There was a time when knife sharpeners brought their grindstones to the meat packers and butchers who were their main customers, and sharpened customers' knives on customers' premises. Now, the NY Times reports, the model is to rent a double set of knives to customers (who now include restaurants), so that the knife sharpener can come in and exchange all the dull knives for sharp ones, and sharpen the knives on his own premises: Venerable Craft, Modern Practitioner.
Apparently this business is one with ethnic, networked roots:
"Mr. Ambrosi’s grandfather, who came to the United States in the 1920s, hailed from the poor village of Carisolo. The village, with two neighboring towns of Pinzolo and Giustino, produced many of the more than 100 commercial knife sharpeners at work today in North America, sharpeners said. "
...
"At first the immigrants came mainly to New York, but soon their offspring scattered to stake out new routes, a dozen sharpeners across the country said in interviews. Ambrosis with grindstones do business in Connecticut, New Jersey and Ohio, as well as boroughs of New York. The Binellis set up knife-sharpening businesses in Detroit, Chicago and Medford, Mass.; the Maganzinis ended up in and around Boston. The Povinellis set up shop in Buffalo and ventured to North and South Carolina and Arizona; offshoots of the Nella family went to Toronto and Vancouver, as well as Long Island, Seattle and West Jordan, Utah.
"Robert Ambrosi’s grandfather traveled the Bronx in a horse-drawn cart with a grindstone powered by a foot pedal, serving, like the other knife sharpeners, mainly butchers and meatpackers.
"Mr. Ambrosi’s father used a grindstone fueled by a battery carried in a truck. The battery had to be plugged in each night in the garage to recharge. Then in the 1950s came the great innovation — double sets of knives — that eventually freed the Ambrosis to set up their first shop."
...
"Some of the northern Italian knife sharpeners still function in the old style, as members of the New York Grinders Association. The rules used to be simple: Don’t mess with someone’s turf. Stick to your own route — the one you inherited from your father or grandfather. Avoid the vendettas that have overtaken sharpeners in other cities.
“People will trade stops,” said Rinaldo Beltrami, the association’s president.
"Mr. Ambrosi, who let his membership in the association lapse, said, “I was brought up in that way of thinking.” Yet he will still sometimes appease a competitor by saying, “Let’s sit down, we’ll have a meeting, we’ll make a borderline — I won’t bother you.”
"Yet his sons have been knocking on doors to establish new routes, and Mr. Ambrosi has developed a Web site and a mail-order service, because his sons need enough business to sustain their future families, too. "
Saturday, October 2, 2010
Friday, October 1, 2010
Unraveling and diversity in the market for law clerks
One question about unravelling of markets--in which hiring becomes earlier, more diffuse in time, and characterized by very short duration "exploding" offers, is whether it reduces diversity. The idea is that if you have to hire people far in advance, e.g. when they are still in kindergarten, then you can't tell as much as you would like about individuals, so you had better be hiring from good kindergartens.
I'm reminded of this for two reasons. The first is a recent article on clerks in the Supreme Court:
"There are about 160 active federal appeals court judges and more than 100 more semiretired ones, yet more than half of the clerks who have served on the Roberts court came from the chambers of just 10 judges. Three judges accounted for a fifth of all Supreme Court clerks."
That from Adam Liptak in the NY Times: A Sign of the Court’s Polarization: Choice of Clerks
The second is this graph showing which law schools clerks have been coming from:
That is from a blog post from Dave Hoffman at Concurring Opinions, called The Quickly Unraveling Clerkship Market.
He writes that this year there is even more unraveling than usual, i.e. the plan for regulating the hiring of law clerks may be on its last legs, as the increasing levels of cheating we observed in previous years has apparently continued to increase.
(see 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. )
I'm reminded of this for two reasons. The first is a recent article on clerks in the Supreme Court:
"There are about 160 active federal appeals court judges and more than 100 more semiretired ones, yet more than half of the clerks who have served on the Roberts court came from the chambers of just 10 judges. Three judges accounted for a fifth of all Supreme Court clerks."
That from Adam Liptak in the NY Times: A Sign of the Court’s Polarization: Choice of Clerks
The second is this graph showing which law schools clerks have been coming from:
He writes that this year there is even more unraveling than usual, i.e. the plan for regulating the hiring of law clerks may be on its last legs, as the increasing levels of cheating we observed in previous years has apparently continued to increase.
(see 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. )
Thursday, September 30, 2010
Early decision in selective colleges
Steve Cohen at Forbes tabulates some admissions figures in his blog post: Early Decision: College Admission’s Secret Handshake
College Percentage of Class Filled by Early Acceptances
Brown 38%
Columbia 59%
Cornell 37%
Dartmouth 42%
Penn 50%
Williams 41%
Colgate 43%
Kenyon 38%
Lafayette 43%
Rice 27%
College Percentage of Class Filled by Early Acceptances
Brown 38%
Columbia 59%
Cornell 37%
Dartmouth 42%
Penn 50%
Williams 41%
Colgate 43%
Kenyon 38%
Lafayette 43%
Rice 27%
Update on that Medicare Auction
Peter Cramton writes to update us on the progress of the letter he organized about A poorly designed Medicare auction .
"I want to thank you again for being a signatory on the letter to Chairman Stark expressing our concerns with the flawed Medicare Competitive Bidding Program. I sent the letter linked below to Chairman Stark late on Sunday night. He responded within two days with a letter to the head of Medicare concluding, “I urge you to give these comments and recommendations serious consideration. I would also request that you inform me in a timely way as to whether CMS plans to incorporate any of the recommended changes and if not, why not.” The full letter is linked below.
"I want to thank you again for being a signatory on the letter to Chairman Stark expressing our concerns with the flawed Medicare Competitive Bidding Program. I sent the letter linked below to Chairman Stark late on Sunday night. He responded within two days with a letter to the head of Medicare concluding, “I urge you to give these comments and recommendations serious consideration. I would also request that you inform me in a timely way as to whether CMS plans to incorporate any of the recommended changes and if not, why not.” The full letter is linked below.
"Letter from 167 Concerned Auction Experts on Medicare Competitive Bidding Program" to Chairman Stark, Health Subcommittee, Ways and Means, U.S. House of Representatives, 26 September 2010. [Letter from Chairman Stark to CMS]
Yesterday, the deputy head of CMS, who is in charge of the competitive bidding program, contacted me to request a meeting to discuss the issues. We have not met yet, but I am optimistic that something good will come from this. Please be patient. Washington has now effectively shut down until after the elections. This will be a slow burner, but thanks to all of you the chance of a sensible outcome is positive. One could not say that a week ago.
A thousand thanks!
Best,
Peter
PS You may find the [Excerpts from replies] of interest. The excerpts are anonymous. Finally, here is a Freakonomics Blog with Ian Ayres that appeared today in the Opinion Pages of the New York Times.
Professor Peter Cramton
Economics, Tydings Hall
University of Maryland
College Park MD 20742-7211
Update: Peter and Brett E. Katzman have a followup column in The Economists' Voice (Oct. 2010): Reducing Healthcare Costs Requires Good Market Design
Update: Peter and Brett E. Katzman have a followup column in The Economists' Voice (Oct. 2010): Reducing Healthcare Costs Requires Good Market Design
Junior tennis players: turn pro or go to college?
Agents Bet on Future at the Juniors Tournament
"“Juniors are the lifeblood of the business,” said Norman Canter, an agent and owner of Renaissance Tennis Management. “Most people out here are looking for the kids born in 1995 who have demonstrated some talent and have some growing and maturing to do. But don’t kid yourself, it’s a total crapshoot.”
"What are the odds of unearthing the next Andre Agassi, or even an Andy Roddick?
"Not too long ago, McKinley said, Babolat examined the top 100 players from the International Tennis Federation’s boys’ and girls’ junior rankings over a stretch of several years. Then it tracked those players as they tried to crack the top 100 in the men’s and women’s professional tours.
"The results? About 7 percent of the world’s best juniors were able to make the transition to a top 100 men’s or women’s player. Barely 1 percent reached the top 10. Gael Monfils, for example, was the International Tennis Federation junior world champion in 2004 and reached as high as No. 9 in the A.T.P. world rankings in 2009. He was ranked 19th before losing Wednesday in the quarterfinals to Novak Djokovic.
“They are pretty discouraging numbers,” conceded McKinley, who covers America and Australia for Babolat, which earned more than $150 million in revenues in 2009. “But we’ve built our business at the grass-roots level by identifying up-and-coming juniors and making sure they are playing with our rackets and strings. They may not make it to Nadal’s level, but in their hometowns everyone knows who they are and what they are using. That is a lot of exposure and sales for us.”
"The agents, too, know it is a numbers game, and follow an adage: Sign 100 of them, and start picking up the phone when one or two start to win.
"After all, in 1998, Federer was the I.T.F. junior champion. Twelve years later, 20 percent of the $25 million in endorsements he earns as the world’s most decorated tennis player is substantial money.
"There is mounting evidence that older is better in professional tennis — the average age of the women occupying the first 10 spots in the world rankings is 26, a year older than that of the top 10 men. Patrick McEnroe, the general manager for the United States Tennis Association’s player development program, has been blunt in his assessment of what the search for teenage phenoms has done to weaken American tennis.
“The bottom line is, we lost a generation of players the last 10 years that should have gone to college but didn’t,” he said.
