Market design in a future of trusted smart markets: paper by Eduardo Azevedo and Eric Budish

The recent NBER conference on market design had a number of remarkable papers. One of them, by Eduardo Azevedo and Eric Budish, seems to me to offer a tantalizing glimpse at what market design might look at some time in the not too distant future when there is a high level of trust in computerized "smart" markets in which a proxy agent reliably acts on your behalf.

At least that's one way to interpret their paper "Strategyproofness in the Large as a Desideratum for Market Design." Among other things, it considers a kind of extension of the revelation principle that would allow a non-strategy-proof mechanism with an attractive Bayesian Nash equilibrium to be converted into a direct mechanism (e.g. one in which agents were asked to reveal their preferences) that would be "strategy proof in the large," (SP-L) i.e. approximately strategy proof in large markets, and strategy proof in the limit. (Another big contribution of their paper is making precise the idea of strategy proofness in the large, which, they argue, may be a desirable criterion when no strategy proof mechanism exists, or when markets are large...the idea is that mechanisms are SP-L but not strategy proof when they allow players' reports to influence prices in ways that vanish in the limit, but mechanisms that aren't even SP-L allow more fundamental manipulations, e.g. they don't give you what you want even when you're a price taker.)

About the revelation principle type mechanisms hey say:
"The construction works as follows. Agents report their types to our mechanism. Our mechanism then calculates the empirical distribution of these types, and then “activates” the Bayes-Nash equilibrium strategy of the original mechanism associated with this empirical. If agents all report their preferences truthfully, this construction will yield the same outcome as the original mechanism in the large-market limit, because the empirical distribution of reported types converges to the underlying true distribution. The subtle part of our construction is what happens if some agents systematically misreport their preferences, e.g., they make mistakes. Suppose the true prior is u , but for some reason the agents other than agent i systematically misreport their preferences, according to distribution m. In a finite market, with sampling error, the empirical distribution of the other agents’ reports is say m^ . As the market grows large, m^ is converging to m, and also i’s influence on the empirical distribution is vanishing. Thus in the limit, our construction will activate the Bayes-Nash equilibrium strategy associated with m. This is the “wrong” prior – but agent i does not care. From his perspective, the other agents are reporting according to m, and then playing the Bayes-Nash equilibrium strategy associated with m, so i too wishes to play the Bayes-Nash equilibrium strategy associated with m. This is exactly what our constructed mechanism does on i’s behalf in the limit. Hence, no matter how the other agents play, i wishes to report his own type truthfully in the limit, i.e., the constructed mechanism is SP-L."

The attraction of such a mechanism of course is that it doesn't depend on the agents reaching a Bayes-Nash equilibrium, which is the problem with mechanisms whose desirability is based on the attractiveness of their equilibrium behavior. Equilibrium may be hard to reach, and such mechanisms may perform badly in practice as a result. But coordination on an equilibrium is much easier when truth telling is a dominant strategy.

The reason this seems like a future mechanism rather than one that is promising for practical application right now is that it is pretty opaque, the opposite of transparent. I can't yet imagine going to e.g. a school district and proposing such a mechanism, which you'd have to sell to parents by saying "tell us your true preferences, and we'll act on your behalf to get you your highest ranked school choice by playing the equilibrium that will arise when we see the choices of all families." The problem is not just that the equilibrium might be hard to describe in the abstract, but that this difficulty is compounded by the fact that assignments will depend in this hard to describe way on an unknown distribution of preferences.

But what might be a tough sell today will be a much easier sell when everyone is accustomed to having their data automatically backed up in the cloud by software that optimizes performance based on things only it observes, and to having their electricity consumption mediated by smart meters that run the air-conditioner in a way that reduces costs based on spot prices, etc.

So...engineering is like that. Just as bridges have gotten longer and stronger over time, there's no reason to think that the market designs of today will be the ones we build in the future. The prospect of confidently putting yourself in the hands of a non-transparent automated expert that you may not understand, a "Martian system" so to speak, may be agreeable to the general public of the future.

