Who Gets What and Why? at Duke Law School (video: one hour including Q&A)

Here's a video of one of the talks I gave at Duke Law School last Wednesday, sponsored by The Duke Project on Law and Markets.



And here is a link to Kim Krawiec's blog post about this and my other talks at Duke on the same day: Our Day Of Market Design,

 It came with this picture:

And here is a link to some more pictures from Kim:
"Who Gets What And Why? Photos And Video

Our communications folk were out in full force for Al Roth’s lecture on Wednesday and have already posted some nice photos from the event and uploaded a video of the lecture to YouTube. "

Surprising consequences of minimum tick size in financial markets

Two papers on minimum tick sizes as elements of market design:

What Drives Price Dispersion and Market Fragmentation across U.S. Stock Exchanges?

Yong Chao 

University of Louisville - College of Business - Department of Economics

Chen Yao 

University of Warwick

Mao Ye 

University of Illinois at Urbana-Champaign
January 23, 2016
Abstract:      

We propose a theoretical model to explain two salient features of the U.S. stock exchange industry: (i) sizable dispersion and frequent changes in stock exchange fees; and (ii) the proliferation of stock exchanges offering identical transaction services, highlighting the role of discrete pricing. Exchange operators in the United States compete for order flow by setting “make” fees for limit orders (“makers”) and “take” fees for market orders (“takers”). When traders can quote continuous prices, the manner in which operators divide the total fee between makers and takers is irrelevant because traders can choose prices that perfectly counteract any fee division. If such is the case, order flow consolidates on the exchange with the lowest total fee. The one-cent minimum tick size imposed by the U.S. Securities and Exchange Commission’s Rule 612(c) of Regulation National Market Systems for traders prevents perfect neutralization and eliminates mutually agreeable trades at price levels within a tick. These frictions (i) create both scope and incentive for an operator to establish multiple exchanges that differ in fee structure in order to engage in second-degree price discrimination; and (ii) lead to mixed-strategy equilibria with positive profits for competing operators, rather than to zero-fee, zero-profit Bertrand equilibrium. Policy proposals that require exchanges to charge one side only or to divide the total fee equally between the two sides would lead to zero make and take fees, but the welfare effects of these two proposals are mixed under tick size constraints.

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Why Trading Speed Matters: A Tale of Queue Rationing under Price Controls

Chen Yao 

University of Warwick

Mao Ye 

University of Illinois at Urbana-Champaign
September 16, 2015

Abstract:      

Queue rationing under price controls drives speed competition in liquidity provision. We find that a one-cent tick size generates higher revenues and longer queues of liquidity provision for lower-priced (larger relative tick size) securities. Speed allows high-frequency traders (HFTs) to establish time priority in the queue; non-HFTs are forced to demand liquidity despite increased liquidity provision revenue. Difference-in-differences tests using exchange-traded funds (ETFs) tracking the same index show that speed competition led by queuing does not affect transaction costs controlling relative tick size, but a larger relative tick size reduces liquidity and increases HFT liquidity provision.

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And here are links to video presentations by Mao Ye:

The high-frequency trading paper is on:

http://submit.utahwfc.org/2015_webcast/uwfc_2015_video_1.html

The exchange competition paper is on

http://submit.utahwfc.org/2016_webcast/uwfc_2016_video_5.html

A trading firm promises to restrain itself from early exploding offers

Self restraint doesn't always do the trick, but is worth a try: here's a post from the Jane Street blog.

Unraveling of the tech hiring market

Thu, 2016/03/17 - 3:20pm - David Powers | OCaml

Recruiting talented people has always been challenging.

In some years that meant competing with a hot new company that aggressively courted every fresh graduate with promises of stock options and IPO glory.  In other years there wasn’t a specific company so much as an entire rising industry looking for people (I’m looking at you cloud services, driverless cars, and peer-to-peer sharing).  Either way, we understood the yearly back and forth.  Our job was to explain to candidates how we stacked up, and more importantly, why a career at Jane Street might be the right choice for many of them.

But this year I got to learn a new name for a new challenge.  “Unraveling”.

I first encountered it in a book I was reading for fun: "Who Gets What, and Why", by the Nobel Prize-winning economist Alvin Roth.  He does a lovely job explaining the idea of a matching market.  In a matching market each person wants only one of each item, each item is unique, and each item can be given to at most one person at a time.  Jobs are a classic matching market, and just like any market, matching markets can work well, or poorly.