"Still, the juniors tournament at the United States Open remains a bustling marketplace as manufacturers and agents double down on the next-not-so-sure-thing. Lagardère made the biggest noise recently by signing Monica Puig, a 16-year-old who lives in Miami. She is ranked fourth in the I.T.F. junior rankings and won her first professional tournament in April in Spain.
"Turning pro hardly means instant riches. In addition to free equipment and clothing, companies like Babolat and Nike will offer performance bonuses for tournament victories and rankings. Winning a $10,000 Futures tournament — the fledgling pro’s starter circuit — might bring a $1,000 bonus. Rising to the top 100 tour rankings can be worth $25,000 from sponsors.
"The out-of-pocket expenses, however, are substantial; players train and practice five hours a day for 41 weeks, receive high-performance coaching and travel, and compete in 24 tournaments.
“It’s about $100,000 or $150,000 just to start a boy or girl down the professional path,” Canter said.
"The hard reality and cold cash it takes to chase a dream rarely discourages young players who have been given free equipment and courted by agents since the time they could hold a racket.
The American Ryan Harrison, 18, for example, who advanced to the second round of the main draw, said he was first approached by an agent as a 12-year-old and turned professional three years later.
"Sock, 17, the promising American, plays with Babolat rackets, wears Nike clothes and plays a mix of junior and pro tournaments, but he has yet to accept bonuses or prize money to preserve his N.C.A.A. eligibility. His father, Larry Sock, wanted his son to go to regular school and keep some semblance of a normal family life intact. ... The Socks have not decided if Jack will turn professional or go to college, perhaps at Nebraska, where his brother Eric plays for the Cornhuskers.
“They can be very persuasive,” Larry Sock said of agents. “But college sounds pretty good to me.”
"European players do not have college eligibility to protect and are often the center of the agent frenzy. But their odds of success are hardly any better. For every Maria Sharapova, there are perhaps dozens like Lera Solovieva.
"Solovieva, a Russian, was 11 and one of the most sought-after juniors in the world when Canter signed her. He got her deals with blue-chip sponsors like Nike, paid for her to live and train in Miami, and cared and outfitted her down to a set of braces. Nearly four years and $650,000 of Renaissance Tennis Management’s money later, Solovieva is back in Russia, trying to revive a career thwarted by injuries and a lack of development."
"“Juniors are the lifeblood of the business,” said Norman Canter, an agent and owner of Renaissance Tennis Management. “Most people out here are looking for the kids born in 1995 who have demonstrated some talent and have some growing and maturing to do. But don’t kid yourself, it’s a total crapshoot.”
"What are the odds of unearthing the next Andre Agassi, or even an Andy Roddick?
"Not too long ago, McKinley said, Babolat examined the top 100 players from the International Tennis Federation’s boys’ and girls’ junior rankings over a stretch of several years. Then it tracked those players as they tried to crack the top 100 in the men’s and women’s professional tours.
"The results? About 7 percent of the world’s best juniors were able to make the transition to a top 100 men’s or women’s player. Barely 1 percent reached the top 10. Gael Monfils, for example, was the International Tennis Federation junior world champion in 2004 and reached as high as No. 9 in the A.T.P. world rankings in 2009. He was ranked 19th before losing Wednesday in the quarterfinals to Novak Djokovic.
“They are pretty discouraging numbers,” conceded McKinley, who covers America and Australia for Babolat, which earned more than $150 million in revenues in 2009. “But we’ve built our business at the grass-roots level by identifying up-and-coming juniors and making sure they are playing with our rackets and strings. They may not make it to Nadal’s level, but in their hometowns everyone knows who they are and what they are using. That is a lot of exposure and sales for us.”
"The agents, too, know it is a numbers game, and follow an adage: Sign 100 of them, and start picking up the phone when one or two start to win.
"After all, in 1998, Federer was the I.T.F. junior champion. Twelve years later, 20 percent of the $25 million in endorsements he earns as the world’s most decorated tennis player is substantial money.
"There is mounting evidence that older is better in professional tennis — the average age of the women occupying the first 10 spots in the world rankings is 26, a year older than that of the top 10 men. Patrick McEnroe, the general manager for the United States Tennis Association’s player development program, has been blunt in his assessment of what the search for teenage phenoms has done to weaken American tennis.
“The bottom line is, we lost a generation of players the last 10 years that should have gone to college but didn’t,” he said.
"Still, the juniors tournament at the United States Open remains a bustling marketplace as manufacturers and agents double down on the next-not-so-sure-thing. Lagardère made the biggest noise recently by signing Monica Puig, a 16-year-old who lives in Miami. She is ranked fourth in the I.T.F. junior rankings and won her first professional tournament in April in Spain.
"Turning pro hardly means instant riches. In addition to free equipment and clothing, companies like Babolat and Nike will offer performance bonuses for tournament victories and rankings. Winning a $10,000 Futures tournament — the fledgling pro’s starter circuit — might bring a $1,000 bonus. Rising to the top 100 tour rankings can be worth $25,000 from sponsors.
"The out-of-pocket expenses, however, are substantial; players train and practice five hours a day for 41 weeks, receive high-performance coaching and travel, and compete in 24 tournaments.
“It’s about $100,000 or $150,000 just to start a boy or girl down the professional path,” Canter said.
"The hard reality and cold cash it takes to chase a dream rarely discourages young players who have been given free equipment and courted by agents since the time they could hold a racket.
The American Ryan Harrison, 18, for example, who advanced to the second round of the main draw, said he was first approached by an agent as a 12-year-old and turned professional three years later.
"Sock, 17, the promising American, plays with Babolat rackets, wears Nike clothes and plays a mix of junior and pro tournaments, but he has yet to accept bonuses or prize money to preserve his N.C.A.A. eligibility. His father, Larry Sock, wanted his son to go to regular school and keep some semblance of a normal family life intact. ... The Socks have not decided if Jack will turn professional or go to college, perhaps at Nebraska, where his brother Eric plays for the Cornhuskers.
“They can be very persuasive,” Larry Sock said of agents. “But college sounds pretty good to me.”
"European players do not have college eligibility to protect and are often the center of the agent frenzy. But their odds of success are hardly any better. For every Maria Sharapova, there are perhaps dozens like Lera Solovieva.
"Solovieva, a Russian, was 11 and one of the most sought-after juniors in the world when Canter signed her. He got her deals with blue-chip sponsors like Nike, paid for her to live and train in Miami, and cared and outfitted her down to a set of braces. Nearly four years and $650,000 of Renaissance Tennis Management’s money later, Solovieva is back in Russia, trying to revive a career thwarted by injuries and a lack of development."
Wednesday, September 29, 2010
Kindergarten applications in Manhattan
A Frenzied First Day for Applying to Private Kindergartens
"As the new school year begins, another annual rite of Manhattan education commences: the crush of applicants to private nursery schools and kindergartens, many of which make applications for the following school year available the day after Labor Day.
"So parents swamped the schools’ Web sites and phone lines on Tuesday, reloading and redialing until they got through, and in some cases even turning in the paperwork before noon.
...
"At the 92nd Street Y and Epiphany Community nursery schools on the Upper East Side, just getting an application was a race against time. At Epiphany, applications became available online at 8 a.m. for about 30 slots next year. By 9 a.m., parents were being put on the waiting list — to get an application — and roughly 350 applications had been downloaded.
"Early birds had a big payoff: all who complete Epiphany’s application process are guaranteed an interview, said Wendy Levey, the director of the school. “I will interview parents all night if I need to,” she said.
"At the Y, candidates must call to set up a tour to be eligible for an application. The telephone lines opened early Tuesday, and by midmorning the tours were booked for 2- and 3-year-olds."
"As the new school year begins, another annual rite of Manhattan education commences: the crush of applicants to private nursery schools and kindergartens, many of which make applications for the following school year available the day after Labor Day.
"So parents swamped the schools’ Web sites and phone lines on Tuesday, reloading and redialing until they got through, and in some cases even turning in the paperwork before noon.
...
"At the 92nd Street Y and Epiphany Community nursery schools on the Upper East Side, just getting an application was a race against time. At Epiphany, applications became available online at 8 a.m. for about 30 slots next year. By 9 a.m., parents were being put on the waiting list — to get an application — and roughly 350 applications had been downloaded.
"Early birds had a big payoff: all who complete Epiphany’s application process are guaranteed an interview, said Wendy Levey, the director of the school. “I will interview parents all night if I need to,” she said.
"At the Y, candidates must call to set up a tour to be eligible for an application. The telephone lines opened early Tuesday, and by midmorning the tours were booked for 2- and 3-year-olds."
Tuesday, September 28, 2010
Proposal for porn education in Switzerland
Bettina Klaus writes about a form of sex education that might not catch on everywhere (or even anywhere):
"The "Jeunes Socialistes" ("Schweizer Jungsozialistinnen und -sozialisten" in the German translation) - a political party in CH - propose to add a module concerning porn to the schools' sex education curriculum (the idea being that kids have free access to porn in the internet anyway and thus it might be better to learn more about it in a controlled environment).
"The "Jeunes Socialistes" ("Schweizer Jungsozialistinnen und -sozialisten" in the German translation) - a political party in CH - propose to add a module concerning porn to the schools' sex education curriculum (the idea being that kids have free access to porn in the internet anyway and thus it might be better to learn more about it in a controlled environment).