(The phrase "Martian system" is one I recall from the early days of expert systems and decision aids. The idea was that you were likely to trust an automated adviser more if you could understand its reasoning, and so judge when its advice was likely to be correct. If you got a non-intuitive answer from an opaque oracle, a "martian system" instead of an expert system, you might worry that the answer was wrong because of wrong inputs or bad construction, and so ignore it. But a transparent system might convince you that a non-intuitive answer was correct, if you were more confident that when it wasn't correct you could tell. But if the martian adviser became so reliable that you could be sure he would not produce an incorrect answer, his opacity might become less of a drawback, since you could rely on him anyway.)

By the way, did I mention that Eduardo is on the job market this year? He's a talented theorist with broad interests who has already made important contributions to matching theory, among other things. Here are his papers. You could hire him.

What do policy makers want from a market design? And what would be the consequences of giving it to them? Clayton Featherstone on rank efficiency.

A surprising variety of allocation mechanisms, such as those used for school choice, ask participants to rank-order the alternatives; i.e. to indicate their first choice, second, third, and so forth. Not surprisingly, one thing that policy makers want to know about any proposed mechanism is how many people will receive their first choice, second, third, and so on.

Clayton Featherstone is a market designer who already has an unusual amount of experience in designing and implementing choice mechanisms. (If you recently got an assignment from Teach for America, or were assigned to a country for your global immersion requirement at HBS, you've benefited from his work.) His job market paper is an investigation of the properties of "rank efficient" mechanisms, which are designed to produce outcomes whose distribution of ranks can't be stochastically dominated:
Rank Efficiency: Investigating a Widespread Ordinal Welfare Criterion 

 Here's the Abstract: "Many institutions that allocate scarce goods based on rank-order preferences gauge the success of their assignments by looking at rank distributions, that is, at how many participants get their first choice, how many get their second choice, and so on. For example, San Francisco Unified School District, Teach for America, and Harvard Business School all evaluate assignments in this way. Preferences over rank distributions capture the practical (but non-Paretian) intuition that hurting one agent to help ten might be desirable. Motivated by this, call an assignment rank efficient if its rank distribution cannot feasibly be stochastically dominated. Rank efficient mechanisms are simple linear programs that can be solved either by a computer or through a sequential improvement process where at each step, the policy-maker executes a potentially non-Pareto-improving trade cycle. Both methods are used in the field. Preference data from Featherstone and Roth (2011)'s study of a strategy-proof match shows that if agents were to truthfully reveal their preferences, a rank efficient mechanism could significantly outperform alternatives like random serial dictatorship and the probabilistic serial mechanism. Rank efficiency also dovetails nicely with previous literature: it is a refinement of ordinal efficiency (and hence of ex post efficiency). Although rank efficiency is theoretically incompatible with strategy-proofness, rank efficient mechanisms can admit a truth-telling equilibrium in low information environments. Finally, a competitive equilibrium mechanism like that of Hylland and Zeckhauser (1979) generates a straightforward generalization of rank efficiency and sheds light on how rank efficiency interfaces with fairness considerations."

Clayton’s paper also solves an empirical puzzle about those matching mechanisms that we see “in the wild”. The theory literature has paid a good deal of attention to ordinally efficient mechanisms, as first described by Bogomolnaia and Moulin, who showed that ordinal efficiency can be obtained through a class of “simultaneous eating” mechanisms. But, despite the appeal of ordinal efficiency, no one has ever reported that such mechanisms have been observed in use. Clayton shows that a class of linear programming mechanisms  and an equivalent class of incremental improvement mechanisms that we do observe in practice produce rank efficient outcomes. So, he shows, there are ordinally efficient mechanisms in use; just not those that were previously known to produce ordinally efficient outcomes before he showed that they produced rank efficient outcomes and that rank efficiency implies ordinal efficiency.

Clayton is an unusually experienced market designer whose field experience motivates novel theoretical insights. He's also a talented experimenter who studies market design issues in the lab. He's a Stanford Ph.D. who is finishing up a two-year postdoc with me at Harvard. His other papers are on his Stanford job market page; you could hire him this year.

