Friday, June 10, 2011

2nd LeeX International Conference on Theoretical and Experimental Macroeconomics

PROGRAM                        




Friday, June 10
9:00-9:15                Opening Remarks, John Duffy
9:15-10:00              "The Economics of Money Illusion"
                              Keynote Speaker, Jean-Robert Tyrann (Vienna University)
  
10:00-10:45            "Sticking to Prices? - Behavioral Differences in Price Setting"
                               Emma Svensson (Lund University)

10:45-11:15          Coffeebreak

11:15-12:00            "Gift Exchange versus Monetary Exchange: Experimental Evidence"
                              John Duffy (Pittsburgh University)

12:00-12:45            "The Coordination Value of Monetary Exchange: Experimental Evidence"
                              Marco Casari (University of Bologna)
  
12:45-14:30              Lunch

14:30-15:15           "Technology, Wage Dispersion and Inflation"
                             Shoujian Zhang (Vienna University)

15:15-16:00            "Explaining Rigidities in the Housing Market: Is Loss Aversion at a Loss?"        
                              Florent Buisson (University Paris 1 Pantheon-Sorbonne)

16:00-16:30            Coffeebreak

16:30-17:15           "Self-control Preferences and Fiscal Policies: A Quantitative Analysis in a Life
                                    Cycle Model"      
                             Cagri Kumru (Australian National University)   

17:15-18:00            "Market-Based Corrective Actions: An Experimental Investigation"              
                             Oleg Korenok (Virginia Commonwealth University)
  
20.30                          Dinner         




Saturday, June 12
9:00-9:45                "Bubbles and Monetary Policy"
                               Keynote Speaker, Jordi Gali (Universitat Pompeau Fabra)


9:45-10:30               "Frictions, Persistence, and Central Bank Policy in an Experimental Dynamic Stochastic
General Equilibrium Economy"
                               Charles Noussair (Tilburg University)
  
10:30 -11:00            Coffeebreak

11:00-11:45           "Heterogeneous Expectations in Monetary DSGE Models"       
                             Domenico Massaro (Univeristy of Amsterdam)

11:45-12:30            "Inflation Expectations and Behavior: Do Survey Respondents Act on their Beliefs?"
                              Olivier Armantier (NY Federal Reserve Bank)

12:30-14:30               Lunch

14:30-15:15            "Inflation Expectations and Monetary Policy Design: Evidence from the Laboratory"        
                              Damjan Pfajfar (Tilburgh University)      

15:15-16:00            "The New Keynesian Phillips Curve with Myopic Agents"
                              Michael Ross (Bochum University)

16:00-16:30             Coffeebreak

16:30-17:15           "Information acquisition in a speculative attack: Theory and Experiments"
                            Isabel Trevino (NY-University)

17:15-18:00           "Are Sunspots Learnable in a General Equilibrium Model"
                            Jasmina Arifovic (Simon Fraser University)
  
  



Organizers: John Duffy, Frank Heinemann, and Rosemarie Nagel

Thursday, June 9, 2011

Misc. repugnant transactions: marijuana, camel meat, and concealed carry on campus

The Maastricht ban on selling marijuana to foreign tourists is spreading to the rest of Holland:
Dutch govt to ban tourists from cannabis shops (HT Bettina Klaus)
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A little-noticed move by American Express to ban the purchase of medical marijuana with its credit cards has reignited a longstanding debate: How much can a credit card company control what you buy?
        To the surprise of consumers, major credit card companies are making decisions about what they can and can't buy with their credit cards. What's off-limits? Legal purchases like gambling chips and donations to at least one controversial non-profit organization; in some cases, buying pornography is also restricted, and so, increasingly, is medical marijuana. Last month, shortly before Delaware became the 16th state to legalize medical marijuana, American Express told merchants that its cards could not be used to buy it.
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Good news for camel meat lovers: The Knesset's Defense and Foreign Affairs Committee annulled various outdated regulations Monday, including a longtime ban on the sale of camel meat. (HT Assaf Romm)
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And those of you looking forward to concealed carry on campus will have to wait a bit longer, even in the Lone Star State:
State legislators in Texas could not meet Monday's end-of-session deadline to pass a bill that would have allowed people to carry concealed weapons on campus -- meaning a win for higher education leaders, who almost uniformly opposed the legislation.

Wednesday, June 8, 2011

Harvey Mansfield on game theory

My Harvard colleague Harvey Mansfield writing in the WSJ about "Sociology and Other 'Meathead' Majors"  has this to say about economics and game theory:

"Others try to imitate the sciences and call themselves "social scientists." The best imitators of scientists are the economists. Among social scientists they rank highest in rigor, which means in mathematics. They also rank highest in boastful pretension, and you can lose more money listening to them than by trying to read books in sociology. Just as Gender Studies taints the whole university with its sexless fantasies, so economists infect their neighbors with the imitation science they peddle. (Game theorists, I'm talking about you.)"
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In a weak moment, I sent him the following email:

Dear Professor Mansfield: I read with interest your recent WSJ article.  It looks like it was fun to write.

I noticed that you particularly called out game theorists (of which I am one).
Since you take a long view, I couldn’t help but wonder if your appreciation of game theory was in any way influenced by the most recent developments, of the past two decades, in which game theory has become (as the sociologists would say) “performative,” through market design.

In case they might be of interest, below are two links, the first to a non-technical paper written for economists, and the second to an easier to read Boston Globe article covering some of the same ground.  (My view is that we game theorists are better grounded than we used to be, or than might have been apparent even twenty years ago…)

Here’s the survey article:
Roth, Alvin E. "What have we learned from market design?" Hahn Lecture, Economic Journal, 118 (March), 2008, 285-310.

And here’s the Globe story, from April 3, 2011:

Cheers,

Al Roth
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this led to the following reply (and permission to publish it here)

Dear Professor Roth,


Thank you for introducing yourself.  


One sign of being a science is having to write non-scientific communications of it.  My forays in the WSJ etc are merely shorter than the longer stuff.


I suppose game theory from the first, and perhaps like all science these days, has practice implied in the theoretical statement.  But the goal is ambiguous in game theory.  Is it for the purpose of conflict resolution, as with T. Schelling, or is it to teach people to be more strategic, less moralistic, in their daily living?  Perhaps both, the latter as means to the former. But then you have the goal of a peacenik or a Buddhist and the manners of a calculator or a crook.


I hope we meet sometime,


Yours,  Harvey Mansfield
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I replied that one goal of market design is to produce institutions that make it easier for people to achieve their goals straightforwardly...