Unraveling is one of the primary things that makes a matching market fail.  When a market unravels  matches start to happen earlier and earlier, to the point where people no longer get a complete view of their options.  In the book Roth relates the story of a person who stepped off of a plane to find three voicemails on his phone.  The first offered him a job, the second urged him to respond soon, and the last rescinded the offer because he hadn't responded quickly enough.

We call them exploding offers, and this year they have gotten completely out of hand as companies race to the bottom in their efforts to recruit the next wave of interns and fresh graduates.

Colleges try to impose deadline limits explicitly to stop unraveling, and in the past these have largely been honored.  The cheating and fudging, such as it was, was kept to the fringes.  But this year it seems like the seal is broken, and we've seen major companies delivering internship and full-time offers with 2 week (and less) hard deadlines.  Other companies now routinely deliver expiring bonus offers for signing early.  Many of these offers circumvent or outright break the guidelines set down by schools, and if past matching markets are a model for this one, next year will come with even earlier offers and worse conditions.

This unraveling has been the subject of a lot of discussion, both internally at Jane Street and with the various schools we recruit at, who see it - rightly - as bad for their students.  How can someone make a thoughtful decision about where they want to build a career without the time to interview at more than one or two places?  Unfortunately, most of this discussion is out of the public light, and so the unraveling continues.

We can't control the actions of others, but we also don’t have to follow the herd, so we'd like to be clear:

Jane Street is committed to making sure that you have the time and information you need to decide on an offer from us.  Our offer letters do have good-until dates as a matter of professional practice, but we try to work with every candidate to choose a date that works for them.  We are also happy to extend the date if something unexpected comes up, or, frankly, if someone just needs more time.

Choosing where to start your career is a big decision and we hope you have the time to make a good one.

Who Gets What and Why at the European School for Management and Technology in Berlin--video

Here's a video of a public lecture followed by a discussion (about half an hour each) about my book Who Gets What and Why, which just came out in German.   The location of the lecture was once an East German government building where the head of state had his office, and is now a business school, the European School for Management and Technology.  I was introduced by Gerhard Caspar, the head of the American Academy in Berlin and former president of Stanford. (My talk begins about minute 11:30 of the video, the discussion begins about minute 41, with Christoph von Marschall, Managing Editor of the newspaper Der Tagesspiegel, which touches on market designers in Germany, the legal barriers to kidney exchange there, and refugee resettlement.)

Compensation for donors: crowding in and crowding out, in the Washington Post

The Washington Post reports a recent study  by Dr Tom Peters surveying Americans on their willingness to donate, and how this would be effected by different levels of compensation: What would happen if Americans were paid to donate their kidneys?


"For those already willing to donate to anyone, 63 percent said that the payment would make them even more likely to do it. Of those in the second group, composed of those willing to donate to a restricted group, 60 percent said they would be more likely to consider it. And in the third group that was unwilling to donate, 26 percent said they would reconsider because of the money.

The researchers also found that there were some people who would be more reluctant to donate if money was involved. In the first group 8 percent would be less willing, 9 percent in the second group, and 18 percent in the third group.

"Thus," the researchers concluded, "payment motivated more US voters to positively consider donor nephrectomy rather than to reject the notion of donating a kidney."
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HT: Frank McCormick, Philip Held

Who Gets What and Why at Duke Law School:

It looks like Duke Law School is seriously addressing the incentives of lecture-goers to arrive on time: lunch is served on a first come first served basis...

Al Roth: Who Get's What and Why?

Wednesday, March 23, 2016 • 12:30 PM • Law School 3037Duke Law Events

Alvin E. Roth, The Craig and Susan McCaw Professor of Economics, Stanford University, and co-recipient, 2012 Nobel Memorial Prize in Economic Sciences will discuss his book, "Who Gets What - And Why: The Hidden World of Matchmaking and Market Design." A bagged lunch will be served to attendees on a first come, first serve basis. Sponsored by The Duke Project on Law and Markets. Please contact Victoria Zellefrow (victoria.zellefrow@law.duke.edu) with any further questions.

I'll also speak at the Law and Markets faculty workshop, on global kidney exchange. Kim Krawiec is the host, and here's the title of her blog post yesterday: Tomorrow Is Al Roth Day!
(You can see why I can't resist her invitation to talk...)