Five Harvard candidates for the Economics job market this year (2011-12)

One of the pleasures of being a professor of economics is the opportunity to interact closely with young economists just as they metamorphose  from being (merely) wonderful students into economists who teach us important new things.

The Talmud makes the point pretty nicely: "The sages said: I have learned much wisdom from my teacher, more from my colleagues and the most from my students" (BT Ta'anit 7a).

This year has been a crash course for me, since I am helping introduce five exceptional young economists to the job market: one postdoc, two students whose main adviser I was privileged to be, and two students who I helped to advise on papers of mutual interest.

They are Clayton Featherstone (also on the Stanford job market page here);
Eduardo Azevedo, and Jacob Leshno; and Yuichiro Kamada, and Katie Baldiga.

I hope to blog about one or more papers by each of them this week, Monday through Friday, if I can keep up. (I don't promise any particular order, let's see how much I can remember about each of them in time; at least this should help me keep their names straight:)

I'll update this announcement with links to the particular posts (and eventually with job market news), for future reference.

What do policy makers want from a market design? And what would be the consequences of giving it to them? Clayton Featherstone on rank efficiency.

Market design in a future of trusted smart markets: paper by Eduardo Azevedo and Eric Budish

Matching Japanese Doctors: problems with the current mechanisms, and suggestions for improvement by Yuichiro Kamada and Fuhito Kojima

Should you guess on the SAT? And do you? Katie Baldiga finds men and women are different.

How to allocate goods when the waiting list is essentially infinite. New queues for overloaded systems, by Jacob Leshno

A supply and demand model for stable matchings, by Eduardo Azevedo and Jacob Leshno

*******************April 2012 updates****************

Katie Baldiga defends her Ph.D. dissertation 

She and her significant other LC solved the two-body problem this year (!), and will be together at The Ohio State University, which is now more than ever a hotbed of experimental economics.

Yuichiro Kamada defends his Ph.D. dissertation

He will be going next year to a postdoc at Yale, after which he'll take up a position at Berkeley-Haas.

Eduardo Azevedo defends his Ph.D. dissertation

As of April 26 it isn't clear whether he'll be working next year in Philadelphia, NYC, or Chicago, which will depend on his fiance's jobmarket, which is still to be concluded.
Update: May 11--It's Wharton.

Jacob Leshno defends his Ph.D. dissertation

He will be going next year to a postdoc at Microsoft Research in Cambridge, after which he'll take up a position at Columbia GSB.

And Clayton Featherstone, who as a postdoc needed no defense (or maybe was indefensible?) will be going next year to Wharton.

ESA conference in Tucson, November 10-12

Here's the program for the 2011 Regional ESA Conference, November 10-12, 2011.

One striking thing about the program is that there are four sessions of papers focusing on gender.

Colbert on proposal to repeal Florida's dwarf tossing ban

Colbert Supports Repeal Of Dwarf-Tossing Ban Proposed By Florida Legislator Ritch Workman

(Dwarf tossing was one of the repugnant transactions I described in
Roth, Alvin E. "Repugnance as a Constraint on Markets", Journal of Economic Perspectives, 21:3, Summer, 2007, pp. 37-58.)


HT: Parag Pathak

College admissions trends, 2011 edition

NACAC, the National Association for College Admissions Counseling has released a new report:
College Admission Trends for 2011: Uncertain Times Lead Colleges to Lean More Heavily on Wait Lists; Acceptance Rate for Four-Year Colleges Declines Slightly, NACAC Finds

While much of the discussion in the press focuses on the small group of super selective colleges that admit fewer than 10% of applicants, the report indicates that the average admit rate over all four year American colleges and universities is 65%.

Academic publication: design of the market for (scholarly) ideas

Some new additions to the venerable discussion of how to organize academic journals and other outlets for (peer reviewed) ideas.

Noam Nisan reflects on The problem with journals, following a post by Tim Gowers, How might we get to a new model of mathematical publishing?

