Robert Aumann on Shapley and Roth and matching and market design

Bob Aumann writes in the February 2013 Notices of the American Mathematical Society (in a column hosted by Elaine Kehoe): Shapley and Roth Awarded Nobel Prize in Economics

After summarizing Shapley's work, Aumann (who shared the 2005 Nobel Economics prize) concludes "On each of these counts, Shapley has done more than all the previous game theory Nobelists, even when taken together."

I should add that I find myself moved to be saluted by Aumann in the same article (and not just because he praises me too extravagantly:). When I was a young game theorist in the 1970's, Bob Aumann and Bob Wilson were for me the welcoming faces of game theory, and I resolved, if I thrived, to try to be as supportive of young people as they were. I hope I've succeeded in that too.

Not every new discipline has the welcoming, community-of-scholars culture that game theory enjoyed in those days. I hope that market design continues to thrive in this way (as well as being a team sport).

My guess from my limited personal experience is that the "culture" of a discipline is particularly important when it is still new...that might be something for historians and sociologists of science to look into.

Roberto Serrano on Lloyd Shapley

I had the unexpected pleasure of running into Roberto Serrano and Vince Crawford in Stockholm, where they were guests of the Nobel Foundation.

 Now here is a forthcoming paper by Roberto, on Lloyd Shapley's contributions:

R. Serrano, “Lloyd Shapley’s Matching and Game Theory,” Scandinavian Journal of Economics, forthcoming.

High bids for tuna at Tsukiji fish market celebrate the new year

Bluefin tuna sells for record $1.76 million at Tokyo auction, 3 times previous record

"A bluefin tuna sold for a record $1.76 million at a Tokyo auction Saturday, nearly three times the previous high set last year
...
"In the year’s first auction at Tokyo’s sprawling Tsukiji fish market, the 222-kilogram (489-pound) tuna caught off northeastern Japan sold for 155.4 million yen
...
The winning bidder, Kiyoshi Kimura, president of Kiyomura Co., which operates the Sushi-Zanmai restaurant chain, said “the price was a bit high,” but that he wanted to “encourage Japan,” according to Kyodo News agency. He was planning to serve the fish to customers later Saturday.

"Kimura also set the old record of 56.4 million yen at last year’s New Year’s auction, which tends to attract high bids as a celebratory way to kick off the new year — or get some publicity.

Advice on interviewing at the job market meetings

Good luck to all those interviewing at the job market meetings in San Diego!

Here's some advice, written by an historian, that applies well to economics too (and probably any academic job market): Advice for the Job Season: Interviewing

"My primary advice for interviewing is to tell candidates that THE SEARCH COMMITTEE MEMBERS WANT YOU TO DO WELL!!!
...
"I promise you, we did not just slog through hundreds of pages of recommendation letters and your prose, pick you out of hundreds of applicants, fly to some god-forsaken icy city, and swill cheap coffee and bagels in a cold hotel room waiting for you because we are eager to humiliate you. While it is possible that there is someone in that room who doesn’t like your work, the majority of the committee has gone to the mat to get you onto the interview list, and those search committee members are secretly praying that you will hit a home run. They are on your side.

"You may well not know which members those are, though, so do not make any assumptions about who are your friends and who are potential enemies on a committee. Treat everyone as interested colleagues. Even the old jerk in the corner asking impossible questions might be on your side. And if not, the chances are good that everyone else in the room recognizes that s/he’s an old curmudgeon, and are hoping that you will handle her/him with aplomb.
The committee members want you to do well, so help them out. Almost certainly there will be faculty members from different fields in the room who only know your field generally. So explain immediately what you do, and why it is important to someone outside your specialty. Do not make them plead with you to articulate why what you do is significant. (Clearly, they think it is, or they would not have brought you in for an interview."

Costs of early admissions--to colleges

For starters, here's a November 15 column from the Chronicle of Higher Ed that I hesitated blogging about, since the URL seems to suggest it's just a draft. But it's been out for a while now despite that (http://chronicle.com/blogs/headcount/draft-do-not-publishthe-costs-of-early-admission-programs-are-many/32792)
The Costs of Early-Admission Programs Are Many

The author, Louis Hirsh, was an admissions director at Deleware, and he recounds some of the costs of unraveling from the University's perspective.

There is no a virtue in giving teachers and counselors less time to write recommendations, especially when their letters would be more useful if they were written after they had seen more of their student’s senior year work.