Steine lecture at Vanderbilt

I'll be in Nashville today, speaking at Vanderbilt, in their Steine Lecture series.

Nobel Prize-winning economist will deliver Steine Lecture March 22

Alvin Roth

Alvin E. Roth, who shared the 2012 Nobel Memorial Prize in Economics, will discuss “Who Gets What and Why: The Economics of Matching and Market Design” from 4 to 5:30 p.m. Tuesday, March 22, in Wilson Hall, Room 103. A reception will follow his talk, which is part of the Department of Economics’Steine Lecture Series.

Roth is the Craig and Susan McCaw Professor of Economics at Stanford University and the Gund Professor of Economics and Business Administration, Emeritus, at Harvard University. He works in the areas of game theory, experimental economics and market design.

Roth is responsible for re-designing the National Resident Matching Program, through which approximately 20,000 doctors a year find their first employment as residents at American hospitals. He also is one of the founders and designers of the New England Program for Kidney Exchange, which serves incompatible patient-donor pairs.

Roth is president-elect of the American Economic Association and served for many years as chair of the association’s Ad Hoc Committee on the Job Market, which has designed a number of recent changes in the market for new Ph.D. economists. He is a fellow of the American Academy of Arts and Sciences and the Econometric Society and has been a Guggenheim and Sloan fellow. He received his Ph.D. from Stanford University.

The David Steine Lectureship was established in 1978 by multiple donors to provide support for an annual lecture in the Department of Economics in the College of Arts and Science. The lecture honors former Vanderbilt professor David L. Steine and addresses an economic problem of interest to the general public.

Transplanting kidneys that are infected with hepatitis C (to uninfected patients) or HIV (to already infected patients) to ease the organ shortage

Two stories, one on Hep C kidneys to uninfected patients, another on HIV kidneys to patients already infected with HIV.

Here's the first story, on transplanting Hep C infected kidneys to patients who don't have the disease: http://www.statnews.com/2016/03/18/kidney-transplant-hepatitis-c/

"Transplant surgeons at two US hospitals are about to do something long considered taboo: put kidneys from donors with hepatitis C into recipients without the infection.

In first-in-the-world clinical trials scheduled to launch later this spring, independent teams from the University of Pennsylvania and Johns Hopkins University will take kidneys from deceased carriers of the hep C virus, put them into patients with renal failure, and then give them a 12-week course of an antiviral therapy in the hopes that they will emerge infection-free.

If successful, the trials could enable hundreds of transplants each year for patients who might otherwise die waiting for a kidney.
...
"The idea behind the two upcoming trials is to take older patients who have long waits ahead and don’t have living donors, and allow them to jump the queue — if they’re willing to take on a bit more risk.

The risk of hep C infection is deemed manageable, and ethically acceptable, thanks to the latest wave of hep C medications, which offer cure rates of 95 percent and higher.

“For a 60-year-old diabetic who doesn’t have a living donor, who hasn’t been on the wait list very long, they’re miserable on dialysis, their mortality rate is high — that person might roll the dice on this and say, ‘You know what? These drugs work, and it’s worth it to me to get off dialysis sooner,’” said Dr. Heather Morris, a nephrologist at the Columbia University Medical Center.

“Initially, we’re targeting the population that has the highest mortality risk while waiting for a transplant,” explained Dr. Christine Durand, a transplant infectious disease specialist at Johns Hopkins. But if the technique proves safe and effective, she added, organs from hep C patients might one day join the regular organ pool.

“If it was me who needed a kidney,” Durand said, “I would sign up for this.”
...
"Both the Penn and Hopkins studies are backed by Merck, the drug company that makes Zepatier, the latest hep C agent to hit the market. The company is supplying its $54,500-per-patient medicine for free and providing additional financial support for staff and lab tests.
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Here's the story about HIV kidneys:

Hahnemann to begin transplanting organs from HIV-positive donors

"The organs would be given only to patients who also are HIV-positive and have agreed to accept them. The transplants will be part of research that will carefully monitor both the transplant and the potentially deadly disease.

Johns Hopkins Hospital in Baltimore announced last month that it would be the first to offer HIV-positive organs to HIV-positive patients on its waiting list. The advantage of such transplants is that they might reduce waiting times for HIV-positive patients and also free up other organs for patients who don't have the immune-weakening virus.