HT: László Sándor on google+

Science exchange

One of the notable things about this description is the ambivalence about monetary payments...

Online Marketplace Helps Professors Outsource Their Lab Research

Science Exchange

"The site functions like a marketplace, linking researchers who need to outsource parts of their work with people from institutions and companies who can provide that help. The providers bid, the researchers pick the bid that suits them best, and Science Exchange takes about a 5 percent cut (that percentage drops for bids worth more than $5,000).
The idea for the project came from Ms. Iorns’s own problems outsourcing research to other institutions. “The hardest part was paying” for such services, Ms. Iorns said, because universities often don’t have a protocol for how to pay for outsourced research.
This is not the first effort to use the Internet to link researchers to the facilities they need, but the “market aspect” of Science Exchange makes it different, said Edward G. Derrick, chief program director for the Center of Science Policy and Society Programs at the American Association for the Advancement of Science.
The site’s model has raised questions for Michael R. Rossi, director of the Cancer Genomics Shared Resource at Emory University’s Winship Cancer Institute. Mr. Rossi thinks researchers may get into trouble with the National Institutes of Health and other institutions that support them if they pay a third party a fee to find outsourced work. “That really could become a big problem,” Mr. Rossi said.
Ms. Iorns, though, said she has been in contact with the NIH’s National Center for Research Resources, and she said officials there have been enthusiastic about the idea. “This is something they’ve really wanted to set up for some time,” she said."

Movie on Iranian kidney transplant market--bureaucracy, price negotiations, and surgery

Buying and selling kidneys in Iran seems to involve a good deal of bureaucracy and lots of negotiations, followed, in this movie, by two living-donor transplants that seem to have been successful. Both buyers and sellers are poor...
The movie runs about fifty minutes. Here it is: Iranian Kidney Bargain Sale.

And see my earlier post: The market for kidneys in Iran

HT: Federico Echenique

A marketplace for Harvard babysitters

If you work at Harvard, you might be able to hire a Harvard student as a babysitter. Here's the announcement:

Dear Colleague,

I am writing to let you know about an exciting new service available exclusively to the Harvard community: It’s a Harvard PIN-protected babysitting website, called Web Access to Care at Harvard, or the WATCH portal.  Please visit the site at [xxx]

The WATCH portal links Harvard parents – faculty, staff and students – to Harvard students, both undergraduate and graduate, who want to babysit. In addition, Harvard employees are able to sponsor high school and college students who are members of their families to be babysitters.

If you are a parent and think you might need child care in the future, please register with the site and feel free to browse caregiver profiles. If you are actively looking for child care right now, please go ahead and post a job! And if you have high school or college age children interested in babysitting, register them as well.

We’re very excited about this new service and the opportunities it brings to maximize connections within the Harvard community.  

Kidney exchange--gaps in financing

Here's a disturbing editorial from the Globe and Mail, published Oct. 26, 2011. It represents one of the (many) gaps in financing that reflect the growth pangs of kidney exchange. This and other more systematic financial issues need to be resolved if kidney exchange (also called kidney paired donation or, in Canada apparently, kidney swaps) is to stabilize and reach its full potential as a treatment option. In this case an altruistic donor has been left without proper care.

Help the life-giver left with the disfigured body

"Donating a kidney to a stranger is an act of love – and of life. It allows a sick person to become healthy again, and saves the medical system $50,000 a year.

"There is inherent risk in all surgery, but donors assume that, if something goes wrong, the system will take care of them.

"However, that is not what happened to a man from British Columbia who donated his kidney to an anonymous recipient in Toronto in 2009, as part of an innovative new “kidney swap” program. He ended up with a bulge on the left side of his abdomen caused by a pinched nerve during surgery. “Every time I look down, I see this big flap of skin. The nerve that contracts the muscle was cut, which means that the area is flabby and lopsided,” he says. He has tried for two years to get B.C. Health to pay for the surgery to correct his asymmetrical abdomen; the ministry has refused, however, saying the $10,000 operation would be cosmetic. The Ontario hospital where he donated his kidney says it can't help him either."

