Graduating in a recession is no fun, and aspects of the way lawyers are hired and promoted may make that particularly so not only for this year's law grads, but for next year's, since many law firms essentially hire after the second year of law school: Downturn Dims Prospects Even at Top Law Schools .
"Discussions at industry roundtables and casual talk among officials at leading schools and firms suggest a consensus that interview dates should be pushed back to the spring of the second year, if not the third year. The recent problems have arisen, reform-minded critics say, because the legal industry essentially hires two full years ahead of when employees begin to work. And because young lawyers have to be advanced by lockstep every year, it is difficult to make recruiting changes that are responsive to shocks in business.
“There’s a long list of issues that need re-examining,” said Ralph Baxter, the chairman of Orrick. “The current economic circumstances have helped people see the economic inefficiencies we’ve been living with.”
Even lockstep, as sacred a pillar of Big Law as the billable hour, has been undermined by the hiring headaches of the last year, some argue. Orrick and another major firm, Howrey, have introduced innovative programs for associates based on apprenticeships or tiered systems that depart from the traditional “up or out” partner-track models. Some industry observers say their moves represent first steps that may ultimately give firms greater flexibility in hiring."
Wednesday, September 9, 2009
Tuesday, September 8, 2009
Matching for school choice
School choice has received some extended coverage lately, with articles intended to appeal to a broad audience interested in education issues and mathematics, respectively. Both focus on work that Atila Abdulkadiroglu, Parag Pathak, Tayfun Sonmez and I have had the opportunity to help put into practice (and both are related to ongoing work in CA being spearheaded by Muriel Niederle and Clayton Featherstone).
Over at Education Sector, the September 2009 issue of their feature Ideas at Work covers the new school choice mechanisms for Boston Public Schools and New York City high schools:
MATCHMAKING: ENABLING MANDATORY PUBLIC SCHOOL CHOICE IN NEW YORK AND BOSTON, By Thomas Toch and Chad Aldeman. (It also comes with a 10 minute podcast you can listen to: "A Closer Look at Mandatory School Choice", in which Aldeman interviews me and Atila...)
Joseph Malkevitch has written one of the American Mathematical Society's Monthly Essays, called School Choice.
It's an introduction to Gale and Shapley's basic deferred acceptance algorithm, with a discussion of some applications, with attention paid to the fact that the student proposing algorithm makes it safe for families to reveal their preferences.
Over at Education Sector, the September 2009 issue of their feature Ideas at Work covers the new school choice mechanisms for Boston Public Schools and New York City high schools:
MATCHMAKING: ENABLING MANDATORY PUBLIC SCHOOL CHOICE IN NEW YORK AND BOSTON, By Thomas Toch and Chad Aldeman. (It also comes with a 10 minute podcast you can listen to: "A Closer Look at Mandatory School Choice", in which Aldeman interviews me and Atila...)
Joseph Malkevitch has written one of the American Mathematical Society's Monthly Essays, called School Choice.
It's an introduction to Gale and Shapley's basic deferred acceptance algorithm, with a discussion of some applications, with attention paid to the fact that the student proposing algorithm makes it safe for families to reveal their preferences.
Federal Judges Law Clerk Hiring
Today, the day after Labor Day, as law students begin their third and final year of law school, is the time when Federal judges are supposed to begin hiring their law clerks for next year. (A clerkship, particularly with an appellate court judge, is a very career enhancing first job for a new law grad.)
While the very beginning of the third year of law school might seem early to be sorting out the plum jobs, in fact it is quite late by the historical standards of this market. Over the last few decades, hiring has periodically unraveled back well into the second year of law school. And so, not for the first time, judges are trying to restrain themselves. Here's the current plan and it's key dates: Federal Judges Law Clerk Hiring Plan with Critical Dates .
Tuesday, Sept. 8 is the "first date when applications may be received." Judges are then supposed to wait until Friday Sept. 11 before contacting candidates to schedule interviews, and to wait until the following Thursday, Sept. 17, before actually conducting any interviews or making any offers. Offers, often exploding offers that must be answered immediately, can be made at the interview, and so much of the market is over by the end of the first day. (Yesterday's post included my favorite exploding offers story.)
One more thing. Judges cheat. (My coauthors tell me I'm not supposed to say that, rather, some judges do not comply with the guidelines.) So a nonnegligible part of the market is over before it's supposed to be over. Some part of the market may even be over before it's supposed to have begun. In our 2007 Chicago Law Review article The New Market for Federal Judicial Law Clerks, a third of the judges acknowledged that they cheated. But for the time being they were largely cheating by only a few days, so that the Labor Day focal point has remained.
The law blogs are full of contemporary reports about this year's market. See e.g. Getting Your Clerkship Before Labor Day? It's Not Just for Graduates Anymore and Clerkship Application Season: Open Thread
There are also some blogs that will post news in real time, including when particular judges have begun to hire, and when they finish. They open a window on the amount of "non-compliance." See Law Clerk Addict, and Clerkship Notification Blog .
The situation well before the current attempt to organize the clerkship market is described here: Federal Court Clerkships in Roth, A.E. and X. Xing, "Jumping the Gun: Imperfections and Institutions Related to the Timing of Market Transactions," American Economic Review, 84, September, 1994, 992-1044
The more proximate history of the market before the current attempt is here:
Avery, Christopher, Christine Jolls, Richard A. Posner, and Alvin E. Roth, "The Market for Federal Judicial Law Clerks" University of Chicago Law Review, 68, 3, Summer, 2001, 793-902.(online at SSRN)
The just-prior attempt to organize the market is described here, and investigated experimentally:
Haruvy, Ernan, Alvin E. Roth, and M. Utku Unver, “The Dynamics of Law Clerk Matching: An Experimental and Computational Investigation of Proposals for Reform of the Market,” Journal of Economic Dynamics and Control, 30, 3 , March 2006, Pages 457-486. (With appendices and experimental instructions here.)
And the early experience with the current market organization is described here (with lots of illustrative quotes from clerkship applicants).
Avery, Christopher, Jolls, Christine, Posner, Richard A. and Roth, Alvin E., "The New Market for Federal Judicial Law Clerks" . University of Chicago Law Review, 74, Spring 2007, 447-486.
