation Network (Steve Woodle) does an exchange in Pittsburgh: Kidney exchange benefits boy, 5, and woman

Larissa MacFarquhar: Paying for Kidneys
Megan McArdle: Department of Bizarre Arguments

"Exploitation" of the Poor is a Poor Reason to Ban Organ Markets from the Volokh Conspiracy

Milford men take part in four-way kidney swap (when we helped start NEPKE, only pairwise exchanges were initially feasible, but NEPKE became a pioneer in including 3- and 4-way exchanges in its optimization algorithm...)


Britain's only saviour sibling twins: At the age of two, little do they know it but Amy and Anthony Maguire are Britain's only 'saviour sibling' twins, created to be donors for their sick older brother.
Bone marrow donation requires a perfect match.
"The twins were born after IVF treatment was used to select embryos which are a match for their brother Connor so that blood taken from their umbilical cord at birth may one day be used to offer him life-saving treatment."

Organ donation to get halachic approval
A uniquely Israeli obstacle to organ donation wends its way towards resolution:
"Chief Rabbinate tries to encourage religious public to become organ donors by resolving halachic quandaries surrounding process, issuing special donor card "

Public call for organ donations (China Daily), and
China Announces Voluntary Organ Donor System (NY Times)
CD: "China launched a national organ donation system yesterday in a bid to gradually shake off its long-time dependence on executed prisoners as a major source of organs for transplants and as part of efforts to crack down on organ trafficking."...
"Currently about one million people in China need organ transplants each year while only 1 percent receive one, official statistics show.
Only about 130 people on the mainland have signed up to donate their organs since 2003, according to research on the promotion of organ donation after death by professor Chen Zhonghua with the Institute of Organ Transplantation of Tongji Hospital."...
"China issued an organ transplant law in 2007 that bans organ trafficking and only allows donations from living people to blood relatives and spouses, plus someone considered "emotionally connected."
However, organ middlemen have been faking documents in order to make a person who is desperately in need of money be considered "emotionally connected" to the recipients, reports said.
Living transplants increased to 40 percent of total transplants from 15 percent in 2006, Chen Zhonghua said.
"That's one of the daunting tasks facing us as we try to end the organ trade by establishing this system," Huang noted.
Other goals include preventing organ tourism, improving transplant quality, better defining donors' rights and satisfying patients' needs for transplants in an ethical manner."

NYT: "At least one million people in China need organ transplants each year, but only about 10,000 receive them, according to government statistics. Dr. Huang said that most of those organs — as high as 65 percent, by some estimates — are taken from death row inmates after their executions."...
"The practice of harvesting organs from executed Chinese convicts has been widely reported in the past, although it was only confirmed in 2005, by Dr. Huang, at a medical conference in Manila. The government has routinely denied other allegations that prisoners’ organs regularly found their way to the black market, often for sale to wealthy foreigners, and that executions were sometimes scheduled to coincide with the need for a specific organ.
At a news conference in Shanghai held Wednesday to unveil the new organ-donation system, one transplant surgeon was quoted by the newspaper as saying that the taking of organs from convicts was sometimes subject to corruption. "

Made in the USA, but also sold in Canada

We're advised to "think locally and act globally," and the product labels on my new shoes illustrate some of the tension between those mandates.

This label strikes a balance between the wish to be local (and sell to those Americans who prefer to "buy American"), and the wish to be global (and to sell in Canada, where the labelling laws require two languages). And the issue isn't that Canadians are (North) Americans too:

So, I'm happy to show my Solidaire des Travailleurs Americains, whose products, Fabrique aux Etats-Unis, compete in the fairly free global marketplace.

Further unraveling of pool chair reservations

Germans can now grab poolside chairs even earlier

"The German arm of Thomas Cook, Europe's second largest travel company, has been deluged with inquiries since announcing that holidaymakers at nine hotels in Turkey, Egypt and the Canary Islands can book recliners in advance for a fee.
Germans are famous around Europe for rising early to reserve recliners near the pool with their towels, and then going back to bed or eating a lengthy breakfast.
This often annoys tourists from other nations, but they will be unable to take advantage of the new service -- it is valid only for tourists booking their trips from Germany, Mathias Brandes, head of communications at Thomas Cook in Germany, said."

HT: Scott Kominers

Matchmaking for pet dogs in India

The New York Times reports on an emerging problem of dogs owned by the Indian middle class: Matchmaking in India: Canine Division

"“When a customer goes and buys a dog, 99 percent go for a male, and down the road when they need a mate, they face a problem,” Mr. Chopra said.
He tried his hand at pet matchmaking, linking males and females of the same breeds, but it was simply impossible to find matches. Most of the females remain with breeders, he said, who prefer professional stud dogs. This also helps keep the supply of popular breeds tight — if people cannot breed dogs in their backyard they cannot cut into breeders’ profits."