The roommate problem on TV

James Boudreau writes to alert us to some matching theory on television:

"The NBC show ``Community'' chronicles the misadventures of a diverse and wacky group of students at a community college.  On the last night's episode (season 3, episode three, ``Competitive Ecology'') the group was confronted with the problem of dividing into pairs for the purpose of being lab partners.  When their initial pairings don't work out, one member of the group realizes that they are in a classic roommates problem and suggests that they re-match by writing down lists of ordinal preferences and submitting them to one member of the group who is unanimously selected  as the matchmaker.  Unfortunately, the algorithm that the matchmaker uses (which focuses on balancing popularity across the pairs) proves to be unstable--eventually the group is forced to share one set of equipment since they can not agree on pairings.

"The episode is currently available for free on Hulu.  The most relevant scene begins at about 8:20.  Later on, around 14:33, one member of the group even accuses others of strategically manipulating their preferences to suggest that he is unpopular. "

Buy and Sell First Dates (now we're just bargaining over the price)

That's the idea behind What's Your Price.com, a two sided dating platform in which Generous People (appears to be mostly guys) can negotiate a price to meet Attractive People (appears to be mostly girls). (It reminds me of the old joke whose punchline is "now we're just bargaining over the price."

How it works:Three Steps To Using WhatsYourPrice.com

• Fill out your profile and upload a photo...

  Your experience with WhatsYourPrice.com starts with filling out a profile about yourself, who you'd like to meet and what you expect on a first date. In order to use the website, you must have an approved profile, and at least one approve photo of yourself.

• Make an offer or accept an offer...

  Once you find the people you'd like to date, ask them out by making an offer. If you're a generous user, name the price you're willing to pay for the first date. And, if you're an attractive user, name the price you want to get paid for the first date. Our offer negotiating system will allow you to accept an offer, reject an offer, or counter with a different price.

• Send a message to setup a date!

  Once an offer is accepted, you're ready to plan the date. Simply write a message to schedule a time and place for your first date. It's simple and it's fun!

WhatsYourPrice.com First Date Etiquette

After you've accepted an offer for a first date, it's time to plan and schedule the first date. You may want to check out some of our first date ideas, but do try to be creative. The next thing you may be wondering is how does a generous user of the website go about paying an attractive user for the first date. Here are some general etiquette and rules regarding Do's and Don'ts.
* DO NOT pay or ask anyone for payment prior to meeting for a date
* If someone asks you to send money by Western Union, report them immediately
* Generous members are expected to pay for the date (there's no going dutch here)
* Our advice: Pay 50% of the date at the start of the date, and 50% at the end
* DO NOT accept personal checks or cashier's checks - there's just too much fraud
* CASH is king, and pay only when you meet your date in person


HT: James W. Boudreau

Brooklyn man pleads guilty to trafficking black market kidneys

Yesterday, in Trenton NJ, Brooklyn man pleads guilty to trafficking black market kidneys to N.J. residents

"The price was steep. As much as $160,000 to secure a donor willing to give up a human kidney for transplant.

"And Levy Itzhak Rosenbaum ... bragged on surveillance recordings that he had participated in many such black market deals.

"Today, the 60-year-old Israeli pleaded guilty in federal court to helping an FBI informant procure a kidney as part of an elaborate federal sting. At the same time, he admitted arranging transplants for three other New Jersey patients with failing kidneys — all of whom underwent surgery in out-of-state hospitals after paying Rosenbaum. None of the patients or hospitals was named, nor were they charged.

"It marked the first time in this country anyone has ever been convicted for brokering illegal kidney transplants for profit."
**********

See my earlier post on this case:

Monday, July 27, 2009

Corruption and kidneys in New Jersey and Brooklyn

***********

the Haaretz story is very good, so I'm quoting a lot of it below:
New York man pleads guilty to selling Israeli human organs

"His attorneys, Ronald Kleinberg and Richard Finkel, said in a statement that their client had performed a life-saving service for desperately ill people who had been languishing on official transplant waiting lists.