While the very beginning of the third year of law school might seem early to be sorting out the plum jobs, in fact it is quite late by the historical standards of this market. Over the last few decades, hiring has periodically unraveled back well into the second year of law school. And so, not for the first time, judges are trying to restrain themselves. Here's the current plan and it's key dates: Federal Judges Law Clerk Hiring Plan with Critical Dates .
Tuesday, Sept. 8 is the "first date when applications may be received." Judges are then supposed to wait until Friday Sept. 11 before contacting candidates to schedule interviews, and to wait until the following Thursday, Sept. 17, before actually conducting any interviews or making any offers. Offers, often exploding offers that must be answered immediately, can be made at the interview, and so much of the market is over by the end of the first day. (Yesterday's post included my favorite exploding offers story.)
One more thing. Judges cheat. (My coauthors tell me I'm not supposed to say that, rather, some judges do not comply with the guidelines.) So a nonnegligible part of the market is over before it's supposed to be over. Some part of the market may even be over before it's supposed to have begun. In our 2007 Chicago Law Review article The New Market for Federal Judicial Law Clerks, a third of the judges acknowledged that they cheated. But for the time being they were largely cheating by only a few days, so that the Labor Day focal point has remained.
The law blogs are full of contemporary reports about this year's market. See e.g. Getting Your Clerkship Before Labor Day? It's Not Just for Graduates Anymore and Clerkship Application Season: Open Thread
There are also some blogs that will post news in real time, including when particular judges have begun to hire, and when they finish. They open a window on the amount of "non-compliance." See Law Clerk Addict, and Clerkship Notification Blog .
The situation well before the current attempt to organize the clerkship market is described here: Federal Court Clerkships in Roth, A.E. and X. Xing, "Jumping the Gun: Imperfections and Institutions Related to the Timing of Market Transactions," American Economic Review, 84, September, 1994, 992-1044
The more proximate history of the market before the current attempt is here:
Avery, Christopher, Christine Jolls, Richard A. Posner, and Alvin E. Roth, "The Market for Federal Judicial Law Clerks" University of Chicago Law Review, 68, 3, Summer, 2001, 793-902.(online at SSRN)
The just-prior attempt to organize the market is described here, and investigated experimentally:
Haruvy, Ernan, Alvin E. Roth, and M. Utku Unver, “The Dynamics of Law Clerk Matching: An Experimental and Computational Investigation of Proposals for Reform of the Market,” Journal of Economic Dynamics and Control, 30, 3 , March 2006, Pages 457-486. (With appendices and experimental instructions here.)
And the early experience with the current market organization is described here (with lots of illustrative quotes from clerkship applicants).
Avery, Christopher, Jolls, Christine, Posner, Richard A. and Roth, Alvin E., "The New Market for Federal Judicial Law Clerks" . University of Chicago Law Review, 74, Spring 2007, 447-486.
Monday, September 7, 2009
Exploding offers
My favorite exploding offer story is probably this one:
"I received the offer via voicemail while I was in flight to my second interview. The judge actually left three messages. First, to make the offer. Second, to tell me that I should respond soon. Third, to rescind the offer.
It was a 35 minute flight." −2005 applicant for federal judicial clerkships (p448 of "The New Market for Federal Judicial Law Clerks" )
Exploding offers can have a malign effect on market performance. Here's a just-published experimental investigation that focuses on how exploding offers contribute to the unraveling of a market:
Niederle, Muriel, and Alvin E. Roth, “Market Culture: How Rules Governing Exploding Offers Affect Market Performance," American Economic Journal: Microeconomics, 1, 2, August 2009, 199-219.
(In case you were always wondering how lawyers and gastroenterologists are similar, and different, these two papers will give you some clues, at least for when they are looking for jobs...)
Here's the Abstract of the AEJ Micro paper: Many markets encounter difficulty maintaining a thick marketplace because they experience transactions made at dispersed times. To address such problems, many markets try to establish norms concerning when offers can be made, accepted and rejected. Examining such markets suggests it is difficult to establish a thick market at an efficient time if firms can make exploding offers, and workers cannot renege on early commitments. Laboratory experiments allow us to isolate the effects of exploding offers and binding acceptances. In a simple experiment, we find inefficient early contracting when firms can make exploding offers and applicants’ acceptances are binding.
"Death pools", coming to life again
The NY Times reports on efforts to buy and securitize life insurance policies, that would be sold to investors by people with terminal illnesses: Wall Street Pursues Profit in Bundles of Life Insurance . The idea is simple enough:
"Defenders of life settlements argue that creating a market to allow the ill or elderly to sell their policies for cash is a public service. Insurance companies, they note, offer only a “cash surrender value,” typically at a small fraction of the death benefit, when a policyholder wants to cash out, even after paying large premiums for many years.
Enter life settlement companies. Depending on various factors, they will pay 20 to 200 percent more than the surrender value an insurer would pay. "
...
"Mr. Terrell was the co-head of Bear Stearns’s longevity and mortality desk — which traded unrated portfolios of life settlements — and later worked at Goldman Sachs’s Institutional Life Companies, a venture that was introducing a trading platform for life settlements. He thinks securitized life policies have big potential, explaining that investors who want to spread their risks are constantly looking for new investments that do not move in tandem with their other investments.
“It’s an interesting asset class because it’s less correlated to the rest of the market than other asset classes,” Mr. Terrell said. "
But life insurance is the kind of product that has always had at least a tinge of repugnance, which is why many states have "insurable interest" laws saying that someone can only purchase insurance on your life if they have a reason to want you to be alive. "As discussed by Justice Oliver Wendell Holmes Jr. in a 1911 Supreme Court case: “A contract of insurance upon a life in which the insured has no interest is a pure wager that gives the insured a sinister counter interest in having the life come to an end” "
That's from my paper Repugnance as a Constraint on Markets , where I went on to say"The insurance industry lobbies against Stranger (or Investor) Owned Life Insurance (SOLI) and “viatical settlements,” which are third party markets and funds that purchase life insurance policies from elderly or terminally ill patients who wish to realize the cash value of their policies while still alive. The arguments against such funds often focus on the repugnance of having life insurance held by an entity that profits from deaths (in contrast to insurance companies, which make money when their customers continue living). Of course, sellers of annuities also profit from untimely deaths."(p41)
Some of the quotations from the NY Times story make me wonder whether the securitizers have fully mastered the potential repugnance issue of this kind of investment, and whether that might ultimately affect its success. See if any of these lines strike you as courting a reaction of repugnance.