The new approach was made possible by the HIV Organ Policy Equity (HOPE) Act of 2013. Before that, it was illegal to transplant organs from people with HIV. The ban was enacted when the blood-borne virus was considered a death sentence, but now that it is so much more manageable, people who are infected often die of something else.

The Philadelphia hospital has now received permission from the United Network for Organ Sharing (UNOS) to begin what are called HIV-positive to HIV-positive liver and kidney transplants. Doctors expect that most of the transplanted organs will be kidneys and that the first case will occur this year. The hospital currently has 45 HIV-positive patients either on its waiting list for kidneys or being evaluated for transplants."

Rabbi (and kidney donor)i Shmuly Yanklowitz on Judaism and organ donation (video)

Rabbi (and kidney donor) Shmuly Yanklowitz speaks about organ donation, drawing on Jewish sources, in this 14 minute video:

HT: Max Bazerman 

Stable marriage without the deferred acceptance algorithm

WuMoby Wulff & Morgenthaler

• March 12, 2016

HT: James J. O'Donnell, MD.

Match Day for new doctors

Today is Match Day, when graduating medical students find out where they will do their residency.

MAR18

Match Day!

Applicants: Medical school Match Day ceremonies at 12:00 p.m. ET. Learn where you matched in the R3 system and by email at 1:00 p.m. ET.

Programs: Match Results by Ranked Applicant and SOAP Results by Preferred Applicant reports available at 2:00 p.m. ET.

Advance Data Tables available on www.nrmp.org at 1:00 p.m. ET.

Here's an earlier WSJ story by a graduating doctor:
Match Day, the NFL Draft of Medicine
On March 18, thousands of budding doctors find out where they’ll be serving their residencies.
"As you can imagine, it is a day of high anxiety, celebration and disappointment. My classmates and I have spent the past year choosing specialties, filling out applications and interviewing with residency programs. This process has taken us to cities, hospitals and universities around the country. After years of study, we’re about to become physicians. Both our professional and personal lives hinge on the results of this algorithm.

The Match was introduced in 1952 to address many of the uncertainties of residency applications. Before, medical students had to seek residency spots by themselves. But this decentralized system was rife with coercion, favoritism and deceit. Residency programs would demand medical students accept offers before applicants could consider other options. Students and programs betrayed one another by reneging on commitments.

The Match provides structure to the process. Students apply for residency positions through a common application. Strict policies govern communication between programs and applicants, with public reporting of violations. Applicants and programs submit ranking preferences into a centralized system. The Match algorithm couples these rankings and establishes binding contracts for residency positions.

Last year saw record numbers, when nearly 35,000 applicants submitted ranking preferences for roughly 30,000 residency slots. Medical schools host ceremonies to celebrate the event. Researchers Alvin Roth and Lloyd Shapley even won the 2012 Nobel Prize in Economics for their work related to the Match."
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Here's the NRMP page on why it takes 23 days from the time preferences are submitted to announce the match results

What Happens Between Rank Order List Deadline And Match Day?

Between the Rank Order List Certification Deadline and Match Day, the NRMP conducts a rigorous review of Match data, including:

• Assessing and confirming the integrity of the data
• Conducting a final verification of applicants’ credentials
• Withdrawing applicants who are ineligible for the Match
• Transferring the data from the R3 system to the matching algorithm module, rechecking the data, processing the algorithm, and transferring data back into the R3 system
• Verifying the results of a Match and transferring the data into the NRMP databases
• Verifying applicants’ credentials for Main Residency Match SOAP participation
• Preparing 50,000 individual Match Week reports for Main Residency Match applicants, program directors, and medical schools

These steps, all completed in a few weeks, ensure the accuracy of Match results.

Here's a story on the SOAP scramble for unmatched students:https://www.statnews.com/2016/03/17/medical-students-match-day/ 

Transplants in Germany, further discussion of changing the transplant law, in Der Tagesspiegel

My op-ed in Der  Tagesspiegel yesterday on changing the German transplant law has drawn some prompt further comment in today's paper (as near as I can tell from Google Translate).

Here's the new commentary (English courtesy of GT):

Ärzte und Politiker für mehr Lebendspenden

Deutsche Vorbehalte „passen nicht mehr in die Zeit“, kritisieren Mediziner. Auch der Austausch zwischen einander unbekannten Paaren sollte erlaubt werden. 