"The transplants were successful and the donors and recipients are now leading full and healthy lives," the statement said. "In fact, because of the transplants and for the first time in many years, the recipients are no longer burdened by the medical and substantial health dangers associated with dialysis and kidney failure."

"The lawyers added that Rosenbaum had never solicited clients, but that recipients had sought him out, and that the donors he arranged to give up kidneys were fully aware of what they were doing. The money involved, they argued, was for expenses associated with the procedures, which they claim were performed in prestigious American hospitals by experienced surgeons and transplant experts. The lawyers did not name the hospitals involved, nor are they named in court documents.

"Prosecutors argued that Rosenbaum was fully aware he was running an illicit and profitable operation - buying organs from vulnerable people in Israel for $10,000, and selling them to desperate, wealthy American patients.

"A black market in human organs is not only a grave threat to public health, it reserves lifesaving treatment for those who can best afford it at the expense of those who cannot," said New Jersey's U.S. Attorney, Paul Fishman. "We will not tolerate such an affront to human dignity."

"Each of the four counts carries a maximum five-year prison sentence plus a fine of up to $250,000. Rosenbaum also agreed to forfeit $420,000 in real or personal property that was derived from the illegal kidney sales.

...

"Although the hospitals where the operations Rosenbaum arranged have not been named, critics and experts on organ trafficking say many U.S. hospitals do not have vigorous enough procedures for looking into the source of the organs they transplant because such operations are lucrative.

...

"Under 1984 federal law, it is illegal for anyone to knowingly buy or sell organs for transplant. The practice is illegal just about everywhere else in the world, too.

"But demand for kidneys far outstrips the supply, with 4,540 people dying in the U.S. last year while waiting for a kidney, according to the United Network for Organ Sharing. As a result, there is a thriving black market for kidneys around the world.

"Art Caplan, the director of the Center for Bioethics at the University of Pennsylvania and a co-chairman of a United Nations task force on organ trafficking, said kidneys are the most common of all trafficked organs because they can be harvested from live donors, unlike other organs. He said Rosenbaum had pleaded guilty to one of the "most heinous crimes against another human being."

"Internationally, about one quarter of all kidneys appear to be trafficked," Caplan said. "But until this case, it had not been a crime recognized as reaching the United States."

NBER market design conference, October 28-29, 2011

NATIONAL BUREAU OF ECONOMIC RESEARCH, Market Design Working Group Meeting, Susan Athey and Parag Pathak Organizers, October 28-29, 2011.