"Goldman Sachs has developed a tradable index of life settlements, enabling investors to bet on whether people will live longer than expected or die sooner than planned....Spokesmen for Credit Suisse and Goldman Sachs declined to comment. "
...
"In addition to fraud, there is another potential risk for investors: that some people could live far longer than expected.
It is not just a hypothetical risk. That is what happened in the 1980s, when new treatments prolonged the life of AIDS patients. Investors who bought their policies on the expectation that the most victims would die within two years ended up losing money.
It happened again last fall when companies that calculate life expectancy determined that people were living longer. "
...
"The solution? A bond made up of life settlements would ideally have policies from people with a range of diseases — leukemia, lung cancer, heart disease, breast cancer, diabetes, Alzheimer’s. That is because if too many people with leukemia are in the securitization portfolio, and a cure is developed, the value of the bond would plummet. "
...
"But even with a math whiz calculating every possibility, some risks may not be apparent until after the fact. How can a computer accurately predict what would happen if health reform passed, for example, and better care for a large number of Americans meant that people generally started living longer? Or if a magic-bullet cure for all types of cancer was developed? If the computer models were wrong, investors could lose a lot of money."
"Defenders of life settlements argue that creating a market to allow the ill or elderly to sell their policies for cash is a public service. Insurance companies, they note, offer only a “cash surrender value,” typically at a small fraction of the death benefit, when a policyholder wants to cash out, even after paying large premiums for many years.
Enter life settlement companies. Depending on various factors, they will pay 20 to 200 percent more than the surrender value an insurer would pay. "
...
"Mr. Terrell was the co-head of Bear Stearns’s longevity and mortality desk — which traded unrated portfolios of life settlements — and later worked at Goldman Sachs’s Institutional Life Companies, a venture that was introducing a trading platform for life settlements. He thinks securitized life policies have big potential, explaining that investors who want to spread their risks are constantly looking for new investments that do not move in tandem with their other investments.
“It’s an interesting asset class because it’s less correlated to the rest of the market than other asset classes,” Mr. Terrell said. "
But life insurance is the kind of product that has always had at least a tinge of repugnance, which is why many states have "insurable interest" laws saying that someone can only purchase insurance on your life if they have a reason to want you to be alive. "As discussed by Justice Oliver Wendell Holmes Jr. in a 1911 Supreme Court case: “A contract of insurance upon a life in which the insured has no interest is a pure wager that gives the insured a sinister counter interest in having the life come to an end” "
That's from my paper Repugnance as a Constraint on Markets , where I went on to say"The insurance industry lobbies against Stranger (or Investor) Owned Life Insurance (SOLI) and “viatical settlements,” which are third party markets and funds that purchase life insurance policies from elderly or terminally ill patients who wish to realize the cash value of their policies while still alive. The arguments against such funds often focus on the repugnance of having life insurance held by an entity that profits from deaths (in contrast to insurance companies, which make money when their customers continue living). Of course, sellers of annuities also profit from untimely deaths."(p41)
Some of the quotations from the NY Times story make me wonder whether the securitizers have fully mastered the potential repugnance issue of this kind of investment, and whether that might ultimately affect its success. See if any of these lines strike you as courting a reaction of repugnance.
"Goldman Sachs has developed a tradable index of life settlements, enabling investors to bet on whether people will live longer than expected or die sooner than planned....Spokesmen for Credit Suisse and Goldman Sachs declined to comment. "
...
"In addition to fraud, there is another potential risk for investors: that some people could live far longer than expected.
It is not just a hypothetical risk. That is what happened in the 1980s, when new treatments prolonged the life of AIDS patients. Investors who bought their policies on the expectation that the most victims would die within two years ended up losing money.
It happened again last fall when companies that calculate life expectancy determined that people were living longer. "
...
"The solution? A bond made up of life settlements would ideally have policies from people with a range of diseases — leukemia, lung cancer, heart disease, breast cancer, diabetes, Alzheimer’s. That is because if too many people with leukemia are in the securitization portfolio, and a cure is developed, the value of the bond would plummet. "
...
"But even with a math whiz calculating every possibility, some risks may not be apparent until after the fact. How can a computer accurately predict what would happen if health reform passed, for example, and better care for a large number of Americans meant that people generally started living longer? Or if a magic-bullet cure for all types of cancer was developed? If the computer models were wrong, investors could lose a lot of money."
Sunday, September 6, 2009
Matching children to classes
If the only thing that mattered about an elementary school class was the teacher, then matching children to classes would be simpler than it is (and more like school choice as we usually think of it). But it is a more complex problem when you take into account that it would be good if your child could be in a classroom with his friends, but without the kids who fight with him.
Slate has a story, Should parents meddle in their kids' classroom assignments?, which in turn prompted a post, the class matching problem, by Joshua Gans on his economics-and-parenting blog Game Theorist. (Gans' contribution to the "-onomics" library is called Parentonomics. He's also a prolific contributor to the econ- literature, and is likely to be a sabbatical visitor at Harvard in 2010. See my earlier post Market for ideas.)
In elementary school, kids have only one class. In high school, you have to assign each kid a bundle of classes. That makes the problem both harder—because bundles are hard, and there are complementarities—and easier, because one class isn’t divisible, but bundles are…you can give a high school kid some good classes and some bad ones, and have it come out to an ok schedule. Eric Budish has made some progress on this, although without worrying about putting friends in the same class (see my earlier post Course allocation, by Eric Budish )
Slate has a story, Should parents meddle in their kids' classroom assignments?, which in turn prompted a post, the class matching problem, by Joshua Gans on his economics-and-parenting blog Game Theorist. (Gans' contribution to the "-onomics" library is called Parentonomics. He's also a prolific contributor to the econ- literature, and is likely to be a sabbatical visitor at Harvard in 2010. See my earlier post Market for ideas.)
In elementary school, kids have only one class. In high school, you have to assign each kid a bundle of classes. That makes the problem both harder—because bundles are hard, and there are complementarities—and easier, because one class isn’t divisible, but bundles are…you can give a high school kid some good classes and some bad ones, and have it come out to an ok schedule. Eric Budish has made some progress on this, although without worrying about putting friends in the same class (see my earlier post Course allocation, by Eric Budish )
Roommate matching
"Male or female? Smoker or nonsmoker?
Those two questions have long been the basis for the University of Arizona’s roommate-pairing formula. But a year ago the university decided to give incoming students seeking deeper compatibility another option: shopping for their roommates on the Web."