Dog fighting

Here's a Texas story about an undercover police operation--with the undercover policemen hosting a number of fights--that led to many arrests for conducting dog fights. After the arrests, the fighting dogs were put down. So it's a story about repugnant transactions, from several points of view...

Bringing Down the Dogmen: How a pair of undercover cops infiltrated the secret world of Houston dogfighting.

"For centuries, dogfighting was perfectly legal. In Rome’s Colosseum, gladiator dogs were pitted against one another or against other animals, including wild elephants. One of the more popular forms of entertainment in twelfth-century England was “baiting,” in which fighting dogs would be released into a ring with chained bulls and bears. In the colonial United States dogfights were common, and they continued well into the nineteenth century, with formal rules and sanctioned referees. As recently as 1881, the Ohio and Mississippi Railroad advertised special fares to a dogfight in Louisville, Kentucky.
Eventually, because of protests by such groups as the American Society for the Prevention of Cruelty to Animals, states began passing legislation that banned dogfights. By the thirties, dogfighting had been driven almost completely underground. Nevertheless, it remained a culturally ingrained phenomenon that simply refused to go away—a fact that became all too clear when Michael Vick, the quarterback of the Atlanta Falcons, was indicted by a grand jury in July 2007 for operating a dogfighting ring on his Virginia farm and later sentenced to two years in prison. The vast majority of Americans were stunned. Why, they wanted to know, would a young multimillionaire celebrity risk everything to engage in what they regarded as a barbaric practice?"

Here's an earlier post.

Update: the article is now gated (it wasn't when I read it). Here is an ungated followup article by the same author: Fight Club. Here is a followup by a different author: What Texas Monthly left out about 'bringing down the dogmen'

The education business: Stanley H. Kaplan R.I.P.

Education isn't a marketplace that supports only schools; it also supports test making companies, and test preparation companies. The founder of the big SAT prep company just passed away: here's an obit from the Chicago Trib. Stanley H. Kaplan, 1919-2009: Founded popular test-prep company.

The Atlantic has this to say. Stanley H. Kaplan's Legacy.

The Chronicle of Higher Ed's story contains this: "And as his business grew, all sorts of other commercial educational interests began to expand their influence on the academy. Today, the higher-education industry includes not only giant for-profit institutions like DeVry University, the University of Phoenix, and the degree-granting colleges of Kaplan itself, but also course-management companies like Blackboard Inc. and eCollege, distance-learning outsourcers like Higher Ed Holdings, and student-coaching and tutoring companies like Inside Track and Smartthinking."

The sending and transmitting and facilitating of signals is a big business, in college admissions as elsewhere. (Indeed, there's a big part of economic theory that looks on a college education itself as a costly signal sent by the teachable...)

Coming of Road Rage in Samoa

Unless the government backs down, Samoa will change from driving on the right to driving on the left (British Commonwealth style) on September 7:

Shifting the Right of Way to the Left Leaves Some Samoans Feeling Wronged
Government Calls Traffic-Rule Switch 'Common Sense,' but It Sparks Road Rage.

This is one of those cases in which it clearly helps everyone to have a clear rule about which side of the road to drive on, and a little government regulation (and even inter-government coordination) can promote efficient traffic flow. (Think of the congestion at the borders at which you had to switch from driving on one side to driving on the other.)

But it isn't obvious that there's a "right" side, especially since Samoa is an island, and doesn't have to coordinate with anyone who can drive to Samoa from somewhere else. (The last country in continental Europe to switch sides--from driving on the left to driving on the right--was Sweden, in 1967.) Here's a nicely written historical account (whose accuracy I can't vouch for): Why do some countries drive on the right and others on the left ?

(I particularly liked their description of the decision in Pakistan: "Pakistan also considered changing to the right in the 1960s, but ultimately decided not to do it. The main argument against the shift was that camel trains often drove through the night while their drivers were dozing. The difficulty in teaching old camels new tricks was decisive in forcing Pakistan to reject the change.")

The government of Samoa believes that the benefits of switching will come from enabling Samoans to buy used cars from the left-driving Australians and New Zealanders.

But the proposal to switch sides is not without costs, since the current stock of cars has the driver sitting on the left, which will make some things (like passing) harder if traffic is switched to the left side of the road. (And of course the current stock of school buses will have to load and unload children from the middle of the street, instead of from the curb.)