PROGRAM Friday, October 28 8:15 am Shuttles leave Royal Sonesta Hotel for NBER 8:30 am Continental Breakfast 8:55 am Welcome and Opening Remarks 9:00 am Matching with Contracts Tayfun Sonmez, Boston College Tobias Switzer, US Air Force Matching with (Branch-of-Choice) Contracts at United States Military Academy John Hatfield, Stanford University Scott Duke Kominers, University of ChicagoMultilateral Matching  10:30 am Break 10:45 am Strategy-Proofness and Efficiency in Complex Design Problems Eduardo Azevedo, Harvard University Eric Budish, University of Chicago Strategyproofness in the Large as a Desideratum for Market Design Clayton Featherstone, Harvard University A Rank-Based Refinement of Ordinal Efficiency and a New (but Familiar) Class of Ordinal Assignment Mechanisms 12:15 pm Lunch 1:15 pm Information and Price Discovery Haoxiang Zhu, Stanford University Do Dark Pools Harm Price Discovery? Mark Satterthwaite, Northwestern University Steven Williams, University of Illinois at Urbana-Champaign Konstantinos Zachariadis, London School of Economics Price Discovery Steven Tadelis, UC, Berkeley and eBay Research Labs Florian Zettelmeyer, Northwestern University and NBER Information Disclosure as a Matching Mechanism: Theory and Evidence from a Field Experiment  3:30 pm Break 3:45 pm Kidney Exchange Tayfun Sonmez, Boston College Utku Unver, Boston College Altruistically Unbalanced Kidney Exchange Itai Ashlagi, Massachusetts Institute of Technology David Gamarnik, Massachusetts Institute of Technology Alvin Roth, Harvard University and NBER The Need for (long) Chains in Kidney Exchange 5:15 pm Adjourn 5:20 pm Shuttles leave NBER for Royal Sonesta Hotel 6:00 pm Dinner Bambara Restaurant25 Edwin H. Land Blvd., Cambridge (across the street from the Royal Sonesta Hotel) Saturday, October 29 8:15 am Shuttles leave Royal Sonesta Hotel for NBER 8:30 am Continental Breakfast 9:00 am Online Markets Susan Athey, Harvard University and NBER Ittai Abraham, Microsoft Research Moshe Babaioff, Microsoft Research Michael Grubb, Massachusetts Institute of TechnologyPeaches, Lemons, and Cookies: Designing Auction Markets with Dispersed Information  Liran Einav, Stanford University and NBER Theresa Kuchler, Stanford University Jonathan Levin, Stanford University and NBER Neel Sundaresan, eBay Research LabsLearning from Seller Experiments in Online Markets  10:30 am Break 10:45 am User Interfaces and User Generated Content Arpita Ghosh, Yahoo! Research Preston McAfee, Yahoo! ResearchIncentivizing High-Quality User-Generated Content  Sven Seuken, University of Zurich David Parkes, Harvard University Eric Horvitz, Microsoft Research Kamal Jain, eBay Research Labs Mary Czerwinski, Microsoft Research Desney Tan, Microsoft ResearchMarket User Interface Design  12:15 pm Lunch 1:15 pm School Choice and Student Assignment Fuhito Kojima, Stanford University John Hatfield, Stanford University Yusuke Narita, Massachusetts Institute of Technology Promoting School Competition Through School Choice: A Market Design Approach Yan Chen, University of Michigan Onur Kesten, Carnegie Mellon University From Boston to Shanghai to Deferred Acceptance: Theory and Experiments on A Family of School Choice Mechanisms 2:45 pm Adjourn ================== Format:  Authors should plan to speak for about 30-35 minutes.

Harvard celebrates first kidney transplant

In connection with Harvard's 375th anniversary, the Gazette is taking note of some key events:  A transplant makes history--Joseph Murray’s 1954 kidney operation ushered in a new medical era

"“If you’re going to worry about what people say, you’re never going to make any progress,” Murray said during a recent interview at his home in Wellesley Hills, Mass."
...
"After the operation, Murray’s work on transplantation continued. Despite his success with the Herricks, the problem of rejection generally still presented a high hurdle.
In the years that followed, Murray used first X-rays and then drugs to suppress the immune system and keep the body from rejecting the grafted tissue, but there were few successes. Through those dark years, he and his colleagues pressed on, inspired by the dying patients who volunteered for surgery in hopes that, even if they didn’t make it, enough could be learned that success would come one day.
“We were trying. In spite of several failures, we felt we were getting close,” Murray said. “It’s difficult to translate the optimism of the Brigham staff and hospital. The administration really backed us.”
Finally, in 1962, in collaboration with scientists from the drug company Burroughs-Wellcome, Murray tried a drug, Imuran, on 23-year-old Mel Doucette, who had received a kidney from an unrelated cadaver donor. The success of that operation and the anti-rejection drug cleared the final hurdle to widespread organ transplantation between unrelated donors, and set the stage for the many refinements and breakthroughs by others in the years to come."

Where do you fall on the US income distribution? CBO report

The Congressional Budget Office issued a report today,  Trends in the Distribution of Household Income Between 1979 and 2007.  Growth for the top 1% has been disproportionately high.
It includes the following interesting table, among many others:

"In this analysis, CBO presents data on income and taxes for various subgroups of the population, such as the lowest 20 percent or the top 1 percent. In constructing those
subgroups, households are ranked by income that is adjusted for household size. Each subgroup of the population contains an equal number of people, but because households vary in size, subgroups generally contain unequal numbers of households."