Here are links to the French and to the German online articles:
Du porno pour éduquer les écoliers?
and
Schüler brauchen Erfahrung mit Pornos
Monday, September 27, 2010
Thoughts on kidney exchange in a steady state
As kidney exchange grows, a growing number of people are thinking about how it might be organized. We can welcome to the club Larry Ausubel and Thayer Morrill, two economists with varied interests in market design, whose paper Sequential Kidney Exchange explores how non-simultaneous chains might look in a steady state world, in which the composition of the pool of patient-donor pairs would be completely stable over time. Under that assumption, an exchange that could be conducted simultaneously today, could also be conducted over multiple days, in which a pair would first donate a kidney, and then receive one from another pair (just like the one that was available today) tomorrow.
"Abstract: The literature on kidney exchange considers situations where two or more patients needing transplants have live donors volunteering to donate one of their kidneys, but the donated organs are incompatible with the respective patients. The traditional analysis assumes that all components of the live donor exchange must occur simultaneously. People cannot write enforceable contracts that commit them to donate their organs; consequently, incentive compatibility is obtained by trading simultaneously. Unfortunately, a two-way exchange then requires the simultaneous availability of four operating rooms and associated personnel, while a three-way exchange requires six operating rooms, etc. The requirement of four or more operating rooms for concurrent surgeries may pose a significant constraint on the beneficial exchanges that may be attained. The basic insight of this paper is that satisfaction of the incentive constraint does not require simultaneous exchange; rather, it requires that organ donation occurs no later than the associated organ receipt. Using sequential exchanges may relax the operating-room constraint and thereby increase the number of beneficial exchanges. We show that most benefits of sequential exchange can be accomplished with only two concurrent operating rooms."
Note that Ausubel and Morrill propose to solve the incentive problem by having each patient-donor pair donate a kidney before (or at least no later than) they receive one, so reneging is not an issue. This is very different than current practice in non-simultaneous chains, which is to insure the individual rationality of the outcome by having each pair receive a kidney before donating one. This latter approach means that non-simultaneous chains can only happen when initiated by a non-directed donor (a severe limitation). In the model Ausubel and Morrill explore, the danger that some pair won't receive a kidney after giving one vanishes because, in the steady state, a pair of the right kind will always be available.
Kidney exchange is a field in which ideas that aren't ready for implementation when published sometimes find an echo in practice pretty fast. (It wasn't long ago that only exchanges between two pairs were being done. But integrating chains with exchanges which had been proposed earlier, happened pretty fast thereafter.) I already know of some non-simultaneous chains in which a pair has donated a kidney before receiving one, for logistical reasons, after the full chain has already been identified. Those chains always make me feel a little nervous, but maybe they will become more common as the risks and rewards become better understood.
"Abstract: The literature on kidney exchange considers situations where two or more patients needing transplants have live donors volunteering to donate one of their kidneys, but the donated organs are incompatible with the respective patients. The traditional analysis assumes that all components of the live donor exchange must occur simultaneously. People cannot write enforceable contracts that commit them to donate their organs; consequently, incentive compatibility is obtained by trading simultaneously. Unfortunately, a two-way exchange then requires the simultaneous availability of four operating rooms and associated personnel, while a three-way exchange requires six operating rooms, etc. The requirement of four or more operating rooms for concurrent surgeries may pose a significant constraint on the beneficial exchanges that may be attained. The basic insight of this paper is that satisfaction of the incentive constraint does not require simultaneous exchange; rather, it requires that organ donation occurs no later than the associated organ receipt. Using sequential exchanges may relax the operating-room constraint and thereby increase the number of beneficial exchanges. We show that most benefits of sequential exchange can be accomplished with only two concurrent operating rooms."
Note that Ausubel and Morrill propose to solve the incentive problem by having each patient-donor pair donate a kidney before (or at least no later than) they receive one, so reneging is not an issue. This is very different than current practice in non-simultaneous chains, which is to insure the individual rationality of the outcome by having each pair receive a kidney before donating one. This latter approach means that non-simultaneous chains can only happen when initiated by a non-directed donor (a severe limitation). In the model Ausubel and Morrill explore, the danger that some pair won't receive a kidney after giving one vanishes because, in the steady state, a pair of the right kind will always be available.
Kidney exchange is a field in which ideas that aren't ready for implementation when published sometimes find an echo in practice pretty fast. (It wasn't long ago that only exchanges between two pairs were being done. But integrating chains with exchanges which had been proposed earlier, happened pretty fast thereafter.) I already know of some non-simultaneous chains in which a pair has donated a kidney before receiving one, for logistical reasons, after the full chain has already been identified. Those chains always make me feel a little nervous, but maybe they will become more common as the risks and rewards become better understood.
Sunday, September 26, 2010
Bernanke on economic engineering
Speech by Chairman Ben S. Bernanke, At the Conference Co-sponsored by the Center for Economic Policy Studies and the Bendheim Center for Finance, Princeton University, Princeton, New Jersey, September 24, 2010
Implications of the Financial Crisis for Economics.
"Although economists have much to learn from this crisis, as I will discuss, I think that calls for a radical reworking of the field go too far. In particular, it seems to me that current critiques of economics sometimes conflate three overlapping yet separate enterprises, which, for the purposes of my remarks today, I will call economic science, economic engineering, and economic management. Economic science concerns itself primarily with theoretical and empirical generalizations about the behavior of individuals, institutions, markets, and national economies. Most academic research falls in this category. Economic engineering is about the design and analysis of frameworks for achieving specific economic objectives. Examples of such frameworks are the risk-management systems of financial institutions and the financial regulatory systems of the United States and other countries. Economic management involves the operation of economic frameworks in real time--for example, in the private sector, the management of complex financial institutions or, in the public sector, the day-to-day supervision of those institutions. "
Just for fun, here's a link to
Roth, Alvin E., "The Economist as Engineer: Game Theory, Experimentation, and Computation as Tools for Design Economics," Fisher-Schultz Lecture, Econometrica, 70,4, July 2002, 1341-1378.
HT to Wirtschafts-Ingenieur Axel Ockenfels
Implications of the Financial Crisis for Economics.
"Although economists have much to learn from this crisis, as I will discuss, I think that calls for a radical reworking of the field go too far. In particular, it seems to me that current critiques of economics sometimes conflate three overlapping yet separate enterprises, which, for the purposes of my remarks today, I will call economic science, economic engineering, and economic management. Economic science concerns itself primarily with theoretical and empirical generalizations about the behavior of individuals, institutions, markets, and national economies. Most academic research falls in this category. Economic engineering is about the design and analysis of frameworks for achieving specific economic objectives. Examples of such frameworks are the risk-management systems of financial institutions and the financial regulatory systems of the United States and other countries. Economic management involves the operation of economic frameworks in real time--for example, in the private sector, the management of complex financial institutions or, in the public sector, the day-to-day supervision of those institutions. "
Just for fun, here's a link to
Roth, Alvin E., "The Economist as Engineer: Game Theory, Experimentation, and Computation as Tools for Design Economics," Fisher-Schultz Lecture, Econometrica, 70,4, July 2002, 1341-1378.
HT to Wirtschafts-Ingenieur Axel Ockenfels
Saturday, September 25, 2010
Organ markets, transplant tourism, and compensation of donors in Asia
The Australian ABC News carries a story about transplant tourism that seems to focus on China (but which I hope is a little dated): Australian organ tourists drive sinister trade
One of the disturbing (hearsay) quotes: ""I know of one patient who was heading for a country overseas; told the unit that they would be unable to come in for dialysis tomorrow because they were shooting her donor tomorrow."
The story quotes one Australian surgeon as suggesting that relying primarily on deceased donors would be preferable, since there is less room for an illegal market to creep in (maybe the reporter didn't read him the quote above). Australia, like everywhere else in the world, doesn't have enough deceased donor kidneys to meet demand, and live donor transplantation continues to outperform deceased donor transplantation (hence kidney exchange). Stories like this make me worry about babies being thrown out with bathwater...
A recent paper discusses the organ trade in Asia, and policies regarding legal compensation of donors: , Living Organ Transplantation Policy Transition in Asia: towards Adaptive Policy Changes by Alex He Jingwei, Allen Lai Yu-Hung, and Leong Ching, in Global Health Governance, Volume III, Issue 2: Spring 2010.
The authors are all Ph.D. candidates at the Lee Kuan Yew School of Public Policy, National University of Singapore.
"This paper surveys trends in ten Asian economies and highlights the gradual loosening of restrictions on donor eligibility and compensation. We suggest that one explanation for those cases which have remained unchanged in their transplantation policies is the existence of a thriving trans-boundary organ trade, which although
ethically indefensible, is tolerated by pragmatic policymakers."
...