Tuesday, June 7, 2011

Unpaid Internships

Bookforum has a thoughtful review by Roger Hodge of
Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy by Ross Perlin

"According to Ross Perlin, the author of Intern Nation, the rise of this relatively new employment category, which is taken for granted by everyone from the antiunion governor of Wisconsin to the managers of Barack Obama’s reelection campaign, is a clear indication of the decline of labor rights in the United States.
...
"The College Employment Research Institute estimates that 75 percent of college students do at least one internship before graduation. ...nowadays, interns are everywhere, in publishing, merchandising, insurance, finance, consulting, law, engineering, and the defense industry. It seems that most large corporations pay their interns, but the number of unpaid jobs in the economy is booming. ...Based on his reporting, Perlin estimates that one to two million Americans work as interns every year, though he suspects that this number might be on the low end. Most interns are students or recent graduates, and large numbers, perhaps 50 percent overall, work for free. Worse, many actually pay tuition for the privilege of working, as a result of the common misconception on the part of both universities and employers that the bestowal of academic credit somehow nullifies the strictures of the Fair Labor Standards Act (FLSA) of 1938, which prohibits uncompensated labor except under carefully defined circumstances. Academic programs, both undergraduate and graduate, have increasingly adopted the internship as a degree requirement. Such requirements foster an economy of scarcity among the most prestigious internship programs... Highly coveted internships at places like Vogue magazine have recently been auctioned off for as much as $42,500; Perlin notes the irony that this obscene sum was raised for the benefit of the Robert F. Kennedy Center for Justice and Human Rights. Apparently, no one was troubled by the contradiction.
...
"Unpaid internships function as a class filter, ensuring that the children of the affluent and well connected are overwhelmingly represented in our elite cultural institutions. In addition to politics and journalism, the internship model predominates in the art world, book publishing, Hollywood, television, the music business, and many other industries that were traditionally prolabor. Increasingly, even public school teachers, who do not enjoy particularly high wages or status in our society, work as “student teachers” before gaining permanent positions. The basic issue, which is well articulated by Perlin, is that offering or being compelled to work for free is a paradigmatic example of an unfair labor practice; it creates a toxic race to the bottom as ever more desperate workers compete with one another to drive wages down. The internship economy demonstrates that wages, like interest rates, are capable of dropping to less than zero.

"Perlin recognizes that illegal, unpaid internships can lead to paying jobs. But to respond, as I might have before reading this vigorous and persuasive book, that working without pay for a few months can be an excellent investment is to miss the point. Although I no doubt made an economically rational decision many years ago to abandon my doctoral dissertation on Spinoza for an unpaid magazine internship, it would be far better if employment laws were strictly enforced and that valuable on-the-job training were available to those who don’t have a fellowship stipend or some other means of support. The fact that many individuals can point to significant career benefits from their investments in unpaid labor does not touch the larger argument from inequality."

Monday, June 6, 2011

Jack Kevorkian, 1928-2011

I've written before about assisted suicide as a repugnant transaction. Some of the history of the debate in the United States is captured in the life of Dr. Jack Kevorkian, sometimes nicknamed "Dr.Death," who died on Friday.

Dr. Jack Kevorkian Dies at 83; A Doctor Who Helped End Lives

"Dr. Jack Kevorkian, the medical pathologist who willfully helped dozens of terminally ill people end their lives, becoming the central figure in a national drama surrounding assisted suicide, died on Friday in Royal Oak., Mich. He was 83."
...
"In arguing for the right of the terminally ill to choose how they die, Dr. Kevorkian challenged social taboos about disease and dying while defying prosecutors and the courts. He spent eight years in prison after being convicted of second-degree murder in the death of the last of about 130 ailing patients whose lives he had helped end, beginning in 1990."
...
"His critics were as impassioned as his supporters, but all generally agreed that his stubborn and often intemperate advocacy of assisted suicide helped spur the growth of hospice care in the United States and made many doctors more sympathetic to those in severe pain and more willing to prescribe medication to relieve it.

"In Oregon, where a schoolteacher had become Dr. Kevorkian’s first assisted suicide patient, state lawmakers in 1997 approved a statute making it legal for doctors to prescribe lethal medications to help terminally ill patients end their lives. In 2006 the United States Supreme Court upheld a lower court ruling that found that Oregon’s Death With Dignity Act protected assisted suicide as a legitimate medical practice."
...
"In 1984, prompted by the growing number of executions in the United States, Dr. Kevorkian revisited his idea of giving death row inmates a choice. He was invited to brief members of the California Legislature on a bill that would enable prisoners to donate their organs and die by anesthesia instead of poison gas or the electric chair.

"The experience was a turning point. Energized by the attention of lawmakers and the news media, he became involved in the growing national debate on dying with dignity. In 1987 he visited the Netherlands, where he studied techniques that allowed Dutch physicians to assist in the suicides of terminally ill patients without interference from the legal authorities.

"A year later, he returned to Michigan and began advertising in Detroit-area newspapers for a new medical practice in what he called “bioethics and obiatry,” which would offer patients and their families “death counseling.” He made reporters aware of his intentions, explaining that he did not charge for his services and bore all the expenses of euthanasia himself.
...
"He also talked about the “doctrine” he had developed to achieve two goals: ensuring the patient’s comfort and protecting himself against criminal conviction. He required patients to express clearly a wish to die. Family physicians and mental health professionals were consulted. Patients were given at least a month to consider their decision and possibly change their minds. Dr. Kevorkian videotaped interviews with patients, their families and their friends, and he videotaped the suicides, which he called medicides.

"By his account, he assisted in some 130 suicides over the next eight years. Patients from across the country traveled to the Detroit region to seek his help. Sometimes the procedure was done in homes, cars and campgrounds.

"Prosecutors, jurists, the State Legislature, the Michigan health authorities and Gov. John Engler seemed helpless to stop him, though they spent years trying. In 1991 a state judge, Alice Gilbert, issued a permanent injunction barring Dr. Kevorkian from using his suicide machine. The same year, the state suspended his license to practice medicine. In 1993, Michigan approved a statute outlawing assisted suicide. The statute was declared unlawful by a state judge and the state Court of Appeals, but in 1994 the Michigan Supreme Court ruled that assisting in a suicide, while not specifically prohibited by statute, was a common-law felony and that there was no protected right to suicide assistance under the state Constitution.

"From May 1994 to June 1997, Dr. Kevorkian stood trial four times in the deaths of six patients. With the help of his young and flamboyant defense lawyer, Mr. Fieger, three of those trials ended in acquittals, and the fourth was declared a mistrial.

"Mr. Fieger based his winning defense on the compassion and mercy that he said Dr. Kevorkian had shown his patients. Prosecutors felt differently. “He’s basically thumbed his nose at law enforcement, in part because he feels he has public support,” Richard Thompson, the prosecutor in Oakland County, Mich., told Time magazine in 1993.