That's the first paragraph of an interesting story at Inside Higher Ed about using the web to improve roommate matching: Match at First Site .
"Arizona is one of a small but growing number of colleges that have contracted with RoommateClick, a service that lets students take the lead on a task that has historically fallen to campus housing officials by browsing and communicating with future classmates who have also signed up for the service. Students who have hit it off online can then request to bunk with each other."
For a different market, see my earlier post Housemate match .
Those two questions have long been the basis for the University of Arizona’s roommate-pairing formula. But a year ago the university decided to give incoming students seeking deeper compatibility another option: shopping for their roommates on the Web."
That's the first paragraph of an interesting story at Inside Higher Ed about using the web to improve roommate matching: Match at First Site .
"Arizona is one of a small but growing number of colleges that have contracted with RoommateClick, a service that lets students take the lead on a task that has historically fallen to campus housing officials by browsing and communicating with future classmates who have also signed up for the service. Students who have hit it off online can then request to bunk with each other."
For a different market, see my earlier post Housemate match .
Saturday, September 5, 2009
Weeding as market regulation
We have what our friend Bettina Klaus calls a Sisyphus garden: we can weed for an hour whenever we want, and get trashbags full of biomass.
Weeding is a bit like being a regulator, you have to decide what counts as a weed, where. This always gets me thinking about what constitutes "unfair" competition, or maybe "competition in restraint of" what we would like the garden to be.
I am a permissive regulator; if we have planted some ground cover in one place, and it also takes root where we have planted a different ground cover, let competition decide the winner. "Unfair" competition takes the form of parasitism (vines that reach for sunlight by climbing over their slower growing hosts) or shallowly rooted, ephemeral tall plants that spring up between the roots of longer lived plants, but compete with them for sunlight and water.
Weeding is a bit like being a regulator, you have to decide what counts as a weed, where. This always gets me thinking about what constitutes "unfair" competition, or maybe "competition in restraint of" what we would like the garden to be.
I am a permissive regulator; if we have planted some ground cover in one place, and it also takes root where we have planted a different ground cover, let competition decide the winner. "Unfair" competition takes the form of parasitism (vines that reach for sunlight by climbing over their slower growing hosts) or shallowly rooted, ephemeral tall plants that spring up between the roots of longer lived plants, but compete with them for sunlight and water.
Friday, September 4, 2009
Market Design Blog: the second year
Peter Coles and I began this blog in September 2008 to provide some additional motivation and context for our market design course. We weren't sure what we would blog about, except that we knew that we'd link to news stories related to market design either as a verb (designing markets) or as a noun (how the design of a market influences its performance). I also anticipated I'd follow up my interest in repugnant transactions, i.e. transactions that aren't represented in the marketplace because, even though some people might like to engage in them, others object.
Judging from the keywords we assigned to blog posts, repugnance turned out to be the modal subject. Other popular keywords have been (with some overlap): the academic marketplace, auctions, college admissions, compensation for donors, kidney exchange, market design, marriage, matching, and school choice. I retrospectively added a keyword, entrepreneurial market design, which is Peter's phrase.
We kept the blog going even after the course ended (it turns out I like to blog), and picked up some readers over the course of the year, some endorsements from much more famous bloggers (e.g. here and here), and even some friendly advice on how to get more readers (for which, thanks, although I'll probably keep it going as is for a while).
So, if you're taking the course, or if you're new to the blog for some other reason, welcome aboard. We're still figuring out what the blog is for, but it turns out that market design is everywhere, so there's lots to blog about. I'm looking forward to year 2.
Thursday, September 3, 2009
Kidney donations, incentives, sales, legislation
An interview including Alex Tabarrok, Sally Satel, and Frank Delmonico, covering the range of viewpoints on the subject.
"Last year Pennsylvania Senator Arlen Specter floated a draft bill that could have cleared the way for states to offer non-cash incentives. ...
But groups including the National Kidney Foundation rejected Specter's proposal, now a spokeswoman for the Senator says he has no plans to introduce the bill."
Here is one draft of Senator Specter's proposed bill (on the site of the American Society of Transplant Surgeons--it was never introduced into the formal legislative process): Organ Donation Clarification Act of 2008 - Proposed Specter Bill
The current issue of the American Journal of Transplantation contains a survey of the ASTS membership, which finds that a majority of the surgeons responding support various income tax credits, insurance, and reimbursement for funeral expenses and lost wages, but oppose cash payments to the donor, donor's family or estate. (Rodrigue et al., "Stimulus for Organ Donation: A Survey of the American Society of Transplant Surgeons Membership," AJT, 2009, 9, 2172-2176.
"Last year Pennsylvania Senator Arlen Specter floated a draft bill that could have cleared the way for states to offer non-cash incentives. ...
But groups including the National Kidney Foundation rejected Specter's proposal, now a spokeswoman for the Senator says he has no plans to introduce the bill."
Here is one draft of Senator Specter's proposed bill (on the site of the American Society of Transplant Surgeons--it was never introduced into the formal legislative process): Organ Donation Clarification Act of 2008 - Proposed Specter Bill
The current issue of the American Journal of Transplantation contains a survey of the ASTS membership, which finds that a majority of the surgeons responding support various income tax credits, insurance, and reimbursement for funeral expenses and lost wages, but oppose cash payments to the donor, donor's family or estate. (Rodrigue et al., "Stimulus for Organ Donation: A Survey of the American Society of Transplant Surgeons Membership," AJT, 2009, 9, 2172-2176.
Bebchuk on bonuses
Bonus Guarantees Can Fuel Risky Moves by Lucian Bebchuk in the WSJ:
"Financial firms seeking to attract and retain talent are reported to be making a substantial use of guaranteed bonuses, and the French Economy Minister recently called for limits on guaranteed bonuses. While many now focus on how using guaranteed bonuses affects the level of pay, it is important to recognize their effect on incentives. Guaranteed bonuses create perverse incentives to take excessive risks, and they consequently could well be worse for incentives than straight salary."
"Financial firms seeking to attract and retain talent are reported to be making a substantial use of guaranteed bonuses, and the French Economy Minister recently called for limits on guaranteed bonuses. While many now focus on how using guaranteed bonuses affects the level of pay, it is important to recognize their effect on incentives. Guaranteed bonuses create perverse incentives to take excessive risks, and they consequently could well be worse for incentives than straight salary."
