Paul Romer thinking about market design via urban planning, at Burning Man

The NY Times has the story:

A Nobel-Winning Economist Goes to Burning Man
Amid the desert orgies, Paul Romer investigates a provocative question: Is this bacchanal a model of urban planning?
By Emily Badger

"White-haired and 63, he was dressed in black gear he’d bought at R.E.I., figuring black was the thing to wear at Burning Man. It was the first time that Mr. Romer, the former chief economist of the World Bank, had attended the annual bacchanal.
...
"Urbanization in the developed world has largely come to an end; nearly everyone who would move from farmland toward cities already has. This century, the same mass migration will run its course across the rest of the world. And if no one prepares for it — if we leave it to developers to claim one field at a time, or to migrants to make their way with no structure — it will be nearly impossible to superimpose some order later.

"It will take vast expense, and sweeping acts of eminent domain, to create arterial roads, bus service, trash routes, public parks, basic connectivity.

"That prospect agitates Mr. Romer, because the power of cities to lift people out of poverty dissipates when cities don’t work. To economists, cities are labor markets. And labor markets can’t function when there are no roads leading workers out of their favelas, or when would-be inventors never meet because they live in gridlock."

History job market conference interviews are history

Inside Higher Ed has the story on the history job market (which they conflate with the AEA's recent decision to try to eliminate interviews in hotel rooms):

Killing the Conference Interview
American Historical Association ends annual meeting interviews and American Economic Association ends single hotel room interviews.
By Colleen Flaherty

"It's official: the American Historical Association will stop supporting first-round job interviews at its annual meeting.

"The group floated the idea this spring, citing a decline in registered departmental searches -- from 270 for the 2005 conference to 20 this year -- and a desire to take the meeting in new directions.

"After hearing overwhelming positive feedback from members, the AHA Council voted to end the 70-year-old tradition."

*************

I'm not intimately familiar with the History job market, but for economists, I think the tradition of interviewing at the January meetings has had a good effect on the job market, helping to coordinate timings, reduce costs, and provide a thick early part of the market.  I hope that we won't be starting on the road to moving interviews elsewhere and (particularly) at earlier and more diffuse times.

The Department of Justice opposes limits on early admissions, and other admissions agreements among colleges

Forbes has the story:

The Department Of Justice Aims To Unravel The College Admission Market
 Brennan Barnard

"Thanks to a two-year, ongoing investigation by the Antitrust Division of the United States Department of Justice (DOJ), the wheels are about to come off in college admission. As the National Association for College Admission Counseling (NACAC) prepares to meet later this month for their annual conference, the leadership reached out to members last week about proposed changes to the Association’s Code of Ethics and Professional Practice (CEPP). These potential amendments are a direct result of fruitless conversations with the DOJ, which have left NACAC with few options.
...
"Specifically the DOJ has taken issue with ethical guidelines that prevent colleges from “offering exclusive incentives for Early Decision, recruiting first-year undergraduates who have committed elsewhere, and recruiting transfer students.”
**********

Regarding early admissions, the DOJ wants colleges to be able to compete more vigorously through early admissions, e.g. by offering special access to dormitories, or other perks to students who commit early.  It will be interesting to see where this leads, but it could easily lead to more unraveling of admissions, making more admissions decisions earlier.

Here's the relevant page from NACAC, the National Association for College Admissions Counseling:

2019 Assembly Meeting Background
NACAC’s Code of Ethics and Professional Practices and Antitrust Provisions
Kentucky International Convention Center
Saturday, September 28, 2019

West Point: adopts two sided matching for cadets to military branches

From the Army Times (the links in the story are worth clicking on for related detail):

West Point has changed how cadets are assigned branches — ROTC will soon follow

"West Point’s class of 2020 will serve as the first users of a new branch assignment system this fall, which the Army hopes will help with the retention of junior officers and better assign talent.

The Army is rolling out a new “Market Model branching system" that takes input from the commandants of each branch, who rank cadets as “most preferred,” “preferred” or “least preferred,” according to an Army news posting.

The number of cadets allocated into each of the three ranks depends on the branch’s needs.

The program starts with West Point cadets receiving their branch assignments this November, but will eventually be used across the service’s Reserve Officer Training Corps detachments next year.