"...Saudi Arabia has changed its policy. According to the World Health Organization (WHO), a law passed in Saudi Arabia in October 2007 envisages that the government pays a monetary “reward” of 50,000 riyals (US$13,300) and other benefits, including life-time medical care, for unrelated organ donors in a system regulated at the national level. The law’s supporters said it would stop Saudi citizens from travelling to China, Egypt, Pakistan, the Philippines, and other countries to receive organ transplants.30 The effect of this new policy is immediate—Saudi Arabia quadrupled its rates of living kidney donation within a short period, ranking no. 1 today.31
"Singapore has faced a persistent shortage of organs for donations too. As of October 31, 2008, there were about 520 people on the kidney transplant waiting list. The average waiting time is nine years. Religious customs, cultural norms, and a fear of transplant operations have been cited as reasons for the donor shortage. Given its small population, and level of affluence, it is perhaps natural that this country will eventually find some ways to regulate this de facto market. The most recent of these has been an amendment to the “Human Organ Transplant Act” (HOTA) to allow compensation to donors. At the same time, it has also increased the penalty for organ trading, signaling that a complete price mechanism is unacceptable.
"HOTA originally prohibits the giving or acceptance of organs under a “contract of arrangement” which precludes organ trading. In November 2008, the Ministry of Health (MOH) proposed that paired matching for exchange of organs be allowed in Singapore to increase the chances of improved transplant outcomes and to save more lives. Under this arrangement, patients can essentially switch donors. The MOH sees this as creating matches that may otherwise have not occurred, as well as others that are medically compatible for improved clinical outcomes.
"A more radical change is to allow compensation to be made to living donors in Singapore. At the time of writing, this amendment has already been passed in the parliament, and the MOH is working out compensation levels. Under the law, provision is made for direct costs incurred as a result of the donation, as well as indirect losses such as lost earnings and future expenses due to the donation. In order to control the financial incentive, all the reimbursements will be credited to the donors’ medical savings accounts instead of cash transfers."
HT: Joshua Gans and Sally Satel
One of the disturbing (hearsay) quotes: ""I know of one patient who was heading for a country overseas; told the unit that they would be unable to come in for dialysis tomorrow because they were shooting her donor tomorrow."
The story quotes one Australian surgeon as suggesting that relying primarily on deceased donors would be preferable, since there is less room for an illegal market to creep in (maybe the reporter didn't read him the quote above). Australia, like everywhere else in the world, doesn't have enough deceased donor kidneys to meet demand, and live donor transplantation continues to outperform deceased donor transplantation (hence kidney exchange). Stories like this make me worry about babies being thrown out with bathwater...
A recent paper discusses the organ trade in Asia, and policies regarding legal compensation of donors: , Living Organ Transplantation Policy Transition in Asia: towards Adaptive Policy Changes by Alex He Jingwei, Allen Lai Yu-Hung, and Leong Ching, in Global Health Governance, Volume III, Issue 2: Spring 2010.
The authors are all Ph.D. candidates at the Lee Kuan Yew School of Public Policy, National University of Singapore.
"This paper surveys trends in ten Asian economies and highlights the gradual loosening of restrictions on donor eligibility and compensation. We suggest that one explanation for those cases which have remained unchanged in their transplantation policies is the existence of a thriving trans-boundary organ trade, which although
ethically indefensible, is tolerated by pragmatic policymakers."
...
"...Saudi Arabia has changed its policy. According to the World Health Organization (WHO), a law passed in Saudi Arabia in October 2007 envisages that the government pays a monetary “reward” of 50,000 riyals (US$13,300) and other benefits, including life-time medical care, for unrelated organ donors in a system regulated at the national level. The law’s supporters said it would stop Saudi citizens from travelling to China, Egypt, Pakistan, the Philippines, and other countries to receive organ transplants.30 The effect of this new policy is immediate—Saudi Arabia quadrupled its rates of living kidney donation within a short period, ranking no. 1 today.31
"Singapore has faced a persistent shortage of organs for donations too. As of October 31, 2008, there were about 520 people on the kidney transplant waiting list. The average waiting time is nine years. Religious customs, cultural norms, and a fear of transplant operations have been cited as reasons for the donor shortage. Given its small population, and level of affluence, it is perhaps natural that this country will eventually find some ways to regulate this de facto market. The most recent of these has been an amendment to the “Human Organ Transplant Act” (HOTA) to allow compensation to donors. At the same time, it has also increased the penalty for organ trading, signaling that a complete price mechanism is unacceptable.
"HOTA originally prohibits the giving or acceptance of organs under a “contract of arrangement” which precludes organ trading. In November 2008, the Ministry of Health (MOH) proposed that paired matching for exchange of organs be allowed in Singapore to increase the chances of improved transplant outcomes and to save more lives. Under this arrangement, patients can essentially switch donors. The MOH sees this as creating matches that may otherwise have not occurred, as well as others that are medically compatible for improved clinical outcomes.
"A more radical change is to allow compensation to be made to living donors in Singapore. At the time of writing, this amendment has already been passed in the parliament, and the MOH is working out compensation levels. Under the law, provision is made for direct costs incurred as a result of the donation, as well as indirect losses such as lost earnings and future expenses due to the donation. In order to control the financial incentive, all the reimbursements will be credited to the donors’ medical savings accounts instead of cash transfers."
HT: Joshua Gans and Sally Satel
Friday, September 24, 2010
College admissions through the common ap, and supplements as signals
The Common Application makes it easy to apply to one more college. So colleges that use it get an increase in applications, some of which may not reflect much real interest. And so many colleges are adding supplements to the Common Ap, so that students will have to exert some effort to apply to them.
The Chronicle of Higher Ed writes of The Gravitational Pull of the Common Application (may need a subscription).
"Fall is here, and another harvest of college applications has begun. Over the next few months, hundreds of thousands of high-school seniors will apply to college through the popular portal known as the Common Application, a standardized form used by an ever-growing list of institutions.
"Now in its 35th year, the Common Application began as a small membership association of 15 private colleges. Today, more than 400 institutions use the form, which many admissions deans say has helped them recruit more first-generation and minority students. Recently, the nonprofit group welcomed its first two international members....
"Two years ago, the University of Chicago, long known for its distinctive Uncommon Application, joined the party after years of principled objections. This year, Columbia University hopped onboard, becoming the last member of the Ivy League to do so.
"In this era of hyper-competitive admissions, how can any college resist the Common Application’s gravitational pull?
"Recently, I put this question to Charles A. Deacon, dean of admissions at Georgetown University, among the most-prominent institutions that have not adopted the application (nobody should hold their breath waiting for that to change). Mr. Deacon describes the application as both an unnecessary tool and an unwelcome symbol of homogenization in admissions.
"The Common Application was created to promote equity in admissions by making it easier for students to apply to colleges that conduct “holistic” reviews of applicants. Mr. Deacon applauds that goal, but he says the standardized application prompts students to apply to colleges in which they have little or no interest. ...
"This year, Georgetown received about 18,000 applications for a freshman class of 1,580. Mr. Deacon suspects that adopting the Common Application would bring Georgetown 3,000 to 5,000 additional applicants in the first year or two. But he says the university doesn’t need that many—and that it already attracts plenty of diverse applicants through its traditional recruitment strategies.
...
"Mr. Deacon’s not the only critic of the Common Application. In some circles, the form has become a scapegoat for a variety of ills—frivolous applications, stressed-out students, overwhelmed admissions deans. At a conference for private high-school counselors I attended this summer, the consensus was that the Little Application That Could had become a big, big problem.
"Curiously, their objections differ. Some counselors say the form has made applying to college too easy, but others say that by requiring supplements, some participating colleges have made it too hard.
...
"...participating colleges embrace the Common Application in different ways. About two-thirds require applicants to complete supplements. The majority of those supplements, Mr. Killion says, are short, with one or two pages of questions. A few dozen have longer supplements, with additional essay questions (Chicago, for instance, still requires applicants to respond to its quirky prompts, like “Find X”).
"Mr. Killion notes that some institutions have had supplements from the Common Application’s inception. Where the concern is coming from, he says, “is really from people looking at a narrow band of very highly selective colleges with long supplements.”
...
"“We don’t exist to help colleges increase their applications, but it’s a side effect of what we do,” Mr. Killion says.
"Brown University saw a 21-percent jump in 2009, the year it switched to the Common Application. In 2008, it had a 7.7-percent increase. Chicago saw a 43-percent increase in applications this year, the second since it switched, but it had seen an increase of 20 percent just a few years ago. Columbia saw a 13-percent increase in 2009. What will it see during this cycle?
...
"At Georgetown, Mr. Deacon says joining the Common Application has become a keeping-up-with-the-Joneses phenomenon. He concedes that his opinion has been shaped, in part, by Georgetown’s enviable position in the marketplace. As a well-known institution with ample resources in the nation’s capital, it benefits from built-in demand. If the university’s applications dipped sharply, he admits, he would feel pressure to get more.
"That’s not likely to happen, despite Mr. Deacon’s relatively conservative approach to admissions. Each year, Georgetown begins its recruitment process by purchasing the names of PSAT test takers with equivalent scores of at least 650 on the critical reading section, 620 on the math section, and self-reported grade-point averages of A- or better. Last year, that was about 44,000 students, Mr. Deacon says. The university also buys another 5,000 to 6,000 names of underrepresented minority students with lower scores.
"Georgetown invites all those students to join its mailing list, and 12,000 to 13,000 of those students typically respond. The admissions staff supplements this search with a host of outreach, including travel to 140 cities and towns each year, and “pipeline” building in far-flung areas.
"Unlike most colleges, Georgetown strongly recommends that applicants submit scores from three SAT Subject Tests. The university also urges students to sit for interviews, and the vast majority of applicants do so. In other words, applying to Georgetown takes commitment."
The Chronicle of Higher Ed writes of The Gravitational Pull of the Common Application (may need a subscription).