Policing the lobster commons
Lobsters are caught in traps that sit on the sea floor, marked by (and recovered via) buoys that float above, connected to the trap by a rope. Lobstermen in Maine are known for policing who sets traps where by cutting the lines (or threatening to cut the lines) of lobstermen who set traps outside of their territory. From time to time there's a question about whether the state should limit certain areas to local lobstermen. Now is such a time:
In Maine, Tensions Over Ailing Lobster Industry
"Officially, anyone with a Maine lobster license can set traps almost anywhere in state waters. Most lobstermen are allowed 800 traps each, making for a crowded ocean floor.
But unofficially, each harbor has its own boundaries, determined by local lobstermen over the decades. Newcomers often find their buoys snatched or their trap lines cut. The lobstermen who live on Maine’s rugged islands are especially territorial and known for practicing frontier justice; in one notorious case in 2000, two lobstermen fought over turf with a pitchfork and a fish gaff."
...
"The idea of a resident-only lobstering zone is not without precedent. The state approved a two-mile “conservation zone” around Monhegan Island in 1998, restricting access to local lobstermen, who had complained about interlopers from the mainland. "
...
"George Lapointe, the state’s commissioner of marine resources, said he had not yet decided whether to endorse a resident-only zone for Matinicus and had to consider the constitutional rights of all of the state’s roughly 5,800 licensed lobstermen.
“I’ve had three other islands say they’re interested in getting their own zone if we create one for Matinicus,” Mr. Lapointe said. “One of the concerns is the balkanization of lobster territories along the coast.”
He said that enforcing the zone around Monhegan had proved expensive for the state, and that while the shooting on Matinicus had put the island’s problems under a magnifying glass, lobstermen up and down Maine’s coast were hurting."
In Maine, Tensions Over Ailing Lobster Industry
"Officially, anyone with a Maine lobster license can set traps almost anywhere in state waters. Most lobstermen are allowed 800 traps each, making for a crowded ocean floor.
But unofficially, each harbor has its own boundaries, determined by local lobstermen over the decades. Newcomers often find their buoys snatched or their trap lines cut. The lobstermen who live on Maine’s rugged islands are especially territorial and known for practicing frontier justice; in one notorious case in 2000, two lobstermen fought over turf with a pitchfork and a fish gaff."
...
"The idea of a resident-only lobstering zone is not without precedent. The state approved a two-mile “conservation zone” around Monhegan Island in 1998, restricting access to local lobstermen, who had complained about interlopers from the mainland. "
...
"George Lapointe, the state’s commissioner of marine resources, said he had not yet decided whether to endorse a resident-only zone for Matinicus and had to consider the constitutional rights of all of the state’s roughly 5,800 licensed lobstermen.
“I’ve had three other islands say they’re interested in getting their own zone if we create one for Matinicus,” Mr. Lapointe said. “One of the concerns is the balkanization of lobster territories along the coast.”
He said that enforcing the zone around Monhegan had proved expensive for the state, and that while the shooting on Matinicus had put the island’s problems under a magnifying glass, lobstermen up and down Maine’s coast were hurting."
Wednesday, September 2, 2009
Craigslist and spam
Wired has a long article about Craigslist and its founder; the tone is simultaneously admiring and baffled: Why Craigslist Is Such a Mess. It's well worth reading.
Here's one paragraph that stood out:
"The battle flows back and forth. Captchas—distorted words that can be interpreted by humans more easily than by machines—tamed spam on craigslist for a while. Then it came back full force, not because the spammers had solved the difficult problem in artificial intelligence but because they had hacked an easier problem in global economics. I recently established a friendly email dialog with a young man in Dhaka, Bangladesh, who works on a 13-person team that creates craigslist spam. He fills in Captchas, creates new accounts with masked IP addresses, and posts ads all day long using text from a database provided by his employer, an anonymous spam king. The going price for a spam post on craigslist is about 50 cents, with large discounts for volume. When I told Buckmaster about my new friend, he took the news calmly. "These are technically sophisticated people who take pride in their work, and when we knock them down they don't just decide to go find something else to do. You could say we are breeding the perfect spammer." "
Here's one paragraph that stood out:
"The battle flows back and forth. Captchas—distorted words that can be interpreted by humans more easily than by machines—tamed spam on craigslist for a while. Then it came back full force, not because the spammers had solved the difficult problem in artificial intelligence but because they had hacked an easier problem in global economics. I recently established a friendly email dialog with a young man in Dhaka, Bangladesh, who works on a 13-person team that creates craigslist spam. He fills in Captchas, creates new accounts with masked IP addresses, and posts ads all day long using text from a database provided by his employer, an anonymous spam king. The going price for a spam post on craigslist is about 50 cents, with large discounts for volume. When I told Buckmaster about my new friend, he took the news calmly. "These are technically sophisticated people who take pride in their work, and when we knock them down they don't just decide to go find something else to do. You could say we are breeding the perfect spammer." "
Tuesday, September 1, 2009
Market for short basketball players
In China, "The Dream Basketball League was set up to allow players of "shorter" stature to compete on a level playing field, with a height limit of 6ft 2in (1.88m) imposed." But it's hard to enforce the rules (since players can hunker down when measured): "Too tall" player sparks fan violence
HT: Luke Coffman (who you could hire this year, if he's not too tall).
HT: Luke Coffman (who you could hire this year, if he's not too tall).
"Girl taxi" and "Ladies Nights"
The WSJ reports 'Girl Taxi' Service Offers Haven to Beirut's Women .
"...these days the city's transport staple is facing some serious competition from a growing army of female taxi drivers, dressed in stiff-collared white shirts, dark shades, pink ties and small pink flowers tucked into their flawlessly coiffed hair.
All of them drive for Banet Taxi, or "girl taxi" in Arabic. It is Lebanon's first cab service for women, by women. You can't miss the company's signature candy-pink cars."
...
"The company is part of a regional trend. Entrepreneurs across the Middle East have recognized the business potential in offering secure transportation options for women. Banet Taxi follows on the heels of successful women-only transportation models in Dubai, Tehran and Cairo."
..."It is the promise of a safe and uneventful ride that attracts a wide range of female passengers: older women who want a quiet drive, young women out partying until late at night, and even preschoolers put in the cars by their teachers.