Cadets will be judged based on a range of factors, including test scores, physical fitness scores, transcripts, personal statements and, for the first time, interviews with the branches they’re interested in.

Rankings and preferences will decide branch assignments using a variant of the same algorithm that medical school graduates use to be assigned to residency programs across the country.

This is the first time commandants from the Army’s 17 branches will have a say in which cadets come into their branches, the service said in its announcement. Previously, cadets simply ranked the branches in order of preference and received their assignment “based almost entirely on their ranking in the Order of Merit List," the Army’s posting reads.

The Army release also notes that the process allows for cadets to take on a Branch of Choice Active Duty Service Obligation, or BRADSO. This allows for West Point graduates to serve an extra three years on top of five they’re already obligated to serve in exchange for increasing the odds that the cadet will receive the branch they most desire.

BRADSO doesn’t change how well the branch commandant ranks a cadet, but it does move cadets within their own ranking.

“If you’re cadet number 25 in that most preferred bucket, and I’m cadet number 45 and I’m willing to BRADSO and you’re not, I move above you,” Maj. Jared Sunsdahl, West Point’s accessions division chief, said in the Army posting. “Now, 45 is above 25 and then depending on how many branch allocations there are, you may not have received that branch because there were only so many allocations left.”

Therefore, it won’t take a cadet from being “preferred” by the branch commandant to being “most preferred,” but it will increase their odds against other “preferred” cadets.

West Point’s class of 2020 will lock in their final branch rankings between Sept. 23-29. Branch commandants have to lock in their rankings by Sept. 19."

**********

HT: Tobias Switzer

Platform Markets at the Simons Institute this week (Sept 16-19)

Here's the workshop schedule:

Platform Markets Sep. 16 – Sep. 19, 2019

Monday, September 16th, 2019
1:20 pm – 1:30 pm Opening Remarks
1:30 pm – 2:15 pm Computational Complexity of Matching in Ride Sharing
Amin Saberi (Stanford University & Uber)
2:15 pm – 3:00 pm TBD Michael Schwarz (Microsoft)
3:00 pm – 3:30 pm Break
3:30 pm – 4:15 pm Driving Efficiencies in the Freight Industry Max Schmeiser (Convoy)
4:15 pm – 5:15 pm Ridesharing Panel Kane Sweeney (Uber), Hamid Nazerzadeh (Uber & USC), Chris Sholley (Lyft), Michael Ostrovsky (Stanford University), Moderated by Michael Schwarz (Microsoft)
5:15 pm – 6:15 pm Reception

Tuesday, September 17th, 2019
8:30 am – 9:00 am Coffee and Check-In
9:00 am – 9:45 am The Economics of the Bitcoin Payment System Jacob Leshno (University of Chicago)
9:45 am – 10:30 am  Marketplaces and Product Quality  Susan Athey (Stanford University)
10:30 am – 11:00 am Break
11:00 am – 11:45 am Redesigning the Kidney Exchange Market Itai Ashlagi (Stanford University)
11:45 am – 12:30 pm Consumer Protection in an Online World: An Analysis of Occupational Licensing Chiara Farronato (Harvard Business School)
12:30 pm – 2:30 pm  Lunch
2:30 pm – 3:15 pm  Ratings Design and Barriers to Entry  Nikhil Vellodi (Paris School of Economics & Princeton University)
3:15 pm – 3:45 pm Break
3:45 pm – 4:30 pm Steering in Online Markets: The Role of Platform Incentives and Credibility John Horton (MIT)

Wednesday, September 18th, 2019
8:30 am – 9:00 am Coffee and Check-In
9:00 am – 9:45 am Stochastic Matching with Few Queries Mohammad Hajiaghayi (University of Maryland)
9:45 am – 10:30 am Incentivizing Exploration among Behavioral Agents with Unbiased Histories  Nicole Immorlica (Microsoft Research)
10:30 am – 11:00 am Break
11:00 am – 11:45 am Clearing Matching Markets Efficiently: Informative signals and Match Recommendations  Peng Shi (University of Southern California)
11:45 am – 12:30 pm The Unreasonable Effectiveness of Artificial Currencies  Sid Banerjee (Cornell University)
12:30 pm – 2:30 pm Lunch
2:30 pm – 3:15 pm Matching Algorithms for Blood Donation  John Dickerson (University of Maryland)
3:15 pm – 3:45 pm Break
3:45 pm – 4:30 pm Optimal Growth in Two-Sided Markets  Garret Van Ryzin (Cornell Tech)