VON RAINER WORATSCHKA

[Organ transplant

physicians and politicians for more living donations German reservations "no longer fit into the time", criticizing physicians. The exchange between unacquainted pairs should be allowed.]

"The demand of the American Nobel Prize winner Alvin Roth, to facilitate in Germany living donation of organs and to amend the Transplantation Act accordingly, has met with doctors and politicians on consent.

The requirement that living donation - this question come kidney or parts of the liver - may come only from the direct family environment, are too strict, the economists had in Tagesspiegel criticizes. As in other European countries and the United States would also in Germany more distant relatives, friends or colleagues may donate writes Roth. In addition, an exchange between unacquainted pairs should be allowed (cross-donation, crossover Donation) at incompatible donor organs."

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Here are my two earlier posts on the subject, with links to my earlier op-ed and the one by Axel Ockenfels and Thomas Gutmann

German organ transplant law should be amended or reinterpreted to allow kidney exchange: my op-ed in Der Tagesspiegel

Promoting kidney exchange in Germany: Axel Ockenfels and Thomas Gutmann

German organ transplant law should be amended or reinterpreted to allow kidney exchange: my op-ed in Der Tagesspiegel

During my recent visit to Germany, I spoke with a number of people about the fact that the German transplant law effectively outlaws kidney exchange.  I was invited to write an op-ed on the subject for the German newspaper Der Tagesspiegel, and it has just appeared:

OrganspendenDeutschland muss sein Transplantationsgesetz ändern

In den USA können Patient-Spender-Paare untereinander ein Organ spenden, in Deutschland ist dieser Tausch verboten. Das muss sich ändern. Eine Position. 

ALVIN E. ROTH

Normally at this point I would use Google Translate to give a sense of the article, but in this case, since I wrote the op-ed in English, I can give you the original:

German organ transplant law should be amended or reinterpreted to allow kidney exchange

By Alvin E. Roth[i]

Kidney failure is epidemic around the world, and a shortage of organs for transplantation condemns many patients to dialysis, and early death. 

Most transplantable organs come from deceased donors, and there aren’t enough to fill the need. But because healthy people have two kidneys and can remain healthy with one, a healthy person can donate a kidney to a sick person.  A living-donor kidney works better than a deceased-donor kidney.

In the U.S. we now have around as many living donors as deceased donors (although we still have more deceased-donor transplants, since a deceased donor donates both kidneys).

But living donation isn’t always possible, even when a willing donor is available, because a kidney must be well-matched to its recipient. Often the life-saving gift cannot be given, because the donor’s kidney is incompatible with the patient. (It is now sometimes possible to successfully transplant an incompatible kidney, but, like a deceased-donor kidney, this does not keep the patient as healthy for as long as would a compatible living-donor kidney.)

In the U.S., there is a way for incompatible patient-donor pairs to help each other, through what we call kidney exchange, or kidney paired-donation. In its simplest form, two incompatible patient-donor pairs are identified by their doctors such that each patient is compatible with the kidney of the other patient’s donor. Then four surgeries are performed, two nephrectomies and two transplants, so that each donor gives a kidney and each patient receives a compatible kidney. Kidney exchange has become a standard form of transplantation in the U.S., and has saved thousands of lives. (This is one of the “matching” markets I helped design, and wrote about in my recently translated book, Wer kriegt was - und warum?.)

Notice that no money changes hands in this paired donation. It is just an exchange of gifts between two patient-donor pairs, which allows each donor to save a life and see his intended recipient restored to good health.

Laws around the world prohibit buying a kidney for transplantation, because of fear that allowing organs to be sold would exploit the poor and vulnerable. (The single exception is Iran, which has a monetary market for kidneys.) But German transplant law  imposes a severe further restriction: a patient may receive a living-donor kidney only from a member of his or her immediate family. This means that, unless a judge intervenes, kidney exchanges are illegal in Germany. (This law also restricts the number of direct living donations in Germany compared to countries like the U.S., in which uncles, cousins, friends, colleagues, members of the same church, etc., are often living donors.)

I surmise that the reason for this strict limitation in German law is to remove any possibility that a kidney being transplanted has been purchased rather than freely given. But if when you want to give a kidney to your brother there is no suspicion that you are a paid organ-seller, you should remain above suspicion even if your kidney is incompatible with your brother. Kidney exchange allows you to give a kidney and save a life, and have your brother’s life saved. Kidney paired donation is a mutually beneficial exchange of life-saving gifts, not a commercial transaction.