It looks like September 7 might be a good day to avoid the roads, if you happen to be in Samoa. (And here's an earlier post on New Zealand traffic rules .)
*********

Update: Samoa switches smoothly to driving on the left
"Samoa is the first country in decades to change the direction of traffic. Iceland and Sweden did it in the 1960s, and Nigeria, Ghana and Yemen did it in the 1970s."

Ecclesiastical Insurance

Before you read this post, what do you think Ecclesiastical Insurance insures against? (It turns out to have more to do with hot lead than with lost souls...)



The Church of England is under attack, and not just from the usual schismatics. Here's the story: Church of England fights fiddlers on the roof


"THE Church of England is using nanotechnology – the science of very small things – to fight thieves who strip lead and other valuable metals from the roofs of its ancient buildings.
More than 30,000 of Britain’s 44,000 churches have had their roofs coated in a layer of “nanopaint”, which is visible only under ultraviolet light.
Each church has a different blend of microscopic particles, giving its metal a unique “label”. This enables police to identify church lead found in any haul of suspect scrap, even if it has been melted down."
...
"Recently, church authorities scored a victory in the battle against thieves with the conviction of three men for stealing lead from the roof of St Leonard’s church in Colchester, Essex.
They were caught after police identified the lead stolen from the church on sale at a scrapyard by using the new labelling system."
...
"The number of insurance claims for metal thefts from churches has risen from just 12 in 2002 to more than 2,500 last year – attacks described by Peter Walley, chaplain to the bishop of Lichfield, as “the biggest asset-stripping of churches since the dissolution of the monasteries”."
...
"The demand for scrap is driven by world prices. Those for lead and copper soared to record levels last year with scrap lead peaking at £1,300 a ton. Metal prices fell when the recession hit, but are now picking up again strongly.
Most churches are insured by Ecclesiastical Insurance, which is so concerned at the losses that it recently sent every church a SmartWater kit and warned vicars and bishops it would pay out no more than £5,000 if they failed to use it on their roofs.
A spokesman for Ecclesiastical Insurance said metal theft had become the number one reason for claims. "

What if they ran an auction and nobody came?

David Fahrenthold writes in the Washington Post about Maryland's unsuccessful attempt to buy back some crab fishing licenses via an auction:
To Some Chesapeake Crabbers, a $50 Document Is Priceless
"Despite Industry's Woes, Many Watermen Refuse to Sell Symbol of Old Way of Life"

Apparently the licenses have value even to those who don't currently use them to catch crabs. The right to take crabs is what makes you a waterman...

Investing in law suits

"To press a suit" means something different to a tailor and to a lawyer. Now investors are getting involved too.

Investing in Lawsuits, for a Share of the Awards
"A small but growing number of investors are exploring this idea, helping companies avoid some of the risks and costs of litigation in exchange for part of any money paid out when the case is settled or resolved by a court."

This reflects some broader changes in the law biz, somewhat related to developments in patent and class action law.

Regarding patents, firms that invest in patents with an eye towards making money from infringement law suits are known by those who dislike them as patent trolls (see here, too). There is both an offensive and a defensive part of that business, and both attract investors, see e.g. Trolling for Patents to Fight Patent Trolls.

Another kind of lawsuits that involve investors are class action suits. Here the investors are often a consortium of law firms that can pool otherwise unbillable hours to devote to a large speculative project that will only pay off in case of a favorable decision or settlement. The theory behind class action is that it should allow the law to bear on malefactors who might harm many people, but each too little to justify the expense of an individual lawsuit. (E.g. a supermarket chain that systematically overcharged everyone twelve cents might eventually be found liable to pay damages to a large class of consumers. If you noticed them doing this, you wouldn't be able to interest a law firm in representing you as an individual plaintiff, but might be able to interest a firm in representing the whole class.) Class action law envisions the firms as responding to claims presented by plaintiffs, and a plaintiff who claims harm is needed to bring the case. But there's a big advantage to being the first firm (or consortium) to bring a class action law suit, since the originating law firms get to represent the whole class of plaintiffs. So there's a temptation for an entrepreneurial firm to go out and hire some plaintiffs, which is against the law. One of the biggest class action firms fell to this temptation: Class-Action Firm Agrees to Pay $75 Million to Settle Kickback Case

HT: Benjamin Kay, an econ grad student at UCSD

Automated spam blog detection

Woke up this morning to find this on my blog dashboard:

"This blog has been locked due to possible Blogger Terms of Service violations. You may not publish new posts until your blog is reviewed and unlocked.
This blog will be deleted within 20 days unless you request a review."