Update: the NY Times has an interactive gadget that allows you to click on an iconic percentile and see some data...http://www.nytimes.com/interactive/2011/10/30/nyregion/where-the-one-percent-fit-in-the-hierarchy-of-income.html

Horse meat in the U.S.

The NY Times reports on how the market has responded to the closing of U.S. slaughterhouses for horses (related to the repugnance felt by some to the eating of horse meat.):  Slaughter of Horses Goes On, Just Not in U.S.

"The closing of the country’s last meat processing plant that slaughtered horses for human consumption was hailed as a victory for equine welfare. But five years later just as many American horses are destined for dinner plates to satisfy the still robust appetites for their meat in Europe and Asia.

"Now they are carved into tartare de cheval or basashi sashimi in Mexico and Canada.

"That shift is one of the many unintended consequences of a de facto federal ban on horse slaughter, according to a recent federal government study. As the domestic market for unwanted horses shrinks, more are being neglected and abandoned, and roughly the same number — nearly 140,000 a year — are being killed after a sometimes grueling journey across the border.
...
"The study’s findings have been fiercely contested by animal welfare groups, which argue that most of the problems stem from the economic downturn and the high price of feed. The study also breathed new life into the long-smoldering battle over whether to allow the resumption of domestic horse slaughter or, alternatively, to prohibit the animals from being shipped abroad for their meat.

"In recent weeks lawmakers have pushed Congress to take action in both directions. The Government Accountability Office, which conducted the study, concluded that either option would be better than the status quo, but advocates on both sides, while hopeful, said a resolution did not appear imminent."

******
Here is the report by the Government Accountability Office,

HORSE WELFARE: Action Needed to Address Unintended Consequences from Cessation of Domestic Slaughter 

"GAO analysis shows that U.S. horses intended for slaughter are now traveling significantly greater distances to reach their final destination, where they are not covered by U.S. humane slaughter protections."

Tayfun Sonmez on matching officers to military branches

On Friday Tayfun Sonmez gave a stimulating presentation of his analysis of West Point's system for assigning graduating officers to military branches: Tayfun Sonmez and Tobias Switzer, Matching with (Branch-of-Choice) Contracts at United States Military Academy

In a second paper, he was more critical of the ROTC assignment system.

Dating as a two sided platform

From a new Wall Street dating website:

"Ladies pay $15/month membership fee and are allowed to browse and contact as many men as they desire. Gentlemen can browse as much as they want and are offered “Spark Packs” for $15 which allows them to contact 5 ladies of their choice. This way Ladies receive meaningful interactions from Gentlemen that are genuinely interested, while Gentlemen no longer need to spam dozens of profiles to get a response."

http://dealbreaker.com/2011/10/its-about-ambition-and-personality-not-cash/


HT Eduardo Azevedo

An Incentive System with Heart: Wharton celebrates Judd Kessler

That's the subheading of an article in which Wharton celebrates the work of Judd Kessler: How to Encourage People to Become Organ Donors: An Incentive System with Heart

"The decision to be an organ donor may seem easy for some: You sign an agreement that will let your heart, kidneys, liver, pancreas and other organs be used after your death in a way that helps the recipients lead fuller, healthier lives.
But for other people, the choice is harder. Some fear that a doctor may not work as hard to save them because he or she wants their organs for other patients, or that their organs might be removed prematurely (although there is no evidence to support either of these concerns). There may also be a psychological cost of having to think about your own death at a time when you are still relatively healthy. Other people may simply not want to bother with a program that doesn't directly benefit them.
It is against this backdrop that Wharton business and public policy professor Judd Kessler and Harvard economics professor Alvin Roth set out to see whether changes in the management of organ waiting lists could increase the number of donors."
...


The paper is here:
Kessler, Judd B. and Alvin E. Roth, '' Organ Allocation Policy and the Decision to Donate,'' American Economic Review, forthcoming.


Update: when the Financial Times covered the story (scroll down here) they gave Judd a new first name...