Passengers' reasons for choosing Banet are based, in part, on their cultural and religious backgrounds. Beirut's population breaks down roughly into thirds, Christian, Sunni and Shiite. Conservative Muslim women might take Banet Taxi to accommodate rules against traveling with unknown men. Others just want to put comfort and safety first."
While single sex markets thrive in some venues, others use gender as a basis for discriminatory pricing, with different prices for men and women. Economists mostly don't find this malign in two-sided platforms like those that provide dating opportunities, since they need to attract both genders in comparable proportions. So, for example, some clubs have 'ladies nights,' in which women are admitted for free or at a lower cover charge.
One lawyer is very annoyed by this: N.Y. Lawsuit Calls 'Ladies' Night' Discriminatory . However Roy Den Hollander "ANTI-FEMINIST LAWYER"--N.Y. Times seems to be mostly losing these cases, and has drawn this unsympathetic portrait from the New Yorker: Hey, La-a-a-dies!
"...these days the city's transport staple is facing some serious competition from a growing army of female taxi drivers, dressed in stiff-collared white shirts, dark shades, pink ties and small pink flowers tucked into their flawlessly coiffed hair.
All of them drive for Banet Taxi, or "girl taxi" in Arabic. It is Lebanon's first cab service for women, by women. You can't miss the company's signature candy-pink cars."
...
"The company is part of a regional trend. Entrepreneurs across the Middle East have recognized the business potential in offering secure transportation options for women. Banet Taxi follows on the heels of successful women-only transportation models in Dubai, Tehran and Cairo."
..."It is the promise of a safe and uneventful ride that attracts a wide range of female passengers: older women who want a quiet drive, young women out partying until late at night, and even preschoolers put in the cars by their teachers.
Passengers' reasons for choosing Banet are based, in part, on their cultural and religious backgrounds. Beirut's population breaks down roughly into thirds, Christian, Sunni and Shiite. Conservative Muslim women might take Banet Taxi to accommodate rules against traveling with unknown men. Others just want to put comfort and safety first."
While single sex markets thrive in some venues, others use gender as a basis for discriminatory pricing, with different prices for men and women. Economists mostly don't find this malign in two-sided platforms like those that provide dating opportunities, since they need to attract both genders in comparable proportions. So, for example, some clubs have 'ladies nights,' in which women are admitted for free or at a lower cover charge.
One lawyer is very annoyed by this: N.Y. Lawsuit Calls 'Ladies' Night' Discriminatory . However Roy Den Hollander "ANTI-FEMINIST LAWYER"--N.Y. Times seems to be mostly losing these cases, and has drawn this unsympathetic portrait from the New Yorker: Hey, La-a-a-dies!
Monday, August 31, 2009
Market design courses this Fall at Harvard and MIT
In a sign that market design is taking root, there are four relevant courses being offered this Fall along the banks of the Charles. (Some are planned for the Spring as well, Susan Athey will offer one at Harvard and Tayfun Sonmez will offer another at Boston College) . The Fall offerings I know of are the following.
Hanna Halaburda at HBS will teach “Economics and Strategy for Market Intermediaries and Two-Sided Platforms” (Wednesdays, 9-noon).
The main topics of the course are market intermediaries, two-sided markets, and the impact of network effects on the competitive environment. The course will combine formal economic analysis --- using theoretical models --- with case study discussions focusing on strategic considerations that companies in two-sided markets face (e.g. in on-line dating market or e-commerce).
Peter Coles and I will be teaching Market Design.
Economics 2056a/HBS 4150
Littauer Center M-16 Meeting Time: F., 9-12 (First meeting Friday, Sept 4)
The course "Deals with the theory and practice of market design, with prominent examples drawn from auctions, labor markets, school choice, and kidney exchange. " Here is the Syllabus, Fall 2009 (still a work in progress).
This course has been evolving since I first taught it with Paul Milgrom, and then with Estelle Cantillon. Some alumni of the course (some of whom took it as undergrads) who are presently active in market design and/or matching are Muriel Niederle, John Asker, Nicole Immorlica, Mohammad Mahdian, Michael Ostrovsky, Parag Pathak, Fuhito Kojima, Robin Lee, Mihai Manea, and Eric Budish.
Hanna Halaburda at HBS will teach “Economics and Strategy for Market Intermediaries and Two-Sided Platforms” (Wednesdays, 9-noon).
The main topics of the course are market intermediaries, two-sided markets, and the impact of network effects on the competitive environment. The course will combine formal economic analysis --- using theoretical models --- with case study discussions focusing on strategic considerations that companies in two-sided markets face (e.g. in on-line dating market or e-commerce).
David Parkes in SEAS will lead a seminar, CS 286r: Topics at the Interface between Computer Science and Economics Assignment, Matching and Dymamics
Monday, Wednesday 1-2.30 PM "Recent years have seen an explosion of computer-mediated markets, exchanges, and mechanisms for assignment and production. Problems of preference elicitation and optimization are coupled with concerns for incentive compatibility so that participantscannot manipulate the outcome of a mechanism in their favor. Related challenges include promoting appropriate levels of effort by participants in competition platforms, and preventing transaction failure by unreputable participants in peer production systems. Example domains span from sponsored search, to auction platforms such as eBay, to competition platforms such as TopCoder, to matching programs for medical residents and high schools, to kidney exchanges (without money)." He writes "economists are very welcome ..."
Parag Pathak at MIT will teach Topics in Game Theory, MW4-5.30 (BEGINS OCT 26) (E51-385) He writes "the course will cover advanced topics in matching, auction theory and mechanism design, with an emphasis towards areas of recent research."
Peter Coles and I will be teaching Market Design.
Economics 2056a/HBS 4150
Littauer Center M-16 Meeting Time: F., 9-12 (First meeting Friday, Sept 4)
The course "Deals with the theory and practice of market design, with prominent examples drawn from auctions, labor markets, school choice, and kidney exchange. " Here is the Syllabus, Fall 2009 (still a work in progress).
This course has been evolving since I first taught it with Paul Milgrom, and then with Estelle Cantillon. Some alumni of the course (some of whom took it as undergrads) who are presently active in market design and/or matching are Muriel Niederle, John Asker, Nicole Immorlica, Mohammad Mahdian, Michael Ostrovsky, Parag Pathak, Fuhito Kojima, Robin Lee, Mihai Manea, and Eric Budish.