The U.S. law that includes the prohibition on organ sales is the National Organ Transplant Act of 1984.  When American surgeons explored kidney exchange in the first decade of this century, it wasn’t initially clear what its legal status might be, but in 2007 Congress passed an amendment to the NOTA making kidney exchange explicitly legal.  Kidney exchange is legal elsewhere in Europe, and is well developed in the Netherlands and Britain. A similar amendment to the German law, or even instructions to judges that kidney exchanges should be allowed after being examined, could save the lives of many patients in Germany, without opening to door to commercial transactions in body parts.

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[i] Alvin Roth, a professor of economics at Stanford University, shared the 2012 Nobel Prize in Economics for his work on market design. His recent book about markets has just appeared in German translation, Wer kriegt was - und warum?: Bildung, Jobs und Partnerwahl: Wie Märktefunktionieren

Slides from the American Society of Transplantation CEOT meetings

Many of the slides from the recent meeting of the American Society of Transplantation meeting in Phoenix are now available by clicking on the talk titles here: http://2016.ceot.myast.org/ceot-2016-program

Here is the session I spoke in

Session 4, Part 1:  Removing Disincentives and Exploring Controversies of Incentives Co-Moderators: Robert S. Gaston, MD, FAST, University of Alabama at Birmingham, and Larry B. Melton, MD, PhD, FAST, Dallas Nephrology Associates
11:00 am	World and Historical Perspectives John Gill, MD, MS, FAST, The University of British Columbia
11:30 am	Undue Incentives and Repugnant Transactions: One Economist’s Perspective Alvin Roth, PhD, Stanford University Nobel Laureate
12:00 pm	Bioethical Perspectives on Incentivizing Organ Donation and the Impact of NOTA on Pilot Projects I. Glenn Cohen, JD, Harvard Law School
12:30 pm	What is an Incentive and a Critical Appraisal of Possible Pilot Trials of Incentives in Organ Donation? Robert S. Gaston, MD, FAST, University of Alabama at Birmingham and

Lloyd Shapley: obituaries, and memories

I've been asked to write a short "intellectual obituary" about Lloyd's work, which I'll try to do in the coming days.  In the meantime, here's a paragraph:

Lloyd Shapley was one of the founding giants of game theory. He shared the 2012 Nobel Prize in Economics for his seminal work with David Gale on stable matching, but he could have won a Nobel for any of a number of his papers that initiated whole literatures: he was one of the very first to formulate and study the core of a game, he and John Milnor initiated the study of games with a continuum of players (“Oceanic Games”), he invented the Shapley value, he and Martin Shubik showed how it could be useful in studying voting and political processes, and his paper on Stochastic Games initiated the study of Markov Decision Processes as well as Markov Games. 

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Below, links to some obituaries:


The Economist: Matchmaker in heaven--Lloyd Shapley, a Nobel laureate in economics, has died

"One of Mr Shapley’s better-known achievements is the Gale-Shapley matching algorithm, which he devised after an old university friend (David Gale) asked for help to solve a problem. Given two groups of people, each with slightly different preferences, is there a way to match them in such a way that people aren’t constantly ditching their partner? After much head-scratching, Mr Gale suspected there was no solution, but could not prove it. As Mr Shapley told it, the solution took him the best part of an afternoon. "

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UCLA: UCLA mourns the passing of Nobel laureate Lloyd Shapley, 92. Shapley, widely considered a father of game theory, was professor emeritus of economics and mathematics
"Shapley was widely considered one of the fathers of game theory. His research focused on both cooperative and non-cooperative game theory, in fields including stochastic games, strategic market games, assignment games, cooperative and non-cooperative market models, voting games and power indices, potential games, cost allocation and organization theory. His work included the development of the “Shapley value” and the “core.”

“Professor Shapley was one of the giants of game theory,” said UCLA Chancellor Gene Block. “His work in market design laid the foundation for advances in the matching of kidney donors with transplant recipients, in college admissions procedures, and in assignment of children to public schools. The entire UCLA community joins Professor Shapley’s family in mourning his passing.”

In their 1962 paper, “College admissions and the stability of marriage,” Shapley and mathematician/economist David Gale demonstrated how to match members of two groups — for example, men and women in a “marriage market” — in a way that is stable."