"Fall is here, and another harvest of college applications has begun. Over the next few months, hundreds of thousands of high-school seniors will apply to college through the popular portal known as the Common Application, a standardized form used by an ever-growing list of institutions.
"Now in its 35th year, the Common Application began as a small membership association of 15 private colleges. Today, more than 400 institutions use the form, which many admissions deans say has helped them recruit more first-generation and minority students. Recently, the nonprofit group welcomed its first two international members....
"Two years ago, the University of Chicago, long known for its distinctive Uncommon Application, joined the party after years of principled objections. This year, Columbia University hopped onboard, becoming the last member of the Ivy League to do so.
"In this era of hyper-competitive admissions, how can any college resist the Common Application’s gravitational pull?
"Recently, I put this question to Charles A. Deacon, dean of admissions at Georgetown University, among the most-prominent institutions that have not adopted the application (nobody should hold their breath waiting for that to change). Mr. Deacon describes the application as both an unnecessary tool and an unwelcome symbol of homogenization in admissions.
"The Common Application was created to promote equity in admissions by making it easier for students to apply to colleges that conduct “holistic” reviews of applicants. Mr. Deacon applauds that goal, but he says the standardized application prompts students to apply to colleges in which they have little or no interest. ...
"This year, Georgetown received about 18,000 applications for a freshman class of 1,580. Mr. Deacon suspects that adopting the Common Application would bring Georgetown 3,000 to 5,000 additional applicants in the first year or two. But he says the university doesn’t need that many—and that it already attracts plenty of diverse applicants through its traditional recruitment strategies.
...
"Mr. Deacon’s not the only critic of the Common Application. In some circles, the form has become a scapegoat for a variety of ills—frivolous applications, stressed-out students, overwhelmed admissions deans. At a conference for private high-school counselors I attended this summer, the consensus was that the Little Application That Could had become a big, big problem.
"Curiously, their objections differ. Some counselors say the form has made applying to college too easy, but others say that by requiring supplements, some participating colleges have made it too hard.
...
"...participating colleges embrace the Common Application in different ways. About two-thirds require applicants to complete supplements. The majority of those supplements, Mr. Killion says, are short, with one or two pages of questions. A few dozen have longer supplements, with additional essay questions (Chicago, for instance, still requires applicants to respond to its quirky prompts, like “Find X”).
"Mr. Killion notes that some institutions have had supplements from the Common Application’s inception. Where the concern is coming from, he says, “is really from people looking at a narrow band of very highly selective colleges with long supplements.”
...
"“We don’t exist to help colleges increase their applications, but it’s a side effect of what we do,” Mr. Killion says.
"Brown University saw a 21-percent jump in 2009, the year it switched to the Common Application. In 2008, it had a 7.7-percent increase. Chicago saw a 43-percent increase in applications this year, the second since it switched, but it had seen an increase of 20 percent just a few years ago. Columbia saw a 13-percent increase in 2009. What will it see during this cycle?
...
"At Georgetown, Mr. Deacon says joining the Common Application has become a keeping-up-with-the-Joneses phenomenon. He concedes that his opinion has been shaped, in part, by Georgetown’s enviable position in the marketplace. As a well-known institution with ample resources in the nation’s capital, it benefits from built-in demand. If the university’s applications dipped sharply, he admits, he would feel pressure to get more.
"That’s not likely to happen, despite Mr. Deacon’s relatively conservative approach to admissions. Each year, Georgetown begins its recruitment process by purchasing the names of PSAT test takers with equivalent scores of at least 650 on the critical reading section, 620 on the math section, and self-reported grade-point averages of A- or better. Last year, that was about 44,000 students, Mr. Deacon says. The university also buys another 5,000 to 6,000 names of underrepresented minority students with lower scores.
"Georgetown invites all those students to join its mailing list, and 12,000 to 13,000 of those students typically respond. The admissions staff supplements this search with a host of outreach, including travel to 140 cities and towns each year, and “pipeline” building in far-flung areas.
"Unlike most colleges, Georgetown strongly recommends that applicants submit scores from three SAT Subject Tests. The university also urges students to sit for interviews, and the vast majority of applicants do so. In other words, applying to Georgetown takes commitment."
Thursday, September 23, 2010
San Francisco school choice goes in-house
Those of you who have been following school choice developments here know that, for the past year, Atila Abdulkadiroglu, Clayton Featherstone, Muriel Niederle, Parag Pathak and I have been helping the San Francisco Unified School District design a new school choice system, which was adopted by the SF School Board last March.
The original plan was that we would continue to offer our services free of charge to implement the software, and then help monitor the effects of the new choice system.
Last week we heard from SFUSD staff that, because of concerns about sharing confidential data for monitoring the effects of the new system, they have decided to do further development in-house, and so will develop software to implement the new design on their own.
The SFUSD staff have been left with a sufficiently detailed description of the "assignment with transfers" design the Board approved to move ahead with it if they wish. But it will take a good deal of care in implementing the new algorithm in software if its desirable properties--strategic simplicity and non wastefulness--are to be realized. (Both of these features were lacking in the old SFUSD assignment system, the one to be replaced.)
Below are links to some of the key developments before last week.
Here is a post with a link to the video of Muriel Niederle presenting the new design that the Board ultimately voted to adopt: SF School Board Meeting, Feb 17: new choice system.
And here is a link to the slides she presented, giving a description (with examples) of the new choice algorithm: Assignment in the SFUSD, and discussions of the features that make it strategically simple, non wasteful, and flexible.
In March 2010 the San Francisco Board of Education unanimously approved the new system. In their March 2010 press release (now here), the SFUSD reported (emphasis added):
"The choice algorithm was designed with the help of a volunteer team of market design experts who have previously been involved in designing choice algorithms for school choice in Boston and New York City. Volunteers from four prominent universities contributed to the effort, including Clayton Featherstone and Muriel Niederle of Stanford University, Atila Abdulkadiroglu of Duke University, Parag Pathak of MIT, and Alvin Roth of Harvard.
“We are pleased that the district has decided to adopt a choice architecture that makes it safe for parents to concentrate their effort on determining which schools they prefer, with confidence that they won’t hurt their chances by listing their preferences truthfully,” said Niederle and Featherstone, the Stanford research team."
A very simple description of the basic assignment with transfer algorithm is given on page 370 of this paper (where it is called "top trading cycles"). Much of the SFUSD school Board debate has focused on what priorities to implement. What is described on page 370 is a simple version of the underlying choice engine into which the priorities go (with a somewhat different description than in Muriel's slides). The priorities can depend on any characteristics of the students (e.g. previous schools, or siblings, or home zip code) or of the school (e.g. neighborhood or historical student composition). But to keep the process strategically simple--to make it safe for families to rank schools according to their true preferences--the priority of a student at a school cannot depend on how that student ranked that school. (If you happen to be the programmer asked to implement this, drop me a line if you run into trouble:)
Some related developments can be followed on the blog of SF Board of Education member Rachel Norton, including this September 15 post on delay in the implementation of the middle school assignment plan: Recap: Assignment committee recommends delay
General background on the theory and practice of designing school choice algorithms can be found here, and my earlier posts on San Francisco schools are here.
Update, 9/30/10: many comments followed the link to this post at The SF K Files
Update 10/2/10: Rachel Norton, the SF Board member/blogger gets emails asking if the new system will be strategy proof, and she says it will be: Reader mail: questions on student assignment
The original plan was that we would continue to offer our services free of charge to implement the software, and then help monitor the effects of the new choice system.
Last week we heard from SFUSD staff that, because of concerns about sharing confidential data for monitoring the effects of the new system, they have decided to do further development in-house, and so will develop software to implement the new design on their own.
The SFUSD staff have been left with a sufficiently detailed description of the "assignment with transfers" design the Board approved to move ahead with it if they wish. But it will take a good deal of care in implementing the new algorithm in software if its desirable properties--strategic simplicity and non wastefulness--are to be realized. (Both of these features were lacking in the old SFUSD assignment system, the one to be replaced.)
Below are links to some of the key developments before last week.
Here is a post with a link to the video of Muriel Niederle presenting the new design that the Board ultimately voted to adopt: SF School Board Meeting, Feb 17: new choice system.
And here is a link to the slides she presented, giving a description (with examples) of the new choice algorithm: Assignment in the SFUSD, and discussions of the features that make it strategically simple, non wasteful, and flexible.
In March 2010 the San Francisco Board of Education unanimously approved the new system. In their March 2010 press release (now here), the SFUSD reported (emphasis added):
"The choice algorithm was designed with the help of a volunteer team of market design experts who have previously been involved in designing choice algorithms for school choice in Boston and New York City. Volunteers from four prominent universities contributed to the effort, including Clayton Featherstone and Muriel Niederle of Stanford University, Atila Abdulkadiroglu of Duke University, Parag Pathak of MIT, and Alvin Roth of Harvard.
“We are pleased that the district has decided to adopt a choice architecture that makes it safe for parents to concentrate their effort on determining which schools they prefer, with confidence that they won’t hurt their chances by listing their preferences truthfully,” said Niederle and Featherstone, the Stanford research team."