Thursday, September 19th, 2019
9:00 am – 9:30 am Coffee and Check-In
9:30 am – 10:15 am  Matching Markets: Managing Scale and Accuracy  Nicolas Stier-Moses (Facebook Core Data Science)
10:15 am – 11:00 am TBD Peter Coles (Airbnb)
11:00 am – 11:30 am Break
11:30 am – 12:30 pm Platforms and Marketplaces: Past Lessons and Future Possibilities  Simon Rothman (Greylock Partners), Interviewed by Steve Tadelis (UC Berkeley)

The common app: reduced friction and increased congestion by Knight and Schiff

Reducing Frictions in College Admissions: Evidence from the Common Application

Brian G. Knight, Nathan M. Schiff

NBER Working Paper No. 26151
Issued in August 2019

Abstract: "College admissions in the U.S. is decentralized, with students applying separately to each school. This creates frictions in the college admissions process and, if substantial, might ultimately limit student choice. In this paper, we study the introduction of the Common Application (CA) platform, under which students submit a single application to all member schools, potentially reducing frictions and increasing student choice. We first document that joining the CA increases the number of applications received by schools, consistent with reduced frictions. Joining the CA also reduces the yield on accepted students, consistent with increased student choice, and institutions respond to the reduced yield by admitting more students. In line with these findings, we document that the CA has accelerated geographic integration: upon joining, schools attract more foreign students and more out-of-state students, especially from other states with significant CA membership, consistent with network effects. Finally, we find some evidence that joining the CA increases freshmen SAT scores. If so, and given that CA members tend to be more selective institutions, the CA has contributed to stratification, the widening gap between more selective and less selective schools."

"The CA began with just 15 colleges in 1975 but grew rapidly thereafter, with increases in member-ship in every year since 1975 and a significant acceleration of membership starting around 2000(Figure 1). It currently includes over 700 institutions, which, taken together, receive approximately4 million applications from 1 million students annually."

Game theory in the Handelsblatt

The German newspaper Handelsblatt has a game theory column: SPIELTHEORIE-KOLUMNE

The article at the link is about matching markets, including a recent application to daycare in Mannheim.  Here's the headline:

Wie Ökonomie Systeme effizienter macht – und sogar der eigenen Gefühlslage hilft

And here's Google translate:

"How economics makes systems more efficient - and even helps one's own emotional state"

Emanuel and Fuchs on health care in the NYT"

Here it is (four, because six would be too confusing...)

Four Key Things You Should Know About Health Care 
By Ezekiel J. Emanuel and Victor R. Fuchs
Sept. 12, 2019

"Fallacy No. 1: Employers pay for employees’ health insurance.
...
"Fallacy No. 2: Medicare for All is unaffordable.
...
"Fallacy No. 3: Insurance companies’ profits drive health care costs.
...
"Fallacy No. 4: Price transparency can bring down health care costs."

Surrogacy among religious Jews in Israel

Surrogacy law is not entirely simple in Israel (e.g. the intended parents must be a heterosexual married couple), but it appears that there isn't a religious barrier.  Here's a story in the Jerudalem Post of a religious woman who was a commercial surrogate for a religious couple:

BREAKING THE STIGMA OF SURROGACY... among the religious
BY GADI DEUTSCH

"How did this become more popular among religious women?
“It was after the Carmel Forest fire disaster. One of the people who died was 16-year-old Elad Riban, who’d been an only child. His mother wanted to have another child to help her overcome her trauma, and a married friend of hers agreed to serve as a surrogate, for no fee.

“So they approached Rabbi Shlomo Amar, who said that through a ruling that had been made by Rabbi Ovadia Yosef, they’d found a way to allow it. Once this was allowed for one baby, that set a precedent for others. In other words, not only was there no concern of the baby having mamzer status [an illigitemate child] according to Jewish law, but it was officially allowed. The Puah Institute has also officially allowed married women to act as surrogates. Another advantage for surrogates being married is that they can receive support from their spouses throughout the pregnancy and birth.”
***********

Here's a related earlier post:

Sunday, March 9, 2014  Surrogacy law in Israel

Golden Goose Awards 2019

The Golden Goose Awards have been awarded for the 8th time. 