And this in my email:
"Your blog at: http://marketdesigner.blogspot.com/ has been identified as a potential spam blog. To correct this, please request a review by filling out the form at http://www.blogger.com/unlock-blog.g?lockedBlogID=4748060798655400108

Your blog will be deleted in 20 days if it isn't reviewed, and your readers will see a warning page during this time. After we receive your request, we'll review your blog and unlock it within two business days. Once we have reviewed and determined your blog is not spam, the blog will be unlocked and the message in your Blogger dashboard will no longer be displayed. If this blog doesn't belong to you, you don't have to do anything, and any other blogs you may have won't be affected.

We find spam by using an automated classifier. Automatic spam detection is inherently fuzzy, and occasionally a blog like yours is flagged incorrectly. We sincerely apologize for this error. By using this kind of system, however, we can dedicate more storage, bandwidth, and engineering resources to bloggers like you instead of to spammers. For more information, please see Blogger Help: http://help.blogger.com/bin/answer.py?answer=42577

Thank you for your understanding and for your help with our spam-fighting efforts.

Sincerely,

The Blogger Team"

Let's see if I can publish this. (Update: it looks like I can still publish, but have to interpret a captcha to show I'm probably human...)

Further update: how could Google's automatic spam blog detector be improved? Well, Google offers a lot of tools for reading blogs. Some fraction of my regular readers apparently read Market Design on Google Reader, since it reports 858 subscribers when I checked just now. (You can check too, or subscribe, by going to Google Reader and typing "market design" after clicking on the + box next to "add a subscription." You aren't committed at that point, but you can see the feed, and the number...)

So, a thought for the humans who program the automatic spam detector: check if spam blogs have fewer subscribers than real blogs, and, if so, include that in the next version of the algorithm.

Identifying desirable spouses

Empirical researchers who use matching models to study matching markets such as marriage are often faced with the difficulty that they can observe the results of the market--e.g. who marries whom--but not the intermediate choices that produced these matches (such as who courted whom, who proposed and was rejected, etc.). One approach is to look for particular markets in which such additional data can be found (as in these studies in India, the U.S., and Korea). Another is to develop statistical tools to infer the missing data, e.g. about the preferences of men and women, from the readily observable outcomes.

A NBER working paper that takes this latter approach is Identification in Matching Games, by Jeremy T. Fox - http://papers.nber.org/papers/W15092.

Here's the first paragraph from the introduction:
"Matching games are a new and important area of empirical interest. Consider the classic example of marriage. A researcher may have data on a set of marriages in each of a set of independent matching markets, say a set of towns. The researcher observes characteristics of each man and each woman in each town, as well as the sets of marriages that occurred. The researcher observes equilibrium outcomes, here marriages, and not choice sets, so identification in this type of model will not be able to rely trivially on the analysis of single-agent demand models. What type of parameters can be identified from these data?"

And here's the formal abstract:
Abstract: I study a many-to-many, two-sided, transferable-utility matching game. Consider data on matches or relationships between agents but not on the choice set of each agent. I investigate what economic parameters can be learned from data on equilibrium matches and agent characteristics. Features of a production function, which gives the surplus from a match, are nonparametrically identified. In particular, the ratios of complementarities from multiple pairs of inputs are identified. Also, the ordering of production levels is identified.

The market for bulk commodity shipments

The transport of bulk commodities by sea is a business that depends on matching loads to ships. When times are good, ships may be fully booked, and costly, and when times are bad ships may be available and cheap.

"The Baltic Exchange is an association of ship owners, and has a long and colorful history. Because shipping prices are an indicator of the general economy, the Baltic Exchange Dry Index, which measures the cost of hiring a big ship, is a leading indicator of commodities trading in particular and of economic activity in general.

As recently adjusted, the components of the index are indices for different kinds of shipping, in order of cargo capacity: Capesize (too big to transit the Suez canal, so have to go around), Panamax (the maximum size ship that can go through the Panama canal), Supramax, and Handysize.

Hotel rooms and discounts

I just received an ad by email for a prizewinning hotel in Boston. When I went to their website, I found that their seasonal room rate for a weekday in late September for two adults is $285.00 Their site also makes it easy to check the special rates they give to those who are members of the AAA, AARP, and the U.S. Government. For the same day and same room, those rates were, when I checked, respectively, $355.50, $355.50, and $306.00 . Gotta love that government discount.

Factoring

If you do a google search on "factoring," the first few organic results are on factoring numbers, but the ads are all about factoring receivables. Factors (in this sense of the word) are firms that lend cash to businesses, on the strength of their accounts receivable. It used to be (and still largely is) a relationship business; one factor would handle all of a firm's receivables.

The Street.Com has an article on the new face on the block, The Receivables Exchange , which is set up around the idea of letting firms borrow from individual investors on the strength of particular accounts receivable: Cash-Strapped Firms Sell Unpaid Accounts.