"But on March 26, 1999, after a trial that lasted less than two days, a Michigan jury found Dr. Kevorkian guilty of second-degree murder. That trial came six months after Dr. Kevorkian had videotaped himself injecting Thomas Youk, a patient suffering from amyotrophic lateral sclerosis (Lou Gehrig’s disease), with the lethal drugs that caused Mr. Youk’s death on Sept. 17, 1998."
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Subsequent stories make clear that Dr. Kevorkian was a difficult ally of the 'death with dignity' movement that has mobilized e.g. for the Oregon laws on assisted suicide: A Polarizing Figure in End-of-Life Debates

Sunday, June 5, 2011

ec11: 12th ACM conference on electronic commerce, June 5-9

Here is the program for the Electronic Commerce conference, June 5-9 in San Jose.
Lots of econ, market design, and game theory.

And here is the schedule of tutorials, including

Monday, June 6, 2011, Half-Day Tutorial:, 8:30 - 11:20 AM
T3: Matching and Market Design,
Tutor: Itai Ashlaghi (MIT), Alvin Roth (Harvard University) and Fuhito Kojima (Stanford)

Saturday, June 4, 2011

Further followup on school choice in San Francisco

My Thursday post, Followup on school choice in San Francisco, has generated some followup on its own, in the form of an audio interview yesterday of School Board member Rachel Norton by Stan Goldberg who follows the SF school system under the name Senior Dad.  He summarizes the interview as "Straight answers from Commissioner Norton “because people have a right to know”."

The issue is whether the algorithm adopted by the board last year was in fact implemented correctly by the district staff. It's an important question because the correctly implemented algorithm would be strategy proof, and if parents had confidence in this it would vastly simplify the school choice system from parents' point of view.

Here is my very incomplete and possibly imperfect transcript to give the flavor of the last 5 minutes of the interview (starting just after minute 39) in which Stan Goldberg (SG) raises this issue, and Rachel Norton (RN) replies. It's worth listening to.

SG “The school district was supposed to release the algorithm they were assigning students on, and so far they have not released that algorithm.”

RN “you’ve been reading Al Roth’s blog” ...“I’ve advocated for that, and will continue to advocate for that. I don’t think the staff right now wants to do that. [laughter] But short of 5 votes, 4 votes, they don’t have to.
SG ‘why should the public trust the school district?  “I’ve had the deputy Superintendent say ‘you guys shouldn’t trust us, we haven’t been reliable’. He said that; I believed him.”

RN “I don’t know what to tell you Sam, I think we should release the algorithm, and I’ve said that to staff, I’ve said that to the Superintendent”…short of 3 other board members joining with me and demanding that it be released the superintendent can do what he thinks is best,  unless he’s ordered by the board to do something else…”

SG “not releasing the algorithm makes everybody think something funny is going on…”
RN” well, not everyone…”

Friday, June 3, 2011

Privacy and Economics

It appears that "privacy and economics" may be an emerging topic in computer science, to judge from a postdoc mentioned on a cs blog I follow:


Differential Privacy Postdoc at UPenn


"We are building a differential privacy group at UPenn! Below is the announcement for a postdoc position in the theory and practice of differential privacy. If you are a theorist who wants to actually put your contributions into practice as well, please apply.

"There will be another announcement soon for another pure-theory postdoc position in the exciting new area of "privacy and economics". Stay tuned, and contact me if you are interested."

Thursday, June 2, 2011

Followup on school choice in San Francisco

My previous post on how school choice is faring in San Francisco was called  School choice in San Francisco: a promise of transparency.  That promise still hasn't been fulfilled.

The idea was that, after the adoption by the school board of a New school choice system in San Francisco, SFUSD decided to implement the new, strategy-proof  "assignment with transfers" choice system itself (San Francisco school choice goes in-house).

School Board member Rachel Norton wrote in a November 9, 2010 blog post that
"Staff did pledge to make the documentation of the algorithm requirements and process flows public by February; I will continue to push to make the assignment algorithm itself open source."

While SFUSD has prepared a number of documents since then, none of them seem to contain a description of the SF school choice algorithm as actually implemented by the staff. All I can find are descriptions of the priorities used for tie-breaking if more children than can be accommodated by a school would otherwise have been assigned there, but no description of the process by which they would have been assigned before tie breaking has to be invoked.

The latest document of that sort, via Rachel Norton's June 1 blog post, is here: Board of Education Policy.
On page 7, under the heading "Method of Allocating Seats," the document states "The SFUSD will replace the diversity index lottery system with an assignment with transfers algorithm that uses school requests from families and the preferences outlined in this student assignment policy."
However the document doesn't describe the assignment with transfers algorithm at all, just the tie breaking priorities.

So...I'm still in the dark about whether SFUSD has actually implemented the choice system the Board adopted, and I bet SF parents and board members are too.
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Wednesday, June 1, 2011

Congestion in online shopping

Too many choices? Subscribe to a shopping service. The NY Times reports:
Sites That Send Shoppers What They Might Like

"JewelMint is one of a new breed of e-commerce sites — which also include Send the Trend, ShoeDazzle, JustFabulous, Sole Society and the upcoming StyleMint — combining old-fashioned and new-fangled methods for luring customers. They present users with a limited selection of jewelry, shoes and accessories by coupling software algorithms that determine personal style with strategies culled from home shopping TV channels and CD-of-the-month clubs.
The sites are the latest example of retailers inventing new ways to shop online. The recent flurry of innovation in e-commerce has also produced private sale sites like Gilt and daily deal sites like Groupon. Like those, these shopping clubs aim to filter the seemingly infinite options online and show a small selection, catered to an individual’s taste.
JewelMint, Send the Trend and ShoeDazzle follow a similar recipe: a fashion celebrity designs or picks the styles (or just attaches his or her name to the project). Shoppers take a style quiz, confiding their go-to nail polish shades and whether they most covet the wardrobe of Nicole Richie or Reese Witherspoon. Each month, the site selects a handful of items and the shopper buys one for a set fee, skips the month, or forgets about it and gets charged that month’s fee, which can be applied to purchases over the next year.
When you type in anything to search on the Internet, it’s almost terrifying the tidal wave of information you get back,” said Kate Bosworth, the actress who is the celebrity face of JewelMint and one of its designers. “The idea of harnessing search for different, sought-after things on the Internet is really the new frontier.”

Tuesday, May 31, 2011

Reverse scholarships reversed at KAIST

A recent article concerning several suicides at the Korea Advanced Institute of Science and Technology pointed out that a high powered incentive system might possibly be implicated.

Elite South Korean University Rattled by Suicides
"Mr. Suh also engineered a system that required students to pay extra tuition for each hundredth of a point that their grade point average fell below 3.0 (based on a 4.3-point system). All students pay a token fee each semester, Kaist administrators said, but otherwise their tuition is free, financed by government scholarships.

"Under the so-called punitive tuition program, a bad semester could cost a student’s family thousands of dollars.

"The program, which was applauded at first, has since led to deep humiliation and anxiety among many students. Those who struggled and lost their full rides suddenly saw themselves as losers. Some critics, calling it ruthless, even blamed the program for the recent suicides."