A very simple description of the basic assignment with transfer algorithm is given on page 370 of this paper (where it is called "top trading cycles"). Much of the SFUSD school Board debate has focused on what priorities to implement. What is described on page 370 is a simple version of the underlying choice engine into which the priorities go (with a somewhat different description than in Muriel's slides). The priorities can depend on any characteristics of the students (e.g. previous schools, or siblings, or home zip code) or of the school (e.g. neighborhood or historical student composition). But to keep the process strategically simple--to make it safe for families to rank schools according to their true preferences--the priority of a student at a school cannot depend on how that student ranked that school. (If you happen to be the programmer asked to implement this, drop me a line if you run into trouble:)
Some related developments can be followed on the blog of SF Board of Education member Rachel Norton, including this September 15 post on delay in the implementation of the middle school assignment plan: Recap: Assignment committee recommends delay
General background on the theory and practice of designing school choice algorithms can be found here, and my earlier posts on San Francisco schools are here.
Update, 9/30/10: many comments followed the link to this post at The SF K Files
Update 10/2/10: Rachel Norton, the SF Board member/blogger gets emails asking if the new system will be strategy proof, and she says it will be: Reader mail: questions on student assignment
Wednesday, September 22, 2010
What have we learned from market design? Update to Roth 2008
Not quite a new paper, but I was asked to provide a postscript for Roth (2008).
What have we learned from market design? Update to Roth (2008): September 20, 2010
Alvin E. Roth
"After a market has been designed, adopted, and implemented, it has a continuing life of its own. For those involved directly in the market, it is useful to continue to monitor it to make sure it is functioning well. For those of us involved in market design, it is also good to check how things are going, as a way to find out if there are unanticipated problems that still need to be addressed. Finally, the design and operation of new marketplaces also raises new theoretical questions, which sometimes lead to progress in economic theory. In this update, I’ll briefly point to developments of each of these kinds, since the publication of Roth (2008), What have we learned from market design?. I’ll discuss theoretical results only informally, to avoid having to introduce the full apparatus of notation and technical assumptions."
And here's the 2008 paper:
Roth, Alvin E. "What have we learned from market design?" Hahn Lecture, Economic Journal, 118 (March), 2008, 285-310.
What have we learned from market design? Update to Roth (2008): September 20, 2010
Alvin E. Roth
"After a market has been designed, adopted, and implemented, it has a continuing life of its own. For those involved directly in the market, it is useful to continue to monitor it to make sure it is functioning well. For those of us involved in market design, it is also good to check how things are going, as a way to find out if there are unanticipated problems that still need to be addressed. Finally, the design and operation of new marketplaces also raises new theoretical questions, which sometimes lead to progress in economic theory. In this update, I’ll briefly point to developments of each of these kinds, since the publication of Roth (2008), What have we learned from market design?. I’ll discuss theoretical results only informally, to avoid having to introduce the full apparatus of notation and technical assumptions."
And here's the 2008 paper:
Roth, Alvin E. "What have we learned from market design?" Hahn Lecture, Economic Journal, 118 (March), 2008, 285-310.
Tuesday, September 21, 2010
Computational aspects of matching
The Third International Workshop on Computational Social Choice Düsseldorf, Germany, September 13–16, 2010, looks to have been a very interesting event, and it included a number of papers related to matching:
Where are the Hard Manipulation Problems? Toby Walsh
Allocation via Deferred-Acceptance under Responsive Priorities Lars Ehlers and Bettina Klaus
Fractional Solutions for NTU-Games Péter Biró and Tamás Fleiner
Algorithms for Pareto Stable Assignment Ning Chen and Arpita Ghosh
Stable Marriage Problems with Quantitative Preferences Maria Silvia Pini, Francesca Rossi, Kristen Brent Venable, and Toby Walsh
Local Search for Stable Marriage Problems Mirco Gelain, Maria Silvia Pini, Francesca Rossi, Kristen Brent Venable, and Toby Walsh
HT: Bettina Klaus
Where are the Hard Manipulation Problems? Toby Walsh
Allocation via Deferred-Acceptance under Responsive Priorities Lars Ehlers and Bettina Klaus
Fractional Solutions for NTU-Games Péter Biró and Tamás Fleiner
Algorithms for Pareto Stable Assignment Ning Chen and Arpita Ghosh
Stable Marriage Problems with Quantitative Preferences Maria Silvia Pini, Francesca Rossi, Kristen Brent Venable, and Toby Walsh
Local Search for Stable Marriage Problems Mirco Gelain, Maria Silvia Pini, Francesca Rossi, Kristen Brent Venable, and Toby Walsh
HT: Bettina Klaus
Monday, September 20, 2010
A poorly designed Medicare auction
Peter Cramton writes:
Dear Al,
Below is my email to colleagues in market design. The "brief note" below tells the story. If any readers of your blog would like to sign as well, they are welcome to send me an email and I will add them. Washington is in desperate need for good market designers. I hope this helps. Many thanks for your support!
Dear Colleagues,
Click here for a brief comment (via Dropbox) to the House Ways and Means Health Subcommittee on the Medicare Competitive Bidding Program for Durable Medical Equipment. I would be grateful if you would agree to be a signatory of the comment. As you will see the program has some basic and obvious flaws. Indeed, your reward for reading the short comment is seeing a peculiar pricing rule for multi-unit auctions—set the price at the median winning bid, rather than the highest accepted bid. Remarkably CMS (the agency that administers the auction) has been working for over ten years on this auction program. CMS has conducted several auction events in particular regions of the U.S. to test the program. The tests have demonstrated serious problems, but CMS has chosen to hide the problems and make minor and ineffective changes in response (e.g., changing the pricing rule from unweighted average winning bid to unweighted median winning bid).
There is some urgency to this, since the House Subcommittee will have a hearing on this matter the week of September 27, and I have been asked to testify. I would be grateful if you could reply in the next two days (Wednesday, September 22). A simple "yes" or "no" response is all that is required.
Many thanks!
All the best,
Peter
P.S. For those who would like some additional information on the program, you may be interested in the following:
0. A brief note on the current problems and the need for action.
1. The Request for Bids Instructions. The median pricing rule is defined in Section E (bottom of page 4 and top of page 5). "The single payment amount for an item furnished under a competitive bidding program is equal to the median of the bids submitted for that item by suppliers whose composite bids for the product category are equal to or below the pivotal bid for that product category, see 42 CFR §414.416." [Products are assigned to product categories. A composite bid for a category is the demand-weighted average of a bidder's bids on individual products within the category. This is what creates the bid skewing issue.]
2. The Federal Register, which presents the final rule together with a discussion for its rationale. The winner determination and pricing are discussed on pages 18041-18047. The median pricing rule and its rationale appear in pages 18045-18047. On the rationale, I excerpt the most relevant text below:
"We believe that setting the single payment amount based on the median of the contract suppliers' bids satisfies the statutory requirement that single payment amounts are to be based on bids submitted and accepted. This will result in a single payment for an item under a competitive bidding program that is representative of all acceptable bids, not just the highest or the lowest of the winning bids for that item."
"While this was our proposed approach, we solicited comments on other methodologies for setting the single payment amount, including using an adjustment factor as part of the methodology for setting the single payment amount. This was the methodology we used for the competitive bidding demonstrations..." (p. 18045) [A price adjustment was used in the earlier trials of the program, but it is no longer used.]
"Finally, we considered taking the maximum winning bid for each item. However, this approach would have led to program payment amounts that were higher than necessary because some suppliers were willing to provide these items to beneficiaries at a lower cost." (p. 18046)
3. Katzman and McGeary (2008) study the earlier trials and show the bid skewing problem as well as other problems in these trials.
4. Request for Bids Bidding Form, so you can see what a bid looks like.
5. Eligibility Requirements, so you can get a sense of bidder qualification.
6. Quality Standards, so you can see the limited information on quality standards and performance obligations.
Professor Peter Cramton
Economics, Tydings Hall
University of Maryland
College Park MD 20742-7211
pcramton@gmail.com www.cramton.umd.edu voice/fax +1 240 396 1043
Kidney exchange at the Center for Research on Computation and Society
I'll be speaking today at Harvard's CRCS lunchtime talk:
Monday, September 20, 2010: Alvin Roth, Harvard Business School on Kidney Exchange
Time: 11:30am – 1:00pm
Place: Maxwell Dworkin 119
Title: Kidney Exchange
Abstract: I’ll discuss the history of organized kidney exchange in the last few years, and how the issues of market design have changed as kidney exchange has started to become established.
Bio: Al Roth has taught at Harvard since 1998. He has a joint appointment in the Economics Department and HBS. This semester he is teaching a course on Market Design.
Monday, September 20, 2010: Alvin Roth, Harvard Business School on Kidney Exchange
Time: 11:30am – 1:00pm
Place: Maxwell Dworkin 119
Title: Kidney Exchange
Abstract: I’ll discuss the history of organized kidney exchange in the last few years, and how the issues of market design have changed as kidney exchange has started to become established.
Bio: Al Roth has taught at Harvard since 1998. He has a joint appointment in the Economics Department and HBS. This semester he is teaching a course on Market Design.
Sunday, September 19, 2010
Kidney exchange at NEPKE and the APD
At XXIII International Conference of The Transplantation Society in Vancouver this past August, colleagues of mine presented the following two brief reports:
Hanto, Ruthanne L., Susan L. Saidman, Alvin E. Roth, and Francis L. Delmonico, "The Evolution of a Successful Kidney Paired Donation Program," XXIII International Congress of The Transplantation Society, August 16, 2010, Vancouver.