"Cash flow has become a leading concern for small firms as banks reduce credit lines, shorten maturities and raise rates, according to a May study by the Credit Research Foundation. Among the companies surveyed, 45% said the financial crisis was straining their access to working capital. Almost 70% reported a slowdown in customer payments, and 61% said their top priority was to boost cash flow by getting clients to pay what they owe faster.
The Receivables Exchange (TRE), which runs an online auction market for accounts receivable, is benefiting from these trends. More companies have been turning to the two-year-old firm to raise money as traditional credit sources dry up.
"We take the most liquid of the assets on the balance sheet that they can modify and allow those to trade on a transparent, standardized exchange," says Nicolas Perkin, president of the New Orleans-based company.
With TRE's online system, which one might describe as an eBay... for factoring, sellers post eligible receivables and set sale parameters, such as the duration of the auction, the minimum advance payment and the maximum fee they will pay.
Buyers, such as commercial banks and hedge funds, browse for accounts to bid on and post profiles indicating their preferences. Sellers can leave the auction open-ended or set a "buyout price" that allows a buyer to immediately snap up the accounts.

TRE has almost $20 billion of liquidity up for grabs. The average seller is looking to unload $65,000 of accounts receivable. The average auction lasts one day, with the shortest clocking in at less than a minute. The company has a 99% completion rate, with upwards of 85% selling at the buyout price. About 86% of users are repeat customers. "

I've written about TRE before, here and here.

Update: Steve Leider points me to this Marketplace Whiteboard video explaining Factoring, inspired by the recent troubles of CIT, a big factor.

U.S. black market for kidneys, continued

The AP takes up the story of a man who says he sold his kidney in NY for $20,000, and who posted a video on the web. Here's the publication of the story by MSNBC, which includes the video: Man says he sold kidney in U.S. for $20k. (The video isn't full of information, but the kidney content begins just after minute 5.)

"In 2005, a rebellious and sporadically employed Israeli man flew to New York to give up a kidney to save an American businessman. For that, he says he was paid $20,000, which appeared in a brown envelope on his hospital bed after the operation.
...
"Rosen believes he did a good deed and that organ donors like him should be compensated. Much of his story can be confirmed, and the case gives new resonance to claims that a black market for kidneys has thrived even in the United States."

Here's my earlier post on Black market for kidneys: in the US? , and here's the long list of posts on compensation for donors generally.

HT: Katy Milkman at Wharton

Bob Aumann speaks in SA about game theory and market design

Bob Aumann has been lecturing in South Africa, and speaking about game theory as the foundation of market design, South Africa's Business Day reports: Game theory has a host of practical applications .

"Aumann thinks moving from game theory to game engineering will help us. Theory can be used to design practical interactive systems — the US auctions being a good example. But he says governments in particular must understand the power of incentives to drive economic and political actors, and work towards creating systems that get the best from them."

Licensing of Lawyers and Doctors and some more surprising professions

Can it be that Texas has only 22 licensed matchmakers?
(But 73 licensed ringside physicians?)
You can search Texas licenses by type here , in a drop down menu that starts with airconditioning contractors and ends with water well drillers, with matchmakers and many others in between.

Licensing plays a big role in the regulation of some markets, and not just the markets you would suspect, like those for doctors and lawyers. Some of the questions that come up in the licensing biz can be gleaned from the url's of the decisions they generate, like this one: http://www.license.state.tx.us/cosmet/cosmet.htm#eyelashes .
(That's from the Statement from TDLR about applying false eyelashes, eyelash tabbing and eyelash extensions and whether a person must hold a cosmetology license in order to perform these procedures.)

And, since you asked, here's the Texas ruling on fish pedicures.

Across state lines, there's some uniformity in how doctors and lawyers are treated, although not so much that moving from state to state is always easy. And there are some notable differences between doctors and lawyers.

Q. In how many states can a new medical school graduate be licensed to practice medicine right after passing the necessary exams (i.e. before doing at least one year of supervised clinical experience as a resident)?

A. Zero (although no information is available at this time on the Solomon Islands and the Northern Marianas, see State-specific Requirements for Initial Medical Licensure compiled by the Federation of State Medical Boards.

Q. In how many states can a new law school graduate be licensed to practice law after passing the necessary exams?

A. In all of them, unless I'm badly misreading the Comprehensive Guide toBar Admission Requirements 2009, published by the National Conference of Bar Examiners.