Monday, May 30, 2011

An Experimental Study of Sponsored-Search Auctions

That's the title of a new paper by Yeon-Koo Che, Syngjoo Choi, and Jinwoo Kim.

Abstract:
We study the Generalized Second Price auctions—a standard method for allocating online search advertising—experimentally, considering both the static environment assumed by the prevailing theory and a dynamic game capturing the salient aspects of real-world search advertising auctions. We find that subjects tend to overbid in both treatments relative to the Vickrey-Clarke-Groves outcome suggested as most plausible by the theory, but that their behavior in the dynamic game resembles the behavior in the static game. Our analysis thus lends support to the use of a static game as modeling proxy, but calls into question the prevailing equilibrium predictions.

Sunday, May 29, 2011

Misc. kidney exchange

A nondirected donor chain that accomplished 3 transplants at Emory, where kidney exchange has been going on since 2009: story and video

Kidney donation kicks off life-saving chain reaction

"In this video, players in this extraordinary transplant exchange tell their story.

You can also watch “The Mother of All Swaps,” a news report from 11 Alive Atlanta"
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The Army embraces kidney exchange: WRAMC again a link in kidney-swap chain

"Last week, surgeons at Walter Reed performed four surgeries involving two couples in a chain of kidney transplant surgeries that began May 5 at hospitals within the National Capital Region — only the second kidney-paired swap in military history.
...
"Walter Reed surgeons participated in the first-ever transplant involved in a kidney swap chain for a U.S. military treatment facility in November. Retired Marine Gunnery Sgt. Joe Pinkowski received a kidney from a donor, and doctors recovered a kidney from his wife, Yolanda, for a patient at another hospital. The surgeries were a part of a record-setting kidney swap involving the couple and 24 other individuals in a series of 26 operations over six days at four hospitals in the region, saving the lives of 13 kidney patients ."
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A three way exchange on Long Island: Three-Way Kidney Exchange Meet for First Time at North Shore University Hospital

"For the first time since North Shore University Hospital established its Kidney Transplant Program in 2007, the transplant team headed by Ernesto Molmenti, MD, the program’s surgical director, and Louis Kavoussi, MD the North Shore-LIJ Health System’s chair of urology, performed a three-way kidney exchange involving donors who were unknown to the recipients until today. The donor chain starts with a person who wants to donate a kidney to a loved one or friend. That kidney is transplanted into a recipient who had a donor willing to give, but was found to be incompatible. To keep the chain going, the donor from the first pair gives a kidney to a patient he doesn’t know but who is a match. Specialized testing determines compatibility in each donor/recipient pairing.


"And so it was with the six people who came together today. Darlene Rawlins, 54, of Baldwin, had been on dialysis for two years. She had hoped that her daughter, Contrina Rawlins-Pettway, 26, also of Baldwin, could donate a kidney, but testing found that the two were incompatible. Same with Jacqueline Gonzalez, 46, of Hollis, who had hoped to receive a kidney from her son, Karl Jordan, 27, also of Hollis. Unfortunately, they were also not a match.

"The third pairing in the three-way exchange involved Steve Michalik, 64, of North Carolina, a bodybuilder who won 22 titles during the 1970s and 1980s, including Mr. USA in 1971, Mr. America in 1972 and Mr. Universe in 1975, against such competitors as Arnold Schwarzenegger and the “Incredible Hulk” Lou Ferrigno. Mr. Michalik asked his good friend Martin Hein Andersen, of Denmark, for a kidney. Participating in today’s news conference via Skype from Denmark, Mr. Andersen travelled to New York to get tested, but he too received the same news -- the two were incompatible.

"But thanks to the latest technology, teamwork and sophisticated testing, the transplant staff at NSUH found a way to make the three-way swap possible. On April 25, Dr. Kavoussi removed the kidneys laparoscopically from the donors and Dr. Molmenti surgically implanted them in each of the recipients. Most returned home three days later."

Saturday, May 28, 2011

Limits on the scope of markets

Tim Sullivan points me to this old post by Abe Othman on his blog Constructive Economics: Horseflesh and Hypocrisy

"T. Boone Pickens, from his autobiography The Luckiest Guy in the World:
I believe the greatest opportunity lies in a free marketplace. There are powerful forces afoot trying to restrict that freedom in the interests of the vested and already wealthy.
"T. Boone Pickens, in congressional testimony on a bill to prevent the slaughter of horses for food:
The whole thing, it’s a boondoggle on the American people…People that are for the slaughter should be forced to go down on that kill floor…The brutal slaughter of horses for consumption by wealthy diners in Europe and Japan cuts against our moral and cultural fiber — it’s just plain un-American.
"Remember, if they can come after the horse slaughterers, they can come after the hedge funds. So if you really believe in free markets, have some horse today!"
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I'm inclined to think that Mr. Pickens is  being neither inconsistent nor hypocritical, but rather that he has opinions about the proper scope of markets.

When Steve Leider and I surveyed people on their attitudes towards whether kidneys should be for sale, one set of questions we asked concerned attitudes towards markets.

We measured agreement with statements that markets cause “an unfair distribution of income,” “rewards people fairly,” “lead to an efficient use of resources,” “require a lot of government control,” and are overall “fair and ethical.” However there was no correlation between disliking markets generally and disliking a market for kidneys: if anything, social conservatism was a predictor of dislike of kidney markets, and that was correlated with approval of markets generally. So, a picture began to emerge of people who liked markets generally, but thought they should they should not be extended into certain domains.  Maybe that's the view T. Boone Pickens is expressing.

(See Leider, Stephen and Alvin E. Roth, ''Kidneys for sale: Who disapproves, and why?'' American Journal of Transplantation , 10 (May), 2010, 1221-1227.)

Friday, May 27, 2011

Seeing red at Harvard

A sea of red at Harvard's commencement yesterday...

The Ph.D. grads got out of their gowns pretty fast as they came to lunch...
way to go, Judd.

The market for taxis

With a Start-Up Company, a Ride Is Just a Tap of an App Away
"Uber, a start-up based in San Francisco, offers a cellphone application that is aimed at making using a car service quick and painless.
...
"Uber is not a taxi or limousine company. Instead it operates as a dispatch service, working with local owners of licensed private car companies. Uber provides each car with an iPhone and software that manages incoming requests. When an Uber user needs a ride, the dispatcher and the closest car are notified, and the system sends back an estimate of the pick-up time. While they wait, users can monitor the car’s location on their phone."
...
"Uber, which is available for the iPhone and Android devices, requires users to enter their credit card information when they sign up. When they reach their destination, they can simply hop out, and the ride is charged to the card. Uber gets a percentage of each fare; the rest goes to the car services and drivers."

Thursday, May 26, 2011

College admissions and income diversity

In this season of college graduations, David Leonhardt reports on the income distribution of students at selective colleges: Top Colleges, Largely for the Elite

"...a Georgetown University study of the class of 2010 at the country’s 193 most selective colleges. As entering freshmen, only 15 percent of students came from the bottom half of the income distribution. Sixty-seven percent came from the highest-earning fourth of the distribution. These statistics mean that on many campuses affluent students outnumber middle-class students.