Rees, Michael A., Jonathan E. Kopke, Ronald P. Pelletier, Dorry L. Segev, Alfredo J. Fabrega, Jeffrey Rogers, Oleh G. Pankewycz, Alvin E. Roth, Tim E. Taber, M. Utku Ünver, Bobby Nibhunubpudy, Alan B. Leichtman, Charles T. VanBuren, Carlton J. Young, Brian J. Gallay, and Robert A. Montgomery, "Nine Non-Simultaneous Extended Altruistic Donor (NEAD) Chains'' XXIII International Congress of The Transplantation Society, August 15-19, 2010, Vancouver.
Hanto, Ruthanne L., Susan L. Saidman, Alvin E. Roth, and Francis L. Delmonico, "The Evolution of a Successful Kidney Paired Donation Program," XXIII International Congress of The Transplantation Society, August 16, 2010, Vancouver.
Rees, Michael A., Jonathan E. Kopke, Ronald P. Pelletier, Dorry L. Segev, Alfredo J. Fabrega, Jeffrey Rogers, Oleh G. Pankewycz, Alvin E. Roth, Tim E. Taber, M. Utku Ünver, Bobby Nibhunubpudy, Alan B. Leichtman, Charles T. VanBuren, Carlton J. Young, Brian J. Gallay, and Robert A. Montgomery, "Nine Non-Simultaneous Extended Altruistic Donor (NEAD) Chains'' XXIII International Congress of The Transplantation Society, August 15-19, 2010, Vancouver.
Saturday, September 18, 2010
The market for books (right after the invention of printing)
Printed books didn't replace hand lettered books and scrolls overnight.
The Boston Globe interviews Andrew Pettegree, a professor of modern history at the University of St. Andrews and author of “The Book in the Renaissance,” the story of the birth of print: The first printed books came with a question: What do you do with these things?
"Inventing the printing press was not the same thing as inventing the publishing business. Technologically, craftsmen were ready to follow Gutenberg’s example, opening presses across Europe. But they could only guess at what to print, and the public saw no particular need to buy books. The books they knew, manuscript texts, were valuable items and were copied to order. The habit of spending money to read something a printer had decided to publish was an alien one.
The Boston Globe interviews Andrew Pettegree, a professor of modern history at the University of St. Andrews and author of “The Book in the Renaissance,” the story of the birth of print: The first printed books came with a question: What do you do with these things?
"Inventing the printing press was not the same thing as inventing the publishing business. Technologically, craftsmen were ready to follow Gutenberg’s example, opening presses across Europe. But they could only guess at what to print, and the public saw no particular need to buy books. The books they knew, manuscript texts, were valuable items and were copied to order. The habit of spending money to read something a printer had decided to publish was an alien one.
Nor was print clearly destined to replace manuscript, from the point of view of the book owners of the day. A few fussy color-printing experiments aside, the new books were monochrome, dull in comparison to illuminated manuscripts. Many books left blank spaces for adding hand decoration, and collectors frequently bound printed pages together with manuscript ones.
...
"As in our own Internet era, culture and commerce went through upheaval as Europe tried to figure out what to make of the new medium and its possibilities. Should it serve to spread familiar Latin texts, or to promote new ideas, written in the vernacular? Was print a vessel for great and serious works, or for quick and sloppy ones? As with the iPad (or the Newton before it), who would want to buy a printed book, and why?
...
"What made print viable, Pettegree found, was not the earth-shaking impact of mighty tomes, but the rustle of countless little pages: almanacs, calendars, municipal announcements. Indulgence certificates, the documents showing that sinners had paid the Catholic church for reduced time in purgatory, were especially popular. These ephemeral jobs were what made printing a viable business through the long decades while book publishers — and the public — struggled to find what else this new technology might be good for.
...
"PETTEGREE: What you’ve got to do once you’ve got 300 identical copies of a book is you’ve got to sell it to people who don’t even yet know they want it. And that’s a very, very different way of selling.
...
"As in our own Internet era, culture and commerce went through upheaval as Europe tried to figure out what to make of the new medium and its possibilities. Should it serve to spread familiar Latin texts, or to promote new ideas, written in the vernacular? Was print a vessel for great and serious works, or for quick and sloppy ones? As with the iPad (or the Newton before it), who would want to buy a printed book, and why?
...
"What made print viable, Pettegree found, was not the earth-shaking impact of mighty tomes, but the rustle of countless little pages: almanacs, calendars, municipal announcements. Indulgence certificates, the documents showing that sinners had paid the Catholic church for reduced time in purgatory, were especially popular. These ephemeral jobs were what made printing a viable business through the long decades while book publishers — and the public — struggled to find what else this new technology might be good for.
...
"PETTEGREE: What you’ve got to do once you’ve got 300 identical copies of a book is you’ve got to sell it to people who don’t even yet know they want it. And that’s a very, very different way of selling.
And whereas the printers were taking advice from 15th-century humanist scholars, who said, “Wouldn’t it be good to have this? Wouldn’t it be good to have that?” they weren’t in any position to give them any advice on how to dispose of these 300 copies. And in due course they found that the only way to do this is to create a market which is trans-European.
It’s this classic example of how you get technological innovation without people really being aware of the commercial implications, of how you can make money from it. There’s quite a little similarity in the first generation of print with the dot-com boom and bust of the ’90s, where people have this fantastic new innovation, a lot of creative energy is put into it, a lot of development capital is put into it, and then people say, “Well, yeah, but how are we going to make money from the Internet?” And that takes another 10 years to work out.
IDEAS: The one thing that most early printers seemed to do was to go out of business.
PETTEGREE: And the ones who didn’t were the ones who tended to have a close relationship with official customers. And this really I think is the new part of the story that we’ve been able to put together.
Most narratives of print have relied on looking at the most eye-catching products — whether it’s Gutenberg’s Bible or Copernicus or the polyglot Bible of Plantin — these are the ones which seem to push civilization forward. In fact, these are very untypical productions of the 16th-century press.
I’ve done a specific study of the Low Countries, and there, something like 40 percent of all the books published before 1600 would have taken less than two days to print. That’s a phenomenal market, and it’s a very productive one for the printers. These are the sort of books they want to produce, tiny books. Very often they’re not even trying to sell them retail. They’re a commissioned book for a particular customer, who might be the town council or a local church, and they get paid for the whole edition. And those are the people who tended to stay in business in the first age of print."
Friday, September 17, 2010
Cleaning up the scramble for medical residents with SOAP
Changes are coming in the scramble that follows the medical resident match run by the National Resident Matching Program (NRMP). A new, semi-centralized, partially computerized Supplemental Offer and Acceptance Program (SOAP) has been announced, for implementation in March 2010.
If I understand the proposal correctly, residency programs with unmatched positions will be able to submit preference lists of match participants who ended up unmatched, and these preferences will be used to make exploding offers, after which the preference lists and positions will be updated to take account of acceptances (e.g. candidates who accept a position will be removed from other program's preference lists), and new exploding offers will be issued. Unlike in the main match (which these days uses the Roth-Peranson algorithm, but which you can think of as a student-proposing deferred acceptance algorithm), applicants will not submit preference lists, but will accept or reject offers as they come in (i.e. they cannot defer acceptances by holding their best offer until they see if any better offers arrive later).
Part of the proposal is to integrate the scramble with the Electronic Residency Application Service (ERAS), which will make some kinds of automatic processing and regulation possible,while some of the proposed regulations may be more challenging to enforce. (Markets that use exploding offers at fixed times have often been subject to cheating of various sorts: here's a paper on the experience of the law clerk market. There are lots of differences in the market culture of doctors and lawyers that may result in different outcomes.)
Here are some of its proposed rules:
• Unmatched applicant and unfilled program information will be released simultaneously.
• There will be a “time out” period during which unmatched applicants can send applications but programs cannot make offers.
• Applicants and programs will be required to send and receive applications only through ERAS.
• NRMP-participating programs that fill positions during Match Week must do so only through the SOAP.
• New functionality will be added to the R3 System to allow programs to offer unfilled positions on the basis of preference lists submitted by the programs.
• Applicants must accept or reject their offer(s) within a specific timeframe; offers not accepted or rejected will expire.
• The R3 System will establish an electronic “handshake” when an applicant accepts a position.
• Positions will be deleted from the dynamic List of Unfilled Programs once an offer has been accepted.
• A program’s unfilled positions will be offered to applicants in order of preference until all positions are filled or the preference list has been exhausted; programs will be able to add applicants to the bottom of their preference lists throughout Match Week.
• The NRMP Match Participation Agreement will be expanded to include Match Week and SOAP, and sanctions will be imposed for improper behavior.
...