Q. What do Mississipi, Missouri, Texas and the Northern Marianas Islands have in common?
A. Those are the American jurisdictions in which a felony conviction is an automatic bar to admission to the legal bar, according to "CHART II: Character and Fitness Determinations" in the link above. (That doesn't mean felons get a free pass in other jurisdictions, just that their disqualification isn't categorical and automatic. E.g. in Florida, a felony conviction is "Not an automatic bar, but restoration of civil rights is required.")

Health care as a protected transaction

President Obama makes the case that health care, and health insurance, should be protected transactions (and that some existing insurance practices are repugnant):

"Our reform will prohibit insurance companies from denying coverage because of your medical history. Nor will they be allowed to drop your coverage if you get sick. They will not be able to water down your coverage when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or in a lifetime. And we will place a limit on how much you can be charged for out-of-pocket expenses. No one in America should go broke because they get sick. "

From Why We Need Health Care Reform by Barack Obama

Paul Romer on market design

Paul Romer, at Charter Cities, thinks of market design as part of the economics of ideas, in his post on Fish Proverb v2.0 (Bringing in Rules):

"Most of the work on the economics of ideas has focused exclusively on a subset of ideas, technologies. Economists have been slower to acknowledge the complementary set of ideas, rules. "

Market for household staples

Just as the pattern of demand for textbooks differs from demand for other books, household staples have a different pattern than other goods. While peaches may only sometimes be in season, lightbulbs always are, and perhaps your regular shopping needs can be met by a specialized service.Here's a story: Alice.com Grasps the Woes of Buying Toilet Paper . Here's the site: http://alice.com/

Indian court decriminalizes gay sex

Another court, in another democracy, finds that an ancient repugnance violates another constitution: Indian court decriminalises gay sex.

"An Indian court has ruled for the first time that consensual gay sex is not a crime, in a breakthrough for Aids campaigners and the country’s largely closeted homosexual community. "
...
"“Consensual sex amongst adults is legal which includes even gay sex,” said a two-judge bench after considering a petition against the law. "

Where it's illegal for prostitutes to give massages

The complicated legal situation in Rhode Island makes indoor prostitution legal, but requires masseurs to be licensed, so prosecutors "brought charges against alleged brothels for performing unlicensed massages."

This from a story by Sarah Schweitzer in today's Boston Globe, Many seek ban as prostitution thrives in R.I..

The debate over whether to change the law and (re)criminalize indoor prostitution is revealing, and suggests some of the complexities underlying repugnance to prostitution.

"Prostitution has flourished in Rhode Island, and the state has the distinction - a dubious one, many say - of being the only state in the nation to permit what is often referred to as indoor prostitution, a phrase that distinguishes it from streetwalkers’ solicitations. (In Nevada, the practice is permitted only in certain counties.)
Legislators have repeatedly proposed banning all prostitution in the state, without success. Yet, as the number of spas has exploded in recent years, pressure has mounted for change. This year, both the House and the Senate passed separate antiprostitution bills. Legislative leaders are now trying to hammer out a compromise with the backing of Governor Donald Carcieri."

"Leaders of the push to ban indoor prostitution say Rhode Island is encouraging a dangerous profession, and embarrassing itself in the process.
...
"In addition to support from Carcieri, Giannini’s bill has won backing from Bishop Thomas J. Tobin of the Roman Catholic Diocese of Providence and state Attorney General Patrick Lynch."

"Opponents also have a broad spectrum of support, including local chapters of the American Civil Liberties Union and the National Organization for Women, and a group of academics from around the globe who recently penned an open letter to the Rhode Island Legislature saying that, “compared to street workers, women and men who work indoors generally are much safer and less at risk of being assaulted, raped, or robbed.’’ "

Rakesh Vohra on Indian higher education

Rakesh Vohra doesn't hesitate to call 'em as he sees 'em in his post on Signaling and Indian Higher Education.

"...India offers only three varieties of higher education.
First, low price and low quality for a select few. These are the IIT’s and the IIM’s. In India there is a quaint belief that these handful of institutions are `world class’. Apart from some isolated departments, this is not true. This assertion will generate a response. So, let me lay on the kindling. It is doubtful if many of the faculty at these institutions would find employment in any top 20 university in the states. Note the implicit assumption in this arrogant statement: quality of faculty research is positively correlated with the ability to produce men and women qualified to `hold dominion over palm and pine’. I’ll get back to this later.
Second, high price and low quality offered by private institutions; here one pays for infrastructure. If one must attend college, it might as well be pleasant. So, tennis courts, air-conditioned class rooms etc.
Third, low price and zero quality for the rest. These are the government run Universities bedeviled by student strikes and chronic faculty absenteeism."