Meanwhile, at admissions offices the growing number of early-notification applicants compresses the work of several months into several weeks. How ironic that we spend much of the year imploring students to write thoughtful applications only to hobble ourselves with early deadlines that make it impossible to give those applications the careful consideration that they richly deserve.

Defenders of early notification say that it relieves stress to be able to sit down for a holiday meal in December and know that you already have a college admission in hand. I don’t doubt that. I also agree that those who get “no” answers at least know where they stand, and can turn their attentions elsewhere.

The problem is that for many the answer is not “yes” or “no,” but “maybe.” If yours is a very selective college, the majority of your early applicants will become deferrals who are caught in an admissions limbo, an extended wait list, if you will. What about those students and their stress levels?

As anxious—and sometimes irate—parents and counselors call to ask about the decision and their student’s chances for eventual admission, your staff spends an inordinate amount of time in January and February talking to disgruntled people. That is bad for morale, and it certainly isn’t how you want your colleagues spending their time.

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In the meantime, Harvard Magazine reports
"EARLY ACTION ACCELERATES. The College received 4,856 early-action applications for admission to the class of 2017, up 15 percent from 4,228 last year, when the program resumed after a four-year hiatus. Most other Ivy League schools also reported more early applicants this year, as students seek an admissions edge."

Supreme Court Clerks--some hiring already for 2014

The Above the Law blog has the scoop: Supreme Court Clerk Hiring Watch: OT 2013 and OT 2014, which also has some links to background material on clerking for the Supremes...

Eating horse meat in France: could it become repugnant even there?

Alex Peysakhovich sends along the following evidence that there are those in France who find eating horsemeat repugnant...and take out ads on buses. Of course the chevalines (horse butchers) are fighting back with stickers of their own...

Repugnant transactions at year's end...

Each of the stories below is about a transaction still regarded as repugnant in England, Israel, and Australia, respectively, but for which things may be different in the coming year...including the final story from Russia, about an effort to make U.S. adoptions illegal (so that Russian orphans would remain so...)

Gay marriage plans are totalitarian, says Archbishop of Westminster

Record number turn out at Boxing Day hunts after Tories admit defeat on ban

Israel to Review Curbs on Women’s Prayer at Western Wall

Women who donate their eggs deserve compensation

Putin Signs Bill That Bars U.S. Adoptions

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And here are some stories about transactions that are less repugnant than they used to be...

Same sex marriage becomes legal in Maine
"Voters approved the new law in November, making Maine one of the first three states, along with Washington and Maryland, to allow same-sex marriage by popular vote. The law has already taken effect in Washington State; Maryland’s will do so on Tuesday.
"Same-sex marriage was already legal in Connecticut, Iowa, Massachusetts, New Hampshire, New York, Vermont and the District of Columbia, but those laws were enacted either by lawmakers or through court rulings."

in vitro fertilization (IVF): "For a while, the press kept track of each new I.V.F. birth: one more reported before the end of 1978; four by the middle of 1980; the first in the United States at the end of 1981. In 1982, Lesley gave birth to another daughter, Natalie; she was the world’s 40th test-tube baby. And then people stopped counting. I.V.F. had moved almost imperceptibly in the public mind from unethical to frightening to just a bit unusual — and then, finally, to something so ordinary it wasn’t even noticed anymore."

Celsius' temperature scale (and other delights at Uppsala University)

While in Sweden I had a delightful visit to Uppsala University.

It was there, in the 1700's (as the University was  already nearing its 300th anniversary) that Anders Celsius undertook the meteorological research that required his invention of the temperature scale that bears his name. Except not quite in the form we know it today.  Here's a picture I took of one of his original thermometers, through the display case in a University museum: If you can click through and look at the enlargement, you'll see that the top of the scale (far left), which marks the boiling point of water, is marked 0 degrees, while the middle of the scale, which marks water's freezing point, is marked 100. (Celsius apparently felt that solids were 'more' than gases...). The reversal to what we know today as the conventional Celsius scale came in 1745, shortly after his death.

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It turns out that Uppsala University has other interesting museums, and in one of them I took a picture of what is said to be an example of the first circulating bank note...

More photography business in Stockholm

My recent trip to Sweden made me of interest to a variety of professional photographers, and in turn gave me a glimpse into the ways they earn their livings. Here's the website of the Swedish photographer Otto Westerlundh. If you scroll down his web page you can get some idea of the wide variety of pictures he shoots. He took some pics of me at a reception in Stockholm.

Speaking of photos, below is one my wife took with her phone, at the rehearsal for the Nobel award ceremony. You can see me practice receiving the award from a stand-in for the Swedish king. You can also pick out the Californians from among the laureates: my Stanford colleague Brian Kobilka is the other fellow in jeans...(The same photo, more or less, later in the day at the actual ceremony is here.)