“We claim to be part of the American dream and of a system based on merit and opportunity and talent,” Mr. Marx says. “Yet if at the top places, two-thirds of the students come from the top quartile and only 5 percent come from the bottom quartile, then we are actually part of the problem of the growing economic divide rather than part of the solution.”
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In case you don't know income quartiles off the top of your head, here they are (in much more detail than just quartiles, estimated for 2011) from the Tax Policy Center. The median income for a married couple filing jointly is estimated to be $75,000, and the 75th percentile is $130,000 (the 99th percentile is $762,000).

Wednesday, May 25, 2011

Frank Delmonico on transplant tourism in China

In a News and Views article in Nature Reviews Nephrology, Frank Delmonico describes commercial transplantation in China as still depending on organs from executed prisoners, and comments on a recent paper comparing the health outcomes of transplant tourist patients and other transplant patients, all from Taiwan.

Transplant tourism—an update regarding the realities by Francis L. Delmonico,
NATURE REVIEWS | NEPHROLOGY VOLUME 7 | MAY 2011, 248-50.

Tuesday, May 24, 2011

Misc. repugnant transactions

Minn. Voters Will Decide on Gay Marriage Ban
"After nearly six hours of emotional debate, a proposed constitutional amendment that would define marriage as between a man and a woman was approved in the Minnesota House late Saturday night. It was the last legislative step needed to put the question on the statewide ballot in November 2012.

"State law already prohibits gay marriage, but supporters of the proposed amendment said it's necessary to prevent judges or lawmakers from legalizing it in the future. Opponents said the constitution should be used to expand rights, not limit them, and predicted a long, divisive debate over the next 18 months.

"The House voted 70-62 mostly along party lines in the GOP-controlled chamber, though four Republicans crossed over to vote 'no' while two Democrats voted in favor of the ban."
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Meanwhile in New York, Donors to G.O.P. Are Backing Gay Marriage Push

"The newly recruited donors argue that permitting same-sex marriage is consistent with conservative principles of personal liberty and small government."
***********


Mercenaries in the UAE: Secret Desert Force Set Up by Blackwater’s Founder
"In outsourcing critical parts of their defense to mercenaries — the soldiers of choice for medieval kings, Italian Renaissance dukes and African dictators — the Emiratis have begun a new era in the boom in wartime contracting that began after the Sept. 11, 2001, attacks. And by relying on a force largely created by Americans, they have introduced a volatile element in an already combustible region where the United States is widely viewed with suspicion.
...
"Still, it is not clear whether the project has the United States’ official blessing. Legal experts and government officials said some of those involved with the battalion might be breaking federal laws that prohibit American citizens from training foreign troops if they did not secure a license from the State Department."
************

Switzerland: Zurich votes on 'suicide tourism' laws
"While opinion polls indicate a majority of Swiss remain in favour of assisted suicide, they also suggest that 66% are against what has become known as suicide tourism."

In the end, Zurich Voters Keep 'Suicide Tourism' Alive
"Voters in the Swiss canton (state) of Zurich have rejected calls to ban assisted suicide or to outlaw the practice for nonresidents."
***********

Selling Educational 'Indulgences' in the U.K.  (HT Kim Krawiec)
"A fierce debate is raging in the U.K. about a new proposal to let wealthy students pay for places at top universities -- even if they've been rejected through the regular admissions process. As it stands now, British universities have firm quotas for the number of students they can admit, and those places are filled through meritocratic competition. Once you get in, you pay a low, flat fee to attend (about $6,000 a year to attend Oxford). But David Willets, the education minister, is proposing to create new, "off-quota" places, open to students who haven't made the cut, as long as they can afford to pay substantially higher fees. Rage and confusion have been the immediate results of his proposal."

Monday, May 23, 2011

Black Market for Blood

According to this AP article, Bulgaria is experiencing first-hand the concept of repugnant transactions:

"It's a grim reality for patients and families in Bulgaria, a struggling EU nation where donors are troublingly scarce, hospitals are strapped for funds and blood traders — mainly Gypsy, or Roma, men — are thriving...

..once a deal is struck, a donor hanging out nearby — or at most a phone call away — is summoned, and turns up at the blood clinic masquerading as a relative. He gets a proof of donation certificate and sells it to the desperate family. The blood heads off to be checked, and if it is found to be disease-free it goes toward filling the clinic's reserves."

It seems the Bulgarian legal apparatus is largely tolerant of the black market, most likely as it believes it to be a critical driver of blood supply. But one must wonder to what degree the presence of a black market crowds out altruistic donors ("voluntary blood donation has been gradually shrinking here over the past two decades..."). At the same time, a black market is less efficient (from a social standpoint) than a publicly operated market for blood; the middlemen are presumably taking much of the rents. So while the jury is still out on whether enforcement of the ban of blood sales or a public embrace is best, this interior solution cannot be optimal.

So why can't Bulgaria get more people to go under the needle? Repugnance has put the Bulgarians in a prickly (groan) spot.

Horsemeat in Canada

Top Chef trots into taboo territory

"Producers of the competitive culinary TV show Top Chef Canada galloped headlong into an internet outcry after news spread about an upcoming episode's focus on horse meat as an ingredient. In the challenge, scheduled to air on May 16th on Food Network Canada, contestants were required to cook traditional French dishes, including both foie gras (also a controversially-obtained food) and horse.
Protesters took to the show's Facebook page after promos for the episode aired, flooding the comments with mentions of Top Chef boycotts, links to anti-horse meat websites and advice on how to contact the show's advertisers. A specifically targeted Facebook group called "Boycott Top Chef – Protect the Horses" was swiftly established as a central location to share resources including educational material and contact information for the show's advertisers and the network's executives.