British professions

The London Times reports on a British government report on the socioeconomic background of new lawyers, doctors, journalists, and accountants: Top professions 'operate closed shop to exclude the poor'

"Law, medicine and other professions have become more exclusive in the past 30 years, drawing recruits from better off, middle-class families, a government report has found.
Other former trades, such as journalism, have evolved into “modern professions”. They are increasingly colonised by middle-class graduates and offer fewer opportunities for young people with lesser qualifications to get a foot on the ladder.
Barriers to all professions, traditional and modern, have also sprung up — most notably internships — making it even more difficult for children from poor backgrounds with few connections to break in.
The report on access to the professions was commissioned by Gordon Brown and written by Alan Milburn, the former Health Secretary. He said traditional and modern professions had a “closed shop” mentality, blocking mobility and shutting their doors to children from poorer backgrounds."
...
"Professions should also be obliged to report to ministers on how they offered internships. In recent years these unpaid and often lengthy periods of work experience have become the gateway to the best jobs. Mr Milburn said that too often such placements depended on who you knew.
The report revealed that the law is the most exclusive profession. Lawyers who entered the profession in the 1990s typically grew up in families with incomes 64 per cent above average. Those starting out in the 1970s came from homes with incomes 40 per cent above average. Three quarters of judges and two thirds of top barristers are privately educated. “Modern professions”, such as journalism, are not far behind, with degrees and even postgraduate qualifications and an internship now the norm for entry.
Most journalists and broadcasters are from wealthy families and more than half have been privately educated. Forty years ago, only a tiny proportion of journalists were from privileged backgrounds and most worked their way up.
Accountancy is another new preserve of the middle classes. Forty years ago accountants starting work came from families on average incomes but 20 years later in the 1990s, accountants came from families on incomes 40 per cent above average. "

Paying for unpaid work: Market for internships, continued

When "experience" is necessary for a new job, acquiring experience is worth paying for. In an earlier post, I wrote about paying for unpaid internships in Britain, and now a very well written story by Gerry Shih in the NY Times outlines similar developments in the U.S.: Unpaid Work, but They Pay for Privilege. I quote his story at length below, with the kicker being the last paragraph quoted:)

"With paying jobs so hard to get in this weak market, a lot of college graduates would gladly settle for a nonpaying internship. But even then, they are competing with laid-off employees with far more experience.
So growing numbers of new graduates — or, more often, their parents — are paying thousands of dollars to services that help them land internships.
Call these unpaid internships that you pay for.
“It’s kind of crazy,” said David Gaston, director of the University of Kansas career center. “The demand for internships in the past 5, 10 years has opened up this huge market. At this point, all we can do is teach students to understand that they’re paying and to ask the right questions.” "
...
"Andrew’s parents used a company called the University of Dreams, the largest and most visible player in an industry that has boomed in recent years as internship experience has become a near-necessity on any competitive entry-level résumé.
The company says it saw a spike in interest this year due to the downturn, as the number of applicants surged above 9,000, 30 percent higher than in 2008. And unlike prior years, the company says, a significant number of its clients were recent graduates, rather than the usual college juniors."
...
"But many educators and students argue that the programs bridge one gulf — between those who have degrees from prestigious colleges or family connections and those who do not — only to create a new one, between the students who have parents willing and able to buy their children better job prospects and those who do not.
“You’re going to increase that divide early, on families that understand that investment process and will pay and the families that don’t,” said Anthony Antonio, a professor of education at Stanford University. “This is just ratcheting it up another notch, which is quite frightening.” "
...
"The industry dismisses the criticism.
“Universities forget that they themselves are, in essence, businesses,” said C. Mason Gates, the president of Internships.com, an online placement service. “Just because they’re doing it in a nonprofit fashion doesn’t mean that those of us doing it for profit are doing it incorrectly.”"

Secondary market for prescriptions: a privacy-repugnant transaction

The information on your drug prescriptions, including your name, can be bought and sold, reports Milt Freudenheim in the NY Times: And You Thought a Prescription Was Private

"... prescriptions, and all the information on them — including not only the name and dosage of the drug and the name and address of the doctor, but also the patient’s address and Social Security number — are a commodity bought and sold in a murky marketplace, often without the patients’ knowledge or permission.
That may change if some little-noted protections from the Obama administration are strictly enforced. The federal stimulus law enacted in February prohibits in most cases the sale of personal health information, with a few exceptions for research and public health measures like tracking flu epidemics."
...
"Selling data to drug manufacturers is still allowed, if patients’ names are removed. But the stimulus law tightens one of the biggest loopholes in the old privacy rules. Pharmacy companies like Walgreens have been able to accept payments from drug makers to mail advice and reminders to customers to take their medications, without obtaining permission. Under the new law, the subsidized marketing is still permitted but it can no longer promote drugs other than those the customer already buys. "

Loss of privacy, particularly medical privacy, is a negative externality to some transactions that is increasingly seen as making them repugnant.