Health insurance and incentive compatibility
A widely linked post, called Unconscionable Math by the blogger known as Taunter discusses why health insurance companies don't try hard to check the facts on insurance applications. (They only check your application for fraud, he claims, when you get sick enough to make really big insurance claims, and then they may be able to decline to pay if they can make the fraud claim stick.)
He draws the analogy to Las Vegas casinos, which he says don't check that gamblers are of legal age unless they win big:
"Years ago I was walking a casino floor with a casino executive. It was an incredibly detailed tour, and we got to talking about pretty much everything that came to mind about crowds and gaming. Now, a clever observer might notice that even the tolerant people of Nevada will not allow alcohol in vending machines – wouldn’t want the little ones to be able to get a Bud Light without a human being verifying their ID. But there we were in the middle of acres of blinking lights, with absolutely no one making sure that underage kids weren’t walking up to a slot machine. Indeed, they don’t card for the table games.
The executive told me you are free to play if you are underage, you just aren’t free to win. You can sit down and pump your money into the slots, and if you look presentable you can drop some chips on blackjack or craps. However, if you should happen to start winning, the pit boss or security team will come over and check your ID. The house edge is 100%."
So...be careful with those insurance applications.
He draws the analogy to Las Vegas casinos, which he says don't check that gamblers are of legal age unless they win big:
"Years ago I was walking a casino floor with a casino executive. It was an incredibly detailed tour, and we got to talking about pretty much everything that came to mind about crowds and gaming. Now, a clever observer might notice that even the tolerant people of Nevada will not allow alcohol in vending machines – wouldn’t want the little ones to be able to get a Bud Light without a human being verifying their ID. But there we were in the middle of acres of blinking lights, with absolutely no one making sure that underage kids weren’t walking up to a slot machine. Indeed, they don’t card for the table games.
The executive told me you are free to play if you are underage, you just aren’t free to win. You can sit down and pump your money into the slots, and if you look presentable you can drop some chips on blackjack or craps. However, if you should happen to start winning, the pit boss or security team will come over and check your ID. The house edge is 100%."
So...be careful with those insurance applications.
Sunday, August 30, 2009
Misc. organ transplant links
The links below, which I collected over some time but never turned into blog posts, all have something interesting to say about transplantation.
Should We Legalize the Market for Human Organs? An NPR debate among Sally Satel, Amy Friedman, and Lloyd Cohen (arguing for), and James Childress, Frank Delmonico, and David Rothman (arguing against).
Lingering myths discourage organ donation from American Medical News:
"Only 38% of licensed drivers have joined their states' organ donor registries, with many deterred by long-held misconceptions about how the transplant system works, according to poll results released in April."
Organ donations decline with economy from the Miami Herald.
The numbers of organ donors is down, and experts say one reason may be the recession. But "Because of legislative action, Floridians starting in July will be able to register online to be an organ donor at donatelifeflorida.org ."
In the Kidney Trade: Seller Beware
"Need a kidney? You may be able to buy one in Pakistan, which has become one of the world’s largest “kidney bazaars,” according to an article published in the May-June issue of The Hastings Center Report, a bioethics journal.
But who sells their kidneys, and what becomes of these people afterwards? The article, by two doctors and a psychologist from Karachi, paints an ugly picture of the kidney business and challenges the argument made by some that selling organs is a great financial boon to the poor and that they are grateful for the chance to do it. "
A Better Way to Get a Kidney Daniel Rose in a NY Times OpEd proposes we shift to "opt out" for deceased donors.
National Paired Donation Network (Steve Woodle) does an exchange in Pittsburgh: Kidney exchange benefits boy, 5, and woman
Larissa MacFarquhar: Paying for Kidneys
Megan McArdle: Department of Bizarre Arguments
"Exploitation" of the Poor is a Poor Reason to Ban Organ Markets from the Volokh Conspiracy
Milford men take part in four-way kidney swap (when we helped start NEPKE, only pairwise exchanges were initially feasible, but NEPKE became a pioneer in including 3- and 4-way exchanges in its optimization algorithm...)
Britain's only saviour sibling twins: At the age of two, little do they know it but Amy and Anthony Maguire are Britain's only 'saviour sibling' twins, created to be donors for their sick older brother.
Bone marrow donation requires a perfect match.
"The twins were born after IVF treatment was used to select embryos which are a match for their brother Connor so that blood taken from their umbilical cord at birth may one day be used to offer him life-saving treatment."
Organ donation to get halachic approval
A uniquely Israeli obstacle to organ donation wends its way towards resolution:
"Chief Rabbinate tries to encourage religious public to become organ donors by resolving halachic quandaries surrounding process, issuing special donor card "
Public call for organ donations (China Daily), and
China Announces Voluntary Organ Donor System (NY Times)
CD: "China launched a national organ donation system yesterday in a bid to gradually shake off its long-time dependence on executed prisoners as a major source of organs for transplants and as part of efforts to crack down on organ trafficking."...
"Currently about one million people in China need organ transplants each year while only 1 percent receive one, official statistics show.
Only about 130 people on the mainland have signed up to donate their organs since 2003, according to research on the promotion of organ donation after death by professor Chen Zhonghua with the Institute of Organ Transplantation of Tongji Hospital."...
"China issued an organ transplant law in 2007 that bans organ trafficking and only allows donations from living people to blood relatives and spouses, plus someone considered "emotionally connected."
However, organ middlemen have been faking documents in order to make a person who is desperately in need of money be considered "emotionally connected" to the recipients, reports said.
Living transplants increased to 40 percent of total transplants from 15 percent in 2006, Chen Zhonghua said.
"That's one of the daunting tasks facing us as we try to end the organ trade by establishing this system," Huang noted.
Other goals include preventing organ tourism, improving transplant quality, better defining donors' rights and satisfying patients' needs for transplants in an ethical manner."
NYT: "At least one million people in China need organ transplants each year, but only about 10,000 receive them, according to government statistics. Dr. Huang said that most of those organs — as high as 65 percent, by some estimates — are taken from death row inmates after their executions."...
"The practice of harvesting organs from executed Chinese convicts has been widely reported in the past, although it was only confirmed in 2005, by Dr. Huang, at a medical conference in Manila. The government has routinely denied other allegations that prisoners’ organs regularly found their way to the black market, often for sale to wealthy foreigners, and that executions were sometimes scheduled to coincide with the need for a specific organ.