Here's an accompanying news story:

2019's Golden Goose Awards Celebrate The Silliest-Sounding Science To Benefit Society

Behavioral and Experimental Economics Workshop at Lancaster, Sept 10

Here's the announcement for the Sept 10 part of the program at Lancaster, connected with the celebration of Eyal Winter's chair there:

Behavioral and Experimental Economics Workshop 
Organized by the Lancaster Experimental Economics Laboratory (LExEL)
9th-10th September 2019

Click here to see the programme for more information

Yesterday I attended a workshop on school choice. Both workshops are indicative of lots of constructive developments at the Lancaster University Management School, as is this photo I snapped:

Evaluating school choice in Chicago isn't simple

The effects of school choice don't just depend on what school you go to, but also on what other school you could have gone to...

Choice and Consequence: Assessing Mismatch at Chicago Exam Schools

Joshua D. Angrist, Parag A. Pathak, Román Andrés Zárate

NBER Working Paper No. 26137
Issued in August 2019
NBER Program(s):Economics of Education, Labor Studies, Public Economics 

The educational mismatch hypothesis asserts that students are hurt by affirmative action policies that place them in selective schools for which they wouldn't otherwise qualify. We evaluate mismatch in Chicago's selective public exam schools, which admit students using neighborhood-based diversity criteria as well as test scores. Regression discontinuity estimates for applicants favored by affirmative action indeed show no gains in reading and negative effects of exam school attendance on math scores. But these results are similar for more- and less-selective schools and for applicants unlikely to benefit from affirmative-action, a pattern inconsistent with mismatch. We show that Chicago exam school effects are explained by the schools attended by applicants who are not offered an exam school seat. Specifically, mismatch arises because exam school admission diverts many applicants from high-performing Noble Network charter schools, where they would have done well. Consistent with these findings, exam schools reduce Math scores for applicants applying from charter schools in another large urban district. Exam school applicants' previous achievement, race, and other characteristics that are sometimes said to mediate student-school matching play no role in this story.

Andrews and Brunner Lecture at Lancaster University

Here's an announcement.
"Alvin Roth will deliver the inaugural Andrews and Brunner Lecture at Lancaster University on Monday, September 9."

Here's another:

"The Department of Economics is delighted to welcome Nobel Prize winner, Professor Alvin Roth to deliver the inaugural Andrews and Brunner Lecture.

...

Controversial Markets

Markets need social support to work well. Do bans on the marketisation of certain products work? Without sufficient social support, bans can be ineffective and can sometimes lead to active black markets. Roth will describe some examples of how these tensions have played out, for example, for markets for surrogacy, prostitution, and drugs. A particular example will be the almost (but not quite) universal ban on monetary markets for kidneys, and how this has influenced the treatment of kidney disease and the organisation of kidney transplantation around the world, including the development of kidney exchange.

Event Programme

6:00pm - Lecture

7:15 pm - Networking Reception

8:15pm - Close

Refreshments will be available at this event.

This inaugural lecture commemorates PWS Andrews and Elizabeth Brunner, two leading figures who significantly contributed to the success of the Economics Department from 1967 to 1983. Both Andrews and Brunner supported the nascent University’s growing reputation in Economics. They are fondly remembered by former students who benefited from their teaching.

Distinguished academic Professor Eyal Winter is the PWS Andrews & Elizabeth Brunner Chair in Industrial Economics at Lancaster University. An academic of Professor Winter’s calibre is an outstanding addition to the School, enabling us to continue the very highest levels of research, teaching and engagement.

**************

My talk will follow a Symposium on School Choice:

DNA tests are revealing medical misconduct in early sperm donation

The NY Times has the story, summarizing many recently discovered cases in which fertility doctors used their own sperm in place of other sperm donors:

Their Mothers Chose Donor Sperm. The Doctors Used Their Own.
Scores of people born through artificial insemination have learned from DNA tests that their biological fathers were the doctors who performed the procedure.