"Food Network Canada has issued a statement saying, "Please be assured it is not our intention to offend our viewers. The challenge in this episode involves having the competitors create a truly authentic, traditional French menu. One of the most traditional French foods is horsemeat. Horsemeat is also considered a delicacy in many cultures around the world. While we understand that this content may not appeal to all viewers, Food Network Canada aims to engage a wide audience, embracing different food cultures in our programming."
...
"Protesters, however, argue that not only is eating horse meat a moral taboo on par with the consumption of dogs and cats - it's also insufficiently regulated in Canada.
...
While horse meat is not an especially predominant ingredient in Canadian cuisine, and the majority of the meat processed in the country is exported internationally, it can be found for sale in supermarkets and at butcher shops.
An Eatocracy poll from earlier this year indicates that a substantial potion of the population expects to see a shift in perception toward horse meat consumption in the United States.
Do you think Americans will ever accept horse meat as part of their diet?
- No way. Never. 34.82%
- Only if there is no other option and we run out of other food sources 13.71%
- People don't really care that much what they put in their mouths, so yes 5.55%
- Possibly, but only after its health benefits are really proven 3.47%
- It'll take time, but why not? 14.3%
- It would be a huge success now if it were legal 4.11%
- People might try it as a novelty, but not as a staple - it'll always have a bit of a taboo 13.73%
- Maybe some food freaks will consider it a delicacy, but most people won't touch it 9.28%
- Other (please share below) 1.05% 

HT: Joshua Gans (the Canadian professor:) 

Sunday, May 22, 2011

Kidney exchange: the view from Michigan

Here's a new working paper on kidney exchange, that gives thoughtful attention to the kinds of weights that might be attached to edges:

Yijiang Li, Jack Kalbfleisch, Peter Xuekun Song, Yan Zhou, and Alan Leichtman, "Optimization and Simulation of an Evolving Kidney Paired Donation (KPD) Program" (May 2011). The University of Michigan Department of Biostatistics Working Paper Series. Working Paper 90. http://www.bepress.com/umichbiostat/paper90

Abstract:
"The old concept of barter exchange has extended to the modern area of living-donor kidney transplantation, where one incompatible donor-candidate pair is matched to another pair with a complementary incompatibility, such that the donor from one pair gives an organ to a compatible candidate in the other pair and vice versa. Kidney paired donation (KPD) programs provide a unique and important platform for living incompatible donor-candidate pairs to exchange organs in order to achieve mutual benefit. We propose a novel approach to organizing kidney exchanges in an evolving KPD program with advantages, including (i) it allows for a more exible utility-based evaluation of potential kidney transplants; (ii) it takes into consideration stochastic features in managing a KPD program; and (iii) it exploits possible alternative exchanges when the originally planned allocation cannot be fully executed. Another primary contribution of this work is rooted in the development of a comprehensive microsimulation system for simulating and studying various aspects of an evolving KPD program. Various allocations can be obtained using integer programming (IP) techniques and microsimulation models can allow tracking of the evolving KPD over a series of match runs to evaluate different allocation strategies. Simulation studies are provided to illustrate the proposed method."

Saturday, May 21, 2011

Market design (and experimental economics) in Australia: job opportunity in Victoria

It must be a good sign when governments are advertising for market designers with experimental skills...

Senior Policy Analyst Experimental Economics and Market Design in the Department of Treasury & Finance, Victorian Government, Melbourne.

Design new market mechanisms to deliver better policy outcomes
Build capability in experimental economics and market design methodologies within the VPS
Lead policy design collaborations between the VPS and the university sector

This role will undertake

Analysis and high level policy advice on applications of market design in the delivery of a wide range of government policy, procurement and resource allocation objectives;

Capacity building in experimental economics and market design within the VPS;

The design of new market based policy instruments and supervision of experimental economics sessions to test and refine new policy instruments; and

Policy collaboration across government and between government and the university sector.

To succeed in this interesting and challenging role you will have:

A PhD in experimental economics;

Experience in the design, conduct and supervision of policy experiments in an economics laboratory environment;

A strong record of achievement with the application of a market design methodology to public policy problems; and

High level communication, presentation and interpersonal skills.

Friday, May 20, 2011

Harvard legacy and waitlist admissions

The Crimson reports: Legacy Admit Rate at 30 Percent

"Harvard’s acceptance rate for legacies has hovered around 30 percent—more than four times the regular admission rate—in recent admissions cycles, Dean of Admissions and Financial Aid William R. Fitzsimmons ’67 told The Crimson in an interview this week.
Fitzsimmons also said that Harvard’s undergraduate population is comprised of approximately 12 to 13 percent legacies, a group he defined as children of Harvard College alumni and Radcliffe College alumnae.
"Fitzsimmons’ comments came the week after a discussion at New York University on legacy admissions between Yale Dean of Undergraduate Admissions Jeffrey Brenzel, senior fellow at The Century Foundation Richard D. Kahlenberg ’85, and Bloomberg News editor at large Daniel L. Golden ’78.
"According to a New York Times story on the event, Brenzel said that Yale rejected 80 percent of its legacy applicants. Brenzel reported that Yale legacies comprise less than 10 percent of the class, according to Kahlenberg.
"Brenzel also said that there is a positive correlation between alumni donations and legacy admissions. According to Brenzel, Yale fundraising suffers when fewer legacies are accepted. Still, he said, this year Yale rejected more children of top donors than it accepted.
...
"Fitzsimmons defended Harvard’s legacy admissions rate.
“If you look at the credentials of Harvard alumni and alumnae sons and daughters, they are better candidates on average,” said Fitzsimmons, part of what he sees as the explanation for the disparity in the acceptance rate. “Very few who apply have no chance of getting in.”
"Because of the family background of legacies, he said, students are more likely to be aware if they are unlikely to be accepted."
********

In other 2011 admissions news...
Higher Yield Means Few Waitlist Admissions
"The yield for Harvard College’s Class of 2015 increased to nearly 77 percent, up slightly from 75.5 percent last year, the University announced Thursday morning. The yield at Harvard, which measures what percentage of accepted students choose to attend, is typically among the highest in the nation.
Dean of Admissions and Financial Aid William R. Fitzsimmons ’67 said that he anticipates his office will admit approximately 10-15 students off the waitlist this year, with some decisions potentially coming as early as this Tuesday. This number is far lower than the 50 to 125 students Fitzsimmons previously said his office generally hopes to admit each year."

Thursday, May 19, 2011

Kristof on randomized trials, and economics

Nicholas Kristof's NY Times column today, Getting Smart on Aid, is a paean to randomized trials experiments, and the work of Michael Kremer, Abhijit Banerjee, Esther Duflo, Dean Karlan and others.

It also includes this thought on economics generally:

"When I was in college, I majored in political science. But if I were going through college today, I’d major in economics. It possesses a rigor that other fields in the social sciences don’t — and often greater relevance as well. That’s why economists are shaping national debates about everything from health care to poverty, while political scientists often seem increasingly theoretical and irrelevant.

"Economists are successful imperialists of other disciplines because they have better tools. Educators know far more about schools, but economists have used rigorous statistical methods to answer basic questions: Does having a graduate degree make one a better teacher? (Probably not.) Is money better spent on smaller classes or on better teachers? (Probably better teachers.)"

Mentoring doctoral students

I'm proud to have gotten an award from my students:)


It does make me remember that I have some (linguistic) reservations about mentoring.

And it makes me a two-timer:

Thank you, students, and congratulations to those who are graduating next week.

Wednesday, May 18, 2011

Markets for human hair

I recently received this email:

Hi Al,


I noticed that you article posted some time ago (Markets for hair, blood, plasma and eggs) contains a link to The Hair Trader which has now closed. I own website BuyandSellHair.com and it has been running for almost a year. It is now the largest hair trading site based on traffic and number of ads listed.