Eligible NRMP applicants:
• Must be able to enter GME on July 1 in the year of the Match
• Will be able to apply only to unfilled Match-participating programs during Match Week
Access to the List of Unfilled Programs will be restricted by match status (preliminary or advanced)
Must use ERAS and will be able to select only unfilled Match-participating programs
Cannot use phone, fax, email, or other methods
Cannot have another individual/entity contact programs on applicant’s behalf
Will be able to accept positions only through SOAP during Match Week
• Can apply to non-Match-participating programs after Match Week
Ineligible NRMP applicants:
• Cannot participate in SOAP
Cannot apply to Match-participating programs using ERAS, phone, fax, email, or other methods
Cannot have another individual/entity contact Match-participating programs on applicant’s behalf
• Can apply to non-Match-participating programs during Match Week
Can use ERAS to select non-Match-participating programs
Can use phone, fax, email, or other methods
• Can apply to Match-participating programs after Match Week
Unfilled Programs:
• Must accept applications only through ERAS during Match Week
Cannot use phone, fax, email, or personal contacts
• Must fill positions using SOAP during Match Week
Cannot offer positions to ineligible applicants during Match Week
Cannot make offers outside SOAP during Match Week
Are not required to fill positions during Match Week
• Can add applicants to bottom of preference list
If an applicant rejects an offer or allows an offer to expire, no further offers will be made to that applicant by the same program.
Once an applicant accepts an offer, the applicant will not be able to send additional applications via ERAS.
Once a program has filled all of its positions through SOAP, applicants will be unable to send applications to that program via ERAS.
Offers extended by programs and accepted by applicants during the Match Week Supplemental Offer and Acceptance Program (SOAP) will create a binding commitment. Failure to honor that commitment or failure to adhere to SOAP policies will be a violation of the Match Participation Agreement.
If I understand the proposal correctly, residency programs with unmatched positions will be able to submit preference lists of match participants who ended up unmatched, and these preferences will be used to make exploding offers, after which the preference lists and positions will be updated to take account of acceptances (e.g. candidates who accept a position will be removed from other program's preference lists), and new exploding offers will be issued. Unlike in the main match (which these days uses the Roth-Peranson algorithm, but which you can think of as a student-proposing deferred acceptance algorithm), applicants will not submit preference lists, but will accept or reject offers as they come in (i.e. they cannot defer acceptances by holding their best offer until they see if any better offers arrive later).
Part of the proposal is to integrate the scramble with the Electronic Residency Application Service (ERAS), which will make some kinds of automatic processing and regulation possible,while some of the proposed regulations may be more challenging to enforce. (Markets that use exploding offers at fixed times have often been subject to cheating of various sorts: here's a paper on the experience of the law clerk market. There are lots of differences in the market culture of doctors and lawyers that may result in different outcomes.)
Here are some of its proposed rules:
• Unmatched applicant and unfilled program information will be released simultaneously.
• There will be a “time out” period during which unmatched applicants can send applications but programs cannot make offers.
• Applicants and programs will be required to send and receive applications only through ERAS.
• NRMP-participating programs that fill positions during Match Week must do so only through the SOAP.
• New functionality will be added to the R3 System to allow programs to offer unfilled positions on the basis of preference lists submitted by the programs.
• Applicants must accept or reject their offer(s) within a specific timeframe; offers not accepted or rejected will expire.
• The R3 System will establish an electronic “handshake” when an applicant accepts a position.
• Positions will be deleted from the dynamic List of Unfilled Programs once an offer has been accepted.
• A program’s unfilled positions will be offered to applicants in order of preference until all positions are filled or the preference list has been exhausted; programs will be able to add applicants to the bottom of their preference lists throughout Match Week.
• The NRMP Match Participation Agreement will be expanded to include Match Week and SOAP, and sanctions will be imposed for improper behavior.
...
Eligible NRMP applicants:
• Must be able to enter GME on July 1 in the year of the Match
• Will be able to apply only to unfilled Match-participating programs during Match Week
Access to the List of Unfilled Programs will be restricted by match status (preliminary or advanced)
Must use ERAS and will be able to select only unfilled Match-participating programs
Cannot use phone, fax, email, or other methods
Cannot have another individual/entity contact programs on applicant’s behalf
Will be able to accept positions only through SOAP during Match Week
• Can apply to non-Match-participating programs after Match Week
Ineligible NRMP applicants:
• Cannot participate in SOAP
Cannot apply to Match-participating programs using ERAS, phone, fax, email, or other methods
Cannot have another individual/entity contact Match-participating programs on applicant’s behalf
• Can apply to non-Match-participating programs during Match Week
Can use ERAS to select non-Match-participating programs
Can use phone, fax, email, or other methods
• Can apply to Match-participating programs after Match Week
Unfilled Programs:
• Must accept applications only through ERAS during Match Week
Cannot use phone, fax, email, or personal contacts
• Must fill positions using SOAP during Match Week
Cannot offer positions to ineligible applicants during Match Week
Cannot make offers outside SOAP during Match Week
Are not required to fill positions during Match Week
• Can add applicants to bottom of preference list
If an applicant rejects an offer or allows an offer to expire, no further offers will be made to that applicant by the same program.
Once an applicant accepts an offer, the applicant will not be able to send additional applications via ERAS.
Once a program has filled all of its positions through SOAP, applicants will be unable to send applications to that program via ERAS.
Offers extended by programs and accepted by applicants during the Match Week Supplemental Offer and Acceptance Program (SOAP) will create a binding commitment. Failure to honor that commitment or failure to adhere to SOAP policies will be a violation of the Match Participation Agreement.
Thursday, September 16, 2010
Could academic tenure become a repugnant transaction?
In an essay in the NY Times Book Review, Christopher Shea reflects on some recent books that suggest it might: The End of Tenure?
"In tough economic times, it’s easy to gin up anger against elites. The bashing of bankers is already so robust that the economist William Easterly has compared it, with perhaps a touch of hyperbole, to genocidal racism. But in recent months, a more unlikely privileged group has found itself in the cross hairs: tenured professors.
"At a time when nearly one in 10 American workers is unemployed, here’s a crew (the complaint goes) who are guaranteed jobs for life, teach only a few hours a week, routinely get entire years off, dump grading duties onto graduate students and produce “research” on subjects like “Rednecks, Queers and Country Music” or “The Whatness of Books.” Or maybe they stop doing research altogether (who’s going to stop them?), dropping their workweek to a manageable dozen hours or so, all while making $100,000 or more a year. Ready to grab that pitchfork yet?
"That sketch — relayed on numerous blogs and op-ed pages — is exaggerated, but no one who has observed the academic world could call it entirely false. And it’s a vision that has caught on with an American public worried about how to foot the bill for it all. The cost of a college education has risen, in real dollars, by 250 to 300 percent over the past three decades, far above the rate of inflation. Elite private colleges can cost more than $200,000 over four years. Total student-loan debt, at nearly $830 billion, recently surpassed total national credit card debt. Meanwhile, university presidents, who can make upward of $1 million annually, gravely intone that the $50,000 price tag doesn’t even cover the full cost of a year’s education. (Consider the balance a gift!) Then your daughter reports that her history prof is a part-time adjunct, who might be making $1,500 for a semester’s work. There’s something wrong with this picture.
...
"The higher-ed jeremiads of the last generation came mainly from the right. But this time, it’s the tenured radicals — or at least the tenured liberals — who are leading the charge. "
He goes on to say that the books he reviews call for a separation of research and teaching, with universities to concentrate only on teaching.
Tenure is tied up with a different bundle of issues at research universities, but even here it can raise questions, as the Harvard Crimson reports in connection with a recent, widely reported case of academic misconduct (about which relatively little has yet been made public): Hauser Losing Tenure Not Likely, Harvard’s History Shows--A review of recent cases of faculty misconduct reveals tenure termination is rare
"In tough economic times, it’s easy to gin up anger against elites. The bashing of bankers is already so robust that the economist William Easterly has compared it, with perhaps a touch of hyperbole, to genocidal racism. But in recent months, a more unlikely privileged group has found itself in the cross hairs: tenured professors.
"At a time when nearly one in 10 American workers is unemployed, here’s a crew (the complaint goes) who are guaranteed jobs for life, teach only a few hours a week, routinely get entire years off, dump grading duties onto graduate students and produce “research” on subjects like “Rednecks, Queers and Country Music” or “The Whatness of Books.” Or maybe they stop doing research altogether (who’s going to stop them?), dropping their workweek to a manageable dozen hours or so, all while making $100,000 or more a year. Ready to grab that pitchfork yet?
"That sketch — relayed on numerous blogs and op-ed pages — is exaggerated, but no one who has observed the academic world could call it entirely false. And it’s a vision that has caught on with an American public worried about how to foot the bill for it all. The cost of a college education has risen, in real dollars, by 250 to 300 percent over the past three decades, far above the rate of inflation. Elite private colleges can cost more than $200,000 over four years. Total student-loan debt, at nearly $830 billion, recently surpassed total national credit card debt. Meanwhile, university presidents, who can make upward of $1 million annually, gravely intone that the $50,000 price tag doesn’t even cover the full cost of a year’s education. (Consider the balance a gift!) Then your daughter reports that her history prof is a part-time adjunct, who might be making $1,500 for a semester’s work. There’s something wrong with this picture.
...
"The higher-ed jeremiads of the last generation came mainly from the right. But this time, it’s the tenured radicals — or at least the tenured liberals — who are leading the charge. "
He goes on to say that the books he reviews call for a separation of research and teaching, with universities to concentrate only on teaching.
Tenure is tied up with a different bundle of issues at research universities, but even here it can raise questions, as the Harvard Crimson reports in connection with a recent, widely reported case of academic misconduct (about which relatively little has yet been made public): Hauser Losing Tenure Not Likely, Harvard’s History Shows--A review of recent cases of faculty misconduct reveals tenure termination is rare
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