"With the advent of widespread consumer DNA testing, instances in which fertility specialists decades ago secretly used their own sperm for artificial insemination have begun to surface with some regularity. Three states have now passed laws criminalizing this conduct, including Texas, which now defines it as a form of sexual assault.

"Dr. Jody Madeira, a law professor at Indiana University, is following more than 20 cases in the United States and abroad. They have occurred in a dozen states, including Connecticut, Vermont, Idaho, Utah and Nevada, she said, as well as in England, South Africa, Germany and the Netherlands."
**********

There's an old saying that good judgement comes from experience, and experience comes from bad judgement.  The same thing might be said about well regulated markets...

New York City considers bill to ban foie gras

Bill aims to ban sale of foie gras in New York restaurants over 'cruel' process
If bill passes, anyone violating the law could be liable to a $1,000 fine, up to a year in jail or both

"New York City council is considering outlawing the product – which derives from duck or goose and translates as “fatty liver” – which is a staple at many of its top restaurants.

"Critics of foie gras say the process is cruel because ducks and geese are overfed through a pipe which can expand the liver up to 10 times its normal size.

The proposed bill, which could be voted on in months, would ban the sale of foie gras made from birds that have " force fed and establishments from serving it.
...
"If New York introduces a ban it will put the city alongside California, which has a state-wide ban on the production and sale of foie gras. Chicago passed a ban in 2006, but it was overturned two years later.

"Whole Foods banned its sale in 1997 and Postmates ended deliveries of it last year.

"Outside the US, Britain, Israel and India all have bans on sale or production."
***********

For a different view, French law (Code rural) states
"Article L654-27-1
Créé par Loi n°2006-11 du 5 janvier 2006 - art. 74 JORF 6 janvier 2006
Le foie gras fait partie du patrimoine culturel et gastronomique protégé en France. On entend par foie gras, le foie d'un canard ou d'une oie spécialement engraissé par gavage."

Google translate: "Foie gras is part of the cultural and gastronomic heritage protected in France. By foie gras, the liver of a duck or a goose specially fattened by gavage."

Economic Science Association meeting in Dijon, Sept 5-7

I'm travelling today to join the ongoing 2019 European ESA Meeting in Dijon, France.  Here's the program.

I'm going to speak on Saturday about Controversial Markets.

I'll also participate in a round table discussion on repugnant markets:
LE PRIX NOBEL D'ÉCONOMIE ALVIN ROTH À BSB
European Meeting de l’ESA du 4 au 8 septembre 2019, table-ronde "répugnante" le 7 septembre

"Le samedi 7 septembre à 14h, il participera à une table-ronde sur le thème "Triche, engagement et marchés répugnants", en compagnie de Martin Kocher, Directeur scientifique de l’Institut des Hautes Etudes de Vienne (Autriche), et Nicolas Jacquemet, Professeur à Paris School of Economics. Les échanges seront animés par Thibault Lieurade, journaliste, Chef de rubrique Economie + Entreprise à The Conversation France."

Marty Weitzman, 1942-2019

For many years, Marty and I both had offices on the third floor of the Littauer building at Harvard.  I didn't know him well, but he was a big thinker,  who thought unflinchingly about the tail-end dangers of climate change.

His obit in the NY Times suggests that he was despondent about the future.

Martin Weitzman, Virtuoso Climate Change Economist, Dies at 77
A pathfinder in environmental economics who insisted on factoring in the worst-case scenarios of global warming

"In “Climate Shock: The Economic Consequences of a Hotter Planet” (2015), Professor Weitzman and his co-author, Gernot Wagner, an economist at New York University, wrote: “One thing we know for sure is that a greater than 10 percent chance of the earth’s eventual warming of 11 degrees Fahrenheit or more — the end of the human adventure on this planet as we now know it — is too high. And that’s the path the planet is on at the moment.”

“Most everything we know tells us climate change is bad,” the authors concluded. “Most everything we don’t know tells us it’s probably much worse.”

"His analysis of the economics of climate change became known as the Dismal Theorem."