I was hoping that you'd be able to update your link from The Hair Trader to my site. In exchange for your trouble, i'll send you $20 via PayPal - just send me your PayPal email id.


Look forward to hearing from you.


Kind Regards,


Sunny
BuyandSellHair.com
...The Human Hair Marketplace
***********

While I didn't take Sunny up on his offer, I did check out his site. The business model is that he charges for ads, but all transactions appear to be between buyers and sellers, and a quick glance suggests that typical sellers are individuals living in the United States.

*********
The market for human hair has attracted one sure sign that it is thriving: it's now a target for crime, the NY Times reports. Costly Hairstyle Is a Beauty Trend That Draws Thieves’ Notice

"During the past two months alone, robbers in quest of human hair have killed a beauty shop supplier in Michigan and carried out heists nationwide in which they have made off with tens of thousands of dollars of hair at a time.
...
"Once stolen, the hair is typically sold on the street or on the Internet, including eBay, shop owners and the police say.

"The most expensive hair type — and the one in highest demand by thieves and paying customers alike — is remy hair, which unlike most other varieties is sold with its outermost cuticle layer intact. This allows it to look more natural and to last longer without tangling. Remy hair from Indian women is the most popular.
...
"Remy hair from India usually comes from women who have their heads shaved as a sign of having mastered their egos."

**********
Hair from India has become controversial in one particular market, since wigs are worn by (among others) some orthodox Jewish married women (who are obliged to cover their heads). There have been some problems with deciding what hair is kosher, relating precisely to the question of whether the hair is cut as part of a religious sacrifice.
(Different orthodox rabbis differ on the question of whether a wig is a proper head covering at all, with some rabbis finding them repugnant.)

Tuesday, May 17, 2011

Gender and annuities: insurance as a repugnant transaction in EU

Considerations of public policy sometimes contribute to making certain kinds of transaction repugnant.
Ran Shorrer points me to this recent decision: Annuities hit by European court ban on gender bias

"The European Court of Justice (ECJ) has ruled gender based pricing of annuity and insurance contracts is incompatible with human rights.

"The ECJ has confirmed a challenge by Belgian courts asking whether taking gender into account when writing private insurance contracts was incompatible with European anti-discrimination directives.


"The Court has ruled that, in the insurance services sector use of gender bias will be invalid with effect from 21 December 2012.
"Currently the expectation by UK providers that men will live shorter lives means males receive a higher income per year from their annuity contract than women with the same size pension pot."

Ran writes: "Since life expectancy really differs between men and women, and since this is a signal that cannot be manipulated , it was widely used and its ban constitutes a huge problem to the producers."

Monday, May 16, 2011

Cost of kidneys

Katie Silberman, who was kind enough to write to me about her husband Bryan's kidney transplant in an exchange last July, through NEPKE, writes again to give a snapshot of the costs.

"We just received the bill for Bryan's kidney transplant last summer.  As an economist, I thought you might be interested in these numbers.  I imagine you have asked your students how much a kidney is worth.  Well, according to Rhode Island Hospital, $44,895.90!  Of course they call it "organ acquisition," since we can't legally buy it.  Here is the breakdown of the bill:

Pharmacy                       15,356.03
Educ training                     160.65
Organ acquisition             44,895.90
M&S supplies                     2,382.96
Lab                                      3,696.65
radiology                                 282.45
operating room                 7,004.55
recovery room                   3,713.85
room charges                    12,966.00
addl room charges              1,504.00

total                                  $91,963.04
insurance adjust                $91,933.14
we owe:                            $29.90


"As a consumer, the $29.90 is ridiculous, but I'll take it.

"Most importantly, Bryan's health is fantastic, and we have our family back!

best,
Katie"
************

That is of course just the hospital bill, the docs are paid separately.
Katie further writes 
"Of course, we pay constant co-pays.  In fact, we are now in the process of applying for financial assistance from the pharma companies themselves for Bryan's drugs, which is an entirely different economic/ personal/ political calculus."

***********


NEPKE doesn't charge an organ acquisition fee at the moment, so I assume that line has to do with the evaluation of the donor, cost of the nephrectomy, and subsequent care. 
At the moment, the financing of kidney exchange is still in flux.

Sunday, May 15, 2011

Matching and marriage: my spousonomics interview

The spousonomics team asks me about matching close to home: Economists in Love: Al Roth

Here's the first question and answer, out of four...

"1. People think game theory has no place in a marriage. But you told me once that marriage is a big game made up of little games, and the trick is to focus on the big one, not get tripped up by the little ones. Explain.
I don’t recall that conversation, but my answer makes me think that you must have asked me whether game theory helped me get out of doing the dishes. That doesn’t strike me as the right focus, when you’re thinking about someone with whom you’re going to be lovers and friends and parents together, and each other’s closest confidant, most unconditional ally, and most devoted historian.  Let’s just say that marriage is a dynamic game that you play over a lifetime."

Saturday, May 14, 2011

The market for typewriter ribbons

...has just taken another hit. I guess I had better retire my manual Corona. Fortunately the ability to type remains a useful skill...

The Telegraph reports:
End of an era as last mechanical typewriters are sold
An era of clattering keys and inky ribbons is coming to an end, as the world's last mechanical typewriter manufacturer has revealed it has only 500 left in stock.

"Godrej and Boyce, of India, ceased production in 2009 and has now almost cleared its remaining inventory, according to theBusiness Standard.
The firm's typewriter business peaked at 50,000 per year as the Indian economy took off in the 1990s, but tailed off as computers quickly took over.
"From the early 2000 onwards, computers started dominating. All the manufacturers of office typewriters stopped production, except us," said general manager Milind Dukle.
"Till 2009, we used to produce 10,000 to 12,000 machines a year," he added.
"Godrej and Boyce still sells a few of its remaining mechanical typewriters to defence agencies, courts and government offices in India"

Friday, May 13, 2011

Society for Economic Design Conference in Montreal in June

The meeting is June 15-17, and the preliminary program is online.

There are many sessions on matching (I remember when matching was a very specialized interest...:)

Thursday, May 12, 2011

Marriage among the Tinkers of Thrace

"The NY Times reports on the evolution of the market for brides among Bulgarian Roma: Subtle Shift at the Gypsy Bride Market

"STARA ZAGORA, BULGARIA — In a field outside town, teenage girls in skimpy outfits worked the crowd at what is known locally as the “Gypsy bride market.” Clad by contrast in long velvet skirts and brightly colored headscarves, their proud mothers watched. Gold flashed on necks, fingers, ears and teeth.


"Meet the tinkers of Thrace, semi-nomadic Roma who in the early 21st century are among the few in Europe hewing to ancient ways.
...
"Technically, the young women at this traditional St. Todor’s Day “market” were not for sale. But it is at this fair, held each year on the first Saturday of Orthodox Christian Lent, that the Kalaidzhi (as the estimated 18,000 Thracian tinkers are known) conduct the complex negotiations on a bride price that traditionally lead to marriage.