Towards decriminalizing drugs?

The Economist reports on remarks by the outgoing Mexican President Felipe Calderón: "Impossible" to end drug trade, says Calderón

"Mr Calderón’s comments sum up what seems to be a growing consensus: stopping or even seriously reducing drug consumption has so far proved impossible, so it is time to focus on ways of making that consumption less harmful. That sort of thinking has been fashionable for a long time on the demand side, with innovations such as needle exchanges and methadone replacement now common in many rich countries. The next step is to explore legal ways of managing the supply side, as Colorado and Washington have recently voted to do.

"Sitting presidents such as Juan Manuel Santos of Colombia and Otto Pérez Molina of Guatemala are pushing for a rethink. As a result of this agitation the Organisation of American States, a regional body, is compiling a report on drug policy which is expected to explore alternatives to the current regime. It will be interesting to see if Mr Calderón, who is widely expected to take up a post at Harvard after leaving the presidency in December, gets bolder still in his retirement."

HT: László Sándor

Returning items at stores in the US and Europe: two different equilibria?

A recent article about the policies adopted by American stores regarding returns, particularly of gifts, has gotten me thinking about the different equilbria which (I am under the impression) exist in Europe and the U.S.

Most U.S. stores have a no questions asked return policy. Subject to some limitations, you can return an item, for any reason, i.e. it doesn't have to be broken. The limitations may include things like time elapsed since purchase, whether the item has been used, etc. But policies are more lenient on items received as Christmas gifts (and here's the story that made me think of all this: Navigating Retail Holiday Return Policies. In many cases you can get your money back, in some cases you might just get credit for another purchase.

My impression is that in Europe you can return items for repair, but not for exchange.

Why are the policies different?  It seems to me that they may both be in equilibrium, so that it is hard to switch from one to another.

If an American store were to adopt a no return policy, that might seem to signal something about the unobserved quality of their goods, and it would shift sales to competitors who maintained easy return policies. And easy returns promote sales, since there is less risk in buying something, bringing it home, and seeing how it looks.

But if a European store were to adopt an easy return policy, while its competitors did not, then it would invite adverse selection of shoppers who were planning to return things (e.g. returning a gown after wearing it once). These shoppers plague American stores too, but they are spread among all stores and are a cost of doing business. But a European store that was the first to adopt an easy return policy would attract all the bad apples...

Perhaps European readers can tell me if my impressions are correct about the differences in store policies across the water...

Kidney exchange in Canada

Moving to chains in Canada too...


Heartbeat: A chain of faith, a gift of life: Revolutionary organ exchange program can involve a domino chain of up to 10 people across Canada, and it drastically reduces wait times for transplant recipients

 "Nemeth was feeling increasingly ill and didn’t have that long to wait.

"Luckily, she didn’t have to. In early 2012, at her doctor’s urging, she joined the Living Donor Paired Exchange program.

"In the registry, donor-recipient pairs whose organs are incompatible with each other can be matched with others in the same situation and the organs swapped to complete transplants. There are Good Samaritans — non-directed anonymous donors — who simply donate a kidney out of altruism also entered in the registry. Algorithms determine matches to optimize use of rare blood and antibody types: swaps that result can involve up to five-pair chains — up to 10 people in cities across Canada all intricately linked in a complex “domino” transplant.

"The registry was founded as a pilot project in three provinces, including B.C., in 2009. It has since gone national and is overseen by Canadian Blood Services, which conducts three (formerly four) searches or “runs” a year.

"To date, there are about 145 registered pairs.

"More than 140 transplants have been performed, with the first cross-country multi-hospital swap in June 2009. Nemeth’s own chain involved three pairs: done at St. Paul’s and in Winnipeg.

"The program not only shortens waits and saves lives, but it also saves money: dialysis costs $60,000 a year while a kidney transplant is around $25,000 plus $6,000 a year for medication.

"Even before the national registry, provincial hospitals like St. Paul’s were doing ad hoc local swaps for just these reasons.

“We were basically doing these on the back of an envelope,” Dr. Landsberg said, adding St. Paul’s did its first regional domino transplant around 2006.

"But the national registry has been a true game-changer. Because of it, he said, “the number of difficult to match patients who were stacked on that wait-list and who I predicted would be on there forever have been able to get transplants.”

"And despite the tenuous nature of the chains, so far, he said, “We’ve never had a donor back out.”