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The NY Times: Lloyd S. Shapley, 92, Nobel Laureate and a Father of Game Theory, Is Dead
By BARRY MEIERMARCH 14, 2016

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The Rand Corp. press release: Lloyd S. Shapley, Nobel Laureate in Economics, Dies at 92
"He was a research mathematician at RAND from 1948 to 1950 and from 1954 to 1981. He also taught “Game Theory and Applications” in the 1970s and early 1980s at what is now the Pardee RAND Graduate School, which awarded him an honorary degree in 2014."
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The Associated Press obit: Nobel laureate Lloyd S. Shapley dies at 92 in Arizona

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Here's a short video in which I was interviewed about my first meeting with Shapley:



I also wrote very briefly about that first meeting in the autobiographical essay I prepared for the Nobel:

"As I prepared to leave California for Illinois, I paid a visit to Lloyd Shapley at the Rand Corporation in Santa Monica to tell him about my work. I recall a pleasant visit, in which he correctly conjectured how the proof of my fixed point theorem worked, and (if I recall correctly) ended with him driving me to the airport in his station wagon. "

Promoting kidney exchange in Germany: Axel Ockenfels and Thomas Gutmann

In Germany, kidney exchange isn't legal (German law only permits a patient to receive an organ from a member of his immediate family). Here's an op-ed saying that should change, by Axel Ockenfels and Thomas Gutmann in the Sueddeutsche Zeitung:

Nierentausch in Zeiten des Mangels (kidney exchange in times of shortage)

Google translate makes it pretty clear.

The market for photographs: "Man - 60 years and older"

Photographs for sale can be either of specific individuals or "stock photos" of generic images. Here's a picture of me that seems to be both, judging from the keywords the photographer or seller, Richard Kalvar at Magnum Photos, has assigned to it (such as "Man - 60 years and older"):

Keywords: Davos–International conference–American (nationality)–Davos
–Keedup QC–Man - 60 years and older–One Person–Portrait–Professor–ROTH Alvin

Lloyd S. Shapley 1923- 2016

I turned on my phone after landing from Frankfurt, and found an email from Lloyd's son Peter Shapley, saying that Lloyd passed away in his sleep at around 12:45 AM today, March 12.

The world is the less...



Update: see some obituaries here-- Lloyd Shapley: obituaries, and memories

Cass Sunstein for Chair of the President's Council of Psychological Advisors

The Council of Psychological Advisers

Cass R. Sunstein 

Harvard Law School
January 2016

Annual Review of Psychology, Vol. 67, pp. 713-737, 2016 
Abstract:      

Findings in behavioral science, including psychology, have influenced policies and reforms in many nations. Choice architecture can affect outcomes even if material incentives are not involved. In some contexts, default rules, simplification, and social norms have had even larger effects than significant economic incentives. Psychological research is helping to inform initiatives in savings, finance, highway safety, consumer protection, energy, climate change, obesity, education, poverty, development, crime, corruption, health, and the environment. No nation has yet created a council of psychological advisers, but the role of behavioral research in policy domains is likely to grow in the coming years, especially in light of the mounting interest in promoting ease and simplification (“navigability”); in increasing effectiveness, economic growth, and competitiveness; and in providing low-cost, choice-preserving approaches.

German press coverage

One of the themes that has struck a chord with the German press during my visit is that refugee resettlement is a matching problem:

Handelsblatt „Die Flüchtlingskrise ist ein Matching-Problem“ ("The refugee crisis is a matching problem")

Die Welt "Staaten sollten Gebote für Flüchtlinge abgeben"
From google translate:

From because of cooler economist - Alvin Roth has indeed studied hard subjects with mathematics and computer science. But he loves not only the numbers, but also the people. It shows the same. He greeted with a winning smile, leaving a to an exciting conversation about refugees and donor kidneys, financial markets and future presidents.

The World: Some economists want to apply to the distribution of refugees in Europe your design markets. Is this a good idea?

Photo: JONATHAN NACKSTRAND / AFP / Getty ImagesStanford Professor Alvin Roth

Alvin Roth: Essentially, yes. The distribution of refugees is a so-called matching market - on the right pairing it depends, in this case of people and place. The people themselves have preferences where they want to live. At the same time they should be able to be easily integrated into the economy. For that we should allow an orderly exchange of information. According Dublin procedure an applicant must his application but ask in the country where he first arrived. This does not add up.

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