At a news conference in Shanghai held Wednesday to unveil the new organ-donation system, one transplant surgeon was quoted by the newspaper as saying that the taking of organs from convicts was sometimes subject to corruption. "
Should We Legalize the Market for Human Organs? An NPR debate among Sally Satel, Amy Friedman, and Lloyd Cohen (arguing for), and James Childress, Frank Delmonico, and David Rothman (arguing against).
Lingering myths discourage organ donation from American Medical News:
"Only 38% of licensed drivers have joined their states' organ donor registries, with many deterred by long-held misconceptions about how the transplant system works, according to poll results released in April."
Organ donations decline with economy from the Miami Herald.
The numbers of organ donors is down, and experts say one reason may be the recession. But "Because of legislative action, Floridians starting in July will be able to register online to be an organ donor at donatelifeflorida.org ."
In the Kidney Trade: Seller Beware
"Need a kidney? You may be able to buy one in Pakistan, which has become one of the world’s largest “kidney bazaars,” according to an article published in the May-June issue of The Hastings Center Report, a bioethics journal.
But who sells their kidneys, and what becomes of these people afterwards? The article, by two doctors and a psychologist from Karachi, paints an ugly picture of the kidney business and challenges the argument made by some that selling organs is a great financial boon to the poor and that they are grateful for the chance to do it. "
A Better Way to Get a Kidney Daniel Rose in a NY Times OpEd proposes we shift to "opt out" for deceased donors.
National Paired Donation Network (Steve Woodle) does an exchange in Pittsburgh: Kidney exchange benefits boy, 5, and woman
Larissa MacFarquhar: Paying for Kidneys
Megan McArdle: Department of Bizarre Arguments
"Exploitation" of the Poor is a Poor Reason to Ban Organ Markets from the Volokh Conspiracy
Milford men take part in four-way kidney swap (when we helped start NEPKE, only pairwise exchanges were initially feasible, but NEPKE became a pioneer in including 3- and 4-way exchanges in its optimization algorithm...)
Britain's only saviour sibling twins: At the age of two, little do they know it but Amy and Anthony Maguire are Britain's only 'saviour sibling' twins, created to be donors for their sick older brother.
Bone marrow donation requires a perfect match.
"The twins were born after IVF treatment was used to select embryos which are a match for their brother Connor so that blood taken from their umbilical cord at birth may one day be used to offer him life-saving treatment."
Organ donation to get halachic approval
A uniquely Israeli obstacle to organ donation wends its way towards resolution:
"Chief Rabbinate tries to encourage religious public to become organ donors by resolving halachic quandaries surrounding process, issuing special donor card "
Public call for organ donations (China Daily), and
China Announces Voluntary Organ Donor System (NY Times)
CD: "China launched a national organ donation system yesterday in a bid to gradually shake off its long-time dependence on executed prisoners as a major source of organs for transplants and as part of efforts to crack down on organ trafficking."...
"Currently about one million people in China need organ transplants each year while only 1 percent receive one, official statistics show.
Only about 130 people on the mainland have signed up to donate their organs since 2003, according to research on the promotion of organ donation after death by professor Chen Zhonghua with the Institute of Organ Transplantation of Tongji Hospital."...
"China issued an organ transplant law in 2007 that bans organ trafficking and only allows donations from living people to blood relatives and spouses, plus someone considered "emotionally connected."
However, organ middlemen have been faking documents in order to make a person who is desperately in need of money be considered "emotionally connected" to the recipients, reports said.
Living transplants increased to 40 percent of total transplants from 15 percent in 2006, Chen Zhonghua said.
"That's one of the daunting tasks facing us as we try to end the organ trade by establishing this system," Huang noted.
Other goals include preventing organ tourism, improving transplant quality, better defining donors' rights and satisfying patients' needs for transplants in an ethical manner."
NYT: "At least one million people in China need organ transplants each year, but only about 10,000 receive them, according to government statistics. Dr. Huang said that most of those organs — as high as 65 percent, by some estimates — are taken from death row inmates after their executions."...
"The practice of harvesting organs from executed Chinese convicts has been widely reported in the past, although it was only confirmed in 2005, by Dr. Huang, at a medical conference in Manila. The government has routinely denied other allegations that prisoners’ organs regularly found their way to the black market, often for sale to wealthy foreigners, and that executions were sometimes scheduled to coincide with the need for a specific organ.
At a news conference in Shanghai held Wednesday to unveil the new organ-donation system, one transplant surgeon was quoted by the newspaper as saying that the taking of organs from convicts was sometimes subject to corruption. "
Saturday, August 29, 2009
Made in the USA, but also sold in Canada
We're advised to "think locally and act globally," and the product labels on my new shoes illustrate some of the tension between those mandates.
This label strikes a balance between the wish to be local (and sell to those Americans who prefer to "buy American"), and the wish to be global (and to sell in Canada, where the labelling laws require two languages). And the issue isn't that Canadians are (North) Americans too:
So, I'm happy to show my Solidaire des Travailleurs Americains, whose products, Fabrique aux Etats-Unis, compete in the fairly free global marketplace.
This label strikes a balance between the wish to be local (and sell to those Americans who prefer to "buy American"), and the wish to be global (and to sell in Canada, where the labelling laws require two languages). And the issue isn't that Canadians are (North) Americans too:
Friday, August 28, 2009
Further unraveling of pool chair reservations
Germans can now grab poolside chairs even earlier
"The German arm of Thomas Cook, Europe's second largest travel company, has been deluged with inquiries since announcing that holidaymakers at nine hotels in Turkey, Egypt and the Canary Islands can book recliners in advance for a fee.
Germans are famous around Europe for rising early to reserve recliners near the pool with their towels, and then going back to bed or eating a lengthy breakfast.
This often annoys tourists from other nations, but they will be unable to take advantage of the new service -- it is valid only for tourists booking their trips from Germany, Mathias Brandes, head of communications at Thomas Cook in Germany, said."
HT: Scott Kominers
"The German arm of Thomas Cook, Europe's second largest travel company, has been deluged with inquiries since announcing that holidaymakers at nine hotels in Turkey, Egypt and the Canary Islands can book recliners in advance for a fee.
Germans are famous around Europe for rising early to reserve recliners near the pool with their towels, and then going back to bed or eating a lengthy breakfast.
This often annoys tourists from other nations, but they will be unable to take advantage of the new service -- it is valid only for tourists booking their trips from Germany, Mathias Brandes, head of communications at Thomas Cook in Germany, said."
HT: Scott Kominers
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