"The identity of this semi-nomadic Roma group is based on the ancient craft of its menfolk: producing and repairing pots, pans and caldrons. For centuries, these smiths have scattered in ones or twos in Bulgarian villages to practice this craft, and they get together rarely for events like the St. Todor’s fair.


"This is therefore one of the few opportunities for teenagers to meet other Kalaidzhi — and potential spouses. Dating is not really an option when teenage boys and girls are forbidden to meet without an adult. Marriage outside the group is equally taboo.


"Leaning against his car, surveying the scene, Hristos Georgiev, 18, was pleased to be wrapping up negotiations with the father of Donka Dimitrova, an 18-year-old he expected to marry weeks later. Bargaining had narrowed to between 10,000 and 15,000 levs, or $7,500 to $11,300, well more than a year’s worth of the average Bulgarian’s wages of 8,400 levs. He said he saved the money working construction in Cyprus.


"According to Velcho Krustev, an ethnographer with the Bulgarian Academy of Sciences, “the man is not buying a wife, but her virginity.” The payment ensures the bride will be treated well by her new family, he said.
...
"Kalaidzhi are among the most tradition-bound of Roma. But even they are changing — to the distaste of elders like Ivan Kolev, 73.


"While he insisted the bride price would stay — “our people always insist that a girl be a virgin” — he noted that Kalaidzhi women “were much shyer” when he married some 50 years ago. “Now they just elope. Now they go around like Bulgarians.”

Wednesday, May 11, 2011

Pro-social behavior of all kinds: Judd Kessler

Judd Kessler defended his dissertation yesterday (successfully, I should add:).


His work includes lab and field investigations of charitable giving, of provision of public goods, of cooperation in the presence or absence of contracts, of team production when pay is equal or unequal, and of the decision to be an organ donor.

His job market paper, “Signals of Support and Public Good Provision,” is unusual in the way it combines experiments both in the field and in the lab. The field experiment involves a big national charity’s regional campaign in about 200 firms, covering around 25,000 employees. One of the treatment conditions involved giving out buttons to all employees, which they could wear if they wished to express support for the charity. This turned out to have a surprisingly large effect on giving: it increased the number of donations and the amount donated by about a third. Another treatment involved giving out raffle tickets to those who contributed, and this did not have a positive effect on giving. The hypothesis is that the buttons (unlike the raffle tickets) provide information to coworkers about the level of support the charity enjoys, and that when they receive positive information about this they are more likely to contribute themselves.

But a field experiment is by nature imperfectly controlled, so Judd also conducted a lab experiment modeled on the field experiment (in which subjects also had an opportunity to contribute to a charity), but with careful controls in place to test for alternative hypotheses. The treatments in the field experiments already suggested that we aren’t seeing increased contributions because of gift exchange (i.e. the button isn’t regarded as a gift, as the raffle tickets might be), and what Judd finds in the lab is that the major effect of seeing another subject who has chosen to wear the button is that it increases a subject’s estimate of what the other subject will give, and this appears to be the mechanism through which contributions are increased. (Subjects also contribute more when wearing a pin, so this is a rational expectation.)

Judd’s field experiment and lab experiment complement each other; the lab experiment couldn’t have given a reliable prediction of the magnitude of the effect Judd observes in the field, while the field experiment leaves open many more hypotheses about the cause of this effect than does the lab experiment.

Welcome to the club, Judd.

Tuesday, May 10, 2011

Boston School Choice: it's not all location

The latest article in the Globe's series on school choice in Boston, by Jenna Russell, makes very graphically a point I like to make by saying that school choice always brings out two political viewpoints. Those who live close to good schools are members of the "walk to school party", while those who don't are members of the "school choice party".  In Boston, those interests are accommodated by having half the seats in some schools give a priority for children who live in the "walk zone," while the other half do not. The decision is then made based on the preference lists the families submit (via a deferred acceptance algorithm that makes it safe for families to reveal their preferences), with ties broken by lottery.

The article focuses on two children, one of whom lives right across the street from a good school and one who doesn't. The kindergarten only has 32 places, only 16 of which are reserved for local children, with the other 16 giving everyone equal access. Since there are lots of ties, the lottery is important.

An early education in the meaning of ‘no’

"The system seems deeply regrettable to her parents, Jen and Doug Bowen-Flynn. But to Marie and Markel Wade of Dor chester, it is a blessing. They, too, live steps away from an elementary school. If school assignments were based on proximity, they would have no choice but to send their children to Winthrop Elementary, which has lower test scores and a less polished reputation.
Instead, because of a lottery that gives all students a chance to seek a seat at better-regarded schools, it is they who send their children to the school on Sawyer’s doorstep."

(Our papers on the design of the Boston school choice mechanism here.)

Monday, May 9, 2011

The international market for stolen cars

The Washington Post reports: International theft rings steal hundreds of vehicles in D.C. area every year

"Officials estimate that each year in the Washington area alone, hundreds of cars are stolen and shipped overseas. New York authorities announced last June that they had charged 17 people with stealing and shipping hundreds of luxury cars. Other D.C. area police officials and a spokesman for the FBI’s Baltimore Field Office said their detectives have worked similar cases.
...
"The ring’s bosses are usually based in African countries or other developing nations, where it is more difficult to find reasonably priced, mid- to high-end vehicles, authorities said. They order specific cars from middlemen in the United States, and then low-level thieves set out to get their cut.

"In the Prince George’s ring, the thieves are paid according to the vehicles they carjack or steal — $1,500 for a Toyota Camry, $2,500 for a RAV4, $5,000 for a Porsche Cayenne, Aponte said. The middlemen handle the rest. They stash the stolen cars in parking lots or neighborhoods, waiting to see whether police are on their trail. Then they load the vehicles onto shipping containers bound for Africa, police said. The rings are especially prevalent in the D.C. area, police said, because of its proximity to ports."

Sunday, May 8, 2011

Lending library for newspapers (help wanted ads, mostly)

Sonia Jaffe points me to this article: Renting a read from 'newspaper landlords'

"Garum Tesfaye is one of Addis Ababa's "newspaper landlords," a group of entrepreneurs in the Ethiopian capital who rent out papers to people too poor to buy them.
...
"For 20 to 30 minutes, these readers can get their hands on a newspaper for a fraction of the price of having to buy it. If they keep the paper longer than their allotted rental time, they have to pay extra.
"A newspaper in Addis Ababa costs about six birr (35 U.S. cents) to buy. In contrast, it costs only 50 Ethiopian cents (less than one U.S. cent) to rent one.
"If 20 readers read this single paper at the rate of 50 cents, I will make 10 birr (about 60 U.S. cents)," says Tesfaye, whose business serves a regular customer base that visits his makeshift roadside shop each day.
"Most of the readers focus on vacancies rather than regular news," Tesfaye says."