The global strategic maple syrup reserve

The global strategic maple syrup reserve has been breached, here's the NY Times story: In $18 Million Theft, Victim Was a Canadian Maple Syrup Cartel

And here is the site of the Federation of Quebec Maple Syrup Producers

I used to bring small bottles of New England maple syrup with me as American themed house gifts when I traveled overseas...but it turns out that Canada is the big producer (I guess the Canadian flag is a clue...)

Neil Dorosin on school choice

Neil Dorosin: The Elephant in the Classroom – School Choice Exists. We Just Manage it Poorly.

Same sex marriage in France: protest and counterprotest

Protests erupt in France over same-sex marriage

"More than 100,000 protesters organized by Catholic groups staged separate demonstrations in French cities over the weekend to protest against government plans to legalize same-sex marriage next year.

"Most of them took to the streets on Saturday, backed by the French Catholic Church and joined by several senior clerics, and several thousand more paraded with ultra-traditionalist Catholics in Paris on Sunday."

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Topless activists clash with an anti-gay marriage protest in France

Market designers at Yahoo!, Google, eBay and Microsoft

The Economist recently celebrated the contributions of Preston McAfee, Hal Varian, Steve Tadelis and Susan Athey: Micro stars, macro effects: Meet the economists who are making markets work better

Video of Nobel prize awards ceremony

I'm almost recovered from my trip to Stockholm:) Here is the video of the Nobel presentation ceremonies. Economics starts around 1:12. with intro in Swedish by Thorsten Persson, and 1:16 in English
http://www.svtplay.se/video/892980/prisutdelningen-i-konserhuset

And here are the iconic pictures from the Nobel website:

Update: the Nobel Foundation website now has short video clips of both me and Lloyd receiving our prizes:
Alvin Roth receives his prize
Lloyd Shapley receives his prize

Martin Shubik

The celebration of Lloyd Shapley at the recent Nobel week naturally makes people think of his long term collaborator Martin Shubik. There's a nice discussion of his work by the archivists at the Duke University libraries, which houses his papers: The Martin Shubik Papers: From Early Game Theory to the Strategic Analysis of War

"While Shubik was born in New York City in 1926, he received his early education in England. After moving to Canada, he graduated with a B.A. in mathematics and subsequently with an M.A. in political economy from the University of Toronto in 1947. Equipped with this background, Shubik arrived at Princeton University in 1949, where the archival record begins. He received a Ph.D. in economics in 1953 under the supervision of Oskar Morgenstern, one of the founding fathers of game theory. The influence of his supervisor becomes apparent in Shubik’s collection, not only through the class notes Shubik took of Morgenstern’s lectures and in the correspondence with him throughout the years, but also indirectly through Shubik’s life-long contributions to game theory and its application to economic problems. And, like Morgenstern, Shubik frequently voiced a critical attitude towards purely theoretical work.

"Shubik’s collection is a treasure-house of primary resources on economics, especially for researchers interested in the early years of game theory. Shubik was part of an inspiring group of students during his stay at Princeton, including Harold Kuhn, John McCarthy, John Milnor, John Nash (Nobel Prize, 1994), Norman Shapiro, and Lloyd Shapley (Nobel Prize, 2012), who were pioneers in the field of game theory and would continue to shape the history of American mathematical economics during the second half of the 20th century. Innumerable drafts of Shubik’s collaborative works, often accompanied by correspondence and research notes by his co-authors, afford an inspiring set of resources evoking that historical period. The collection contains Shubik’s and Shapley’s drafts and notes on their joint works on game theory, from their early papers in the 1950s to their collaboration during the 1970s at the RAND corporation. The collection also allows for personal glimpses into Shubik’s life. For example, Shubik’s life-long friendship and professional collaboration with Shapley is reflected in the extensive correspondence throughout their academic careers. Similarly, Shubik’s exchanges with Nash (sometimes through humorous cards and joke letters) offer a unique source for historians interested in the early years of game theory and the history of modern economics."

Market design is a team sport

Muriel Niederle has been posting some pictures from Stockholm, and here are some of mine...

First, the final slide from my Nobel lecture:

It turns out that parts of the teams for kidney exchange, school choice and medical matches made it to Stockholm, and those folks look a little different in tails and gowns:

School choice: Parag Pathak, Al Roth, Atila Abdulkadiroglu, Neil Dorosin

Medical matches: Elliott Peranson, Al Roth, Muriel Niederle

Kidney Exchange: Frank Delmonico, Al Roth, Mike Rees, Itai Ashlagi