Gestation and the marriage market: second child still takes nine months

How long (after marriage) it takes for the first child to arrive is determined by many complex things, but the marriage market in Japan is evolving in a direction that shortens the time: Shotgun weddings on rise in Japan as attitudes to pregnancy shift.

"“From about five years ago the number of dekichatta-kon [weddings due to pregnancy] that we handle has not stopped rising,” she said. “Last year we worked out that about a quarter of the brides we worked with were pregnant, and some were about eight months along when they tied the knot.
“The couples used to be embarrassed, and our job was to try to hide the fact from the families. Now everyone is so relaxed about it we try to turn it into a double celebration and make life as easy as possible for the mother-to-be.”
...
"The shift reflects changing attitudes in Japan. The historic taboo of pregnancy outside marriage was largely abandoned during the 1990s but a strong tradition of being married by the time of the birth remained.
By 2004, however, the national average of ten months between marriage and the birth of a first child had fallen to six. "

A Toolbox for Economic Design by Dimitrios Diamantaras et al.

A new book on mechanism design theory, with a deep bow in the direction of practical market design, and a modern choice of topics (including the original mechanism design work on Kidney Exchange).

I haven't held it in my hands yet, but you can get a surprisingly good idea of the coverage by using the search function on the Amazon site:

A Toolbox for Economic Design by Dimitrios Diamantaras, Emina I. Cardamone, Karen A. Campbell Campbell, and Scott Deacle (Hardcover - March 31, 2009)

Fertility tourism and the British ban on paying egg donors

The fertility treament covered by Britain's National Health Service causes many Britons to seek treatment privately, elsewhere in Europe, the London Times reports: 'Thousands of Britons' travel abroad for IVF, research finds.

"Restricted access to fertility treatment on the NHS, the high cost of private therapy at domestic clinics and a serious shortage of donated eggs are driving couples to visit overseas clinics for help in starting a family. "
...
"IVF patients who need donated eggs are particularly likely to travel. Domestic donors are in short supply because of the removal of anonymity and tough rules against selling eggs.Spain and the Czech Republic are prime destinations, due to laws allowing donors to be paid €900 (£765) and €500 respectively for eggs. British donors get no more than £250 in expenses. "

Now the ban on payment for eggs is being reconsidered:

Pay donors to end the shortage of IVF eggs, says watchdog
"A longstanding ban on selling sperm and eggs should be reconsidered to address a national shortage of donors, the head of the Government’s fertility watchdog says. Payments to donors could cut the number of childless couples travelling abroad for treatment, Lisa Jardine, of the Human Fertilisation and Embryology Authority, told The Times. The removal of anonymity for donors in 2005 and strict rules against payments have provoked a crisis in fertility treatment, forcing many couples to wait years for the therapy they need to start a family. A recent study showed that access to eggs and sperm was the main reason why hundreds of British couples became “fertility tourists” each month."
...
"Her move will raise concerns about a market in human tissue and exploitation of women as egg donation is invasive and involves an element of risk. In countries that allow payment, such as the United States, Spain and Russia, young women often donate to wipe out debts or to fund university fees. Professor Jardine said that the law already treated eggs, sperm and embryos differently from other tissues, so there was no danger of setting a precedent for the sale of organs such as kidneys. Payment would also ensure that more women were treated in licensed domestic clinics, rather than in countries with less stringent regulations. “I’m not saying the decision arrived at before I became chair wasn’t the right one at the time,” she said. “But given the evidence that egg shortage is driving women overseas, I feel a responsibility to look at it again.” "

Mixed marriage bonus in Iraq

Iraq: $2, 000 for Shiite-Sunni Couples Who Marry

"Talib and his wife are among more than 1,700 newlywed couples who have accepted cash from a government program that encourages Sunnis and Shiites to tie the knot. The government has held 15 mass weddings for inter-sect couples from all over Iraq... While the Iraqi government doesn't track marriages bridging the two major Muslim sects, experts say mixed couples are on the rebound after a dramatic decline during the days of heavy violence. ...

"As security has improved, Iraqis are returning to their homes in mixed neighborhoods and spending more time at offices, universities and other places where they meet their future spouses, said Shiite cleric Sayyid Ahmed Hirz al-Yasiri in Baghdad's Shiite stronghold of Sadr City.
''There was a time when families were reluctant to consent to such marriages because of concerns created by certain conservative people from both sects,'' he said. ''That is over now and things are getting back to normal, like they were before the fall of Baghdad. "