*************
Update: here's the Washington Post's obit:


Martin Weitzman, environmental economist who emphasized uncertainty, dies at 77

Two market design courses at Harvard this semester, by Kominers, and by Akbarpour and Li

If you are at Harvard this semester, you have two market design classes available:

Mohammad Akbarpour (visiting for the quarter from Stanford) and Shengwu Li will be teaching
SIMPLICITY & COMPLEXITY IN ECONOMICS
Fall 2019 T/Th 9 :00-10:15, ECON 2071

and Scott Kominers will again be teaching
ECON 2099, "Market Design"  

Efficiency and Stability in Large Matching Markets, by Che and Tercieux in the JPE

Efficiency and Stability in Large Matching Markets

Yeon-Koo Che

Columbia University

Olivier Tercieux

Paris School of Economics and Centre National de la Recherche Scientifique

ONLINE: Aug 30, 2019

Abstract

We study efficient and stable mechanisms in matching markets when the number of agents is large and individuals’ preferences and priorities are drawn randomly. When agents’ preferences are uncorrelated, then both efficiency and stability can be achieved in an asymptotic sense via standard mechanisms such as deferred acceptance and top trading cycles. When agents’ preferences are correlated over objects, however, these mechanisms are either inefficient or unstable, even in an asymptotic sense. We propose a variant of deferred acceptance that is asymptotically efficient, asymptotically stable, and asymptotically incentive compatible. This new mechanism performs well in a counterfactual calibration based on New York City school choice data.

"...we develop a new mechanism, called DA with circuit breaker (DACB), that is both asymptotically efficient and asymptotically stable. This mechanism modifies DA to prevent participants from competing excessively. Specifically, all agents are ordered in some manner (for instance, at random), and following that order, each agent applies one at a time to the best object that has not yet rejected him.5 The proposed object then accepts or rejects the applicant, much as in standard DA. If, at any point, an agent applies to an object that holds an application, one agent is rejected, and the rejected agent in turn applies to the best object among those that have not rejected him. This process continues until an agent makes a certain “threshold” number κ of offers for the first time. The stage is terminated at that point, and all tentative assignments up to that point become final. The next stage then begins with the agent who was rejected at the end of the last stage applying to the best remaining object and the number of proposals for that agent being reset to zero. The stages proceed in this fashion until no rejection occurs.

"This “staged” version of DA resembles standard DA except for one crucial difference: the mechanism periodically terminates a stage and finalizes the tentative assignment up to that point. The event triggering the termination of a stage is an agent reaching a threshold number of offers. Intuitively, the mechanism activates a “circuit breaker” whenever the competition “overheats” to such an extent that an agent finds himself at the risk of losing an object he ranks highly to an agent who ranks it relatively lowly (more precisely, above the threshold rank). This feature ensures that each object assigned at each stage goes to an agent who ranks it relatively highly among the objects available at that stage."

School choice at Chicago Booth

The University of Chicago's Booth school reviews school choice, with particular attention to Booth scholars:

Economics is changing how public schools and students choose each other

"Chicago Booth’s Seth Zimmerman got interested in school lotteries as an economics graduate student at Yale in the late 2000s. 
...
"Chicago Booth’s Eric Budish and UPenn’s Judd Kessler have found similar results [about families confused by complexity] for course allocation at the Wharton School at the University of Pennsylvania (see “You can’t always say what you want,” below). 
...
"In their research on New Haven’s schools, Zimmerman and his coresearchers wanted to quantify the effects of this sort of inequality, and particularly to understand how it played out in a system even more strategically complicated than New York’s. Past research assumed either that students and their families were strategizing correctly or that they were making one of a limited number of possible mistakes, such as not knowing their own priority group or playing naively by simply listing their choices in order of their preferences. 
...
"The researchers tried developing an app that would increase families’ understanding of their odds and help them strategize accurately. But they soon saw that simply adopting a truth-telling approach made more sense. Their work found an audience in New Haven Public Schools, and for the 2019--–20 school year, the city began employing a matching algorithm similar to New York’s.
...
"Chicago Booth’s Jacob Leshno says that currently most districts don’t use TTC systems, and he suggests a potential reason many have opted for DA instead: TTC systems are harder to explain to students who don’t get the schools they want. 
...
"However, Leshno and Stanford’s Irene Lo wanted to help administrators make full use of their options for school-matching systems by providing tools to help explain how TTC school-assignment algorithms work. Their research demonstrates it’s possible to explain matches under TTC systems to students and parents using the same palatable notion that applies to DA systems, removing a big impediment to their implementation."