The labor market that is the military: a report from the National Academies of Science, Engineering, and Medicine

 I recently served as a member of a National Academies committee on the issues facing the Air Force in managing its human capital, i.e. its labor force.  It resulted in a long report covering many aspects of Air Force policy.  

One of the fun things about that assignment was meeting with people throughout the U.S. armed forces (and some allies).  Yesterday I had the privilege of attending the promotion ceremony for a very thoughtful Air Force officer, Tobias Switzer. Congratulations, Colonel!.*

Readers of this blog are likely to be most interested in the evolving ways that military personnel are matched to new assignments, from time to time during their careers.  A first order problem has to do with retention, since the armed services compete with the private sector for highly trained people (e.g. pilots, cyber warriors, special operators, to name a few), which is most visible at times when the person in question doesn't have any further military service obligation.  Below, I excerpt some paragraphs concerning one new aspect of this process, called the Talent Marketplaces. (The page numbers refer to sections of the report, e.g. "p2-7" refers to page 7 of section 2.)

Here's the report:

A Consensus Study Report, from the National Academies of Sciences, Engineering, and Medicine 2020:

Strengthening U.S. Air Force Human Capital Management: A Flight Plan for 2020-2030. Washington, DC: The National Academies Press. https://doi.org/10.17226/25828

Committee on Strengthening U.S. Air Force Human Capital Management, Board on Human-Systems Integration, Division of Behavioral and Social Sciences and Education

Committee and Staff: Julie J.C.H. Ryan (Co-Chair), William J. Strickland (Co-Chair), Terry A. Ackerman, David S.C. Chu, Lt. Gen. Gina M. Grosso, Usaf (Retired), Brig. Gen. Leon A. Johnson, Usafr (Retired), Judith S. Olson, Dan J. Putka, Alvin E. Roth, Ann Marie Ryan, Stephen Stark, Cherie Chauvin, Study Director, Elizabeth T. Cady, Senior Program Officer, Daniel Talmage, Program Officer, Margaret Kelly, Sr. Program Assistant, Tina M. Latimer, Program Coordinator

Below are some snippets drawn from various sections of the report.

"since 2014, the Air Force has lost more fighter pilots annually than its annual production rate, and forecasts of the commercial airline pilot marketplace are an important variable in long-term workforce planning to develop and sustain the career field." (p2-7)

"A lack of clear data on why Airmen are leaving the force diminishes the Air Force’s ability to do such evaluations or establish an “early warning system” to identify recruits at risk of early attrition. Increased use of assignment tools like the Talent Marketplace will allow relevant longitudinal data to be collected on the extent to which Airmen’s separation decisions may be related to their preferences over the positions to which they could have been assigned as compared to the one to which they were assigned (see Appendix D)."  (p4-22)

"the recently implemented Talent Marketplace provides an innovative online means for matching Airmen with assignments based on expressed preferences of Airmen and position owners for post-accession job assignments. However, the usefulness of expressed preferences depends a good deal on how much information is available to Airmen about positions and to position owners about Airmen (through the Talent Marketplace), given that such information profoundly shapes preferences. Consequently, the most effective version of the Talent Marketplace would also serve as an information marketplace that allows position owners and Airmen to make appropriate information available to each other to form informed, accurate preferences (e.g., realistic job previews, using video and written descriptions). The key point is that matching, and the overall functioning of the USAF HCM system, may be improved by developing new methods of sharing preferences as well as new algorithms for taking preferences into account (see Appendix D)" (p4-26)

"In 2019, the Air Force began using the web-based platform, the Talent Marketplace, for making officer assignments (Lieutenant Colonel and below). The Talent Marketplace was initiated in an effort to meet a stated goal: “To the maximum extent possible, assign individuals on a voluntary basis and in the most equitable manner feasible while meeting mission and commander needs” (USAF, 2018a, p.2)." (p5-10)

"The Air Force is investigating implementing the Talent Marketplace to manage enlisted assignments, but a decision is still pending at this time."(p5-11)

"There are two officer assignment cycles per year. To support the Officer Assignment System for all assignments of Lieutenant Colonel and below (except for Judge Advocate General officers), the Air Force uses its newly developed Talent Marketplace. The web-based system provides transparency for available positions, provides visibility on an officer’s preferences to their commander, and incorporates gaining commander input as well for the first time. The technology behind it examines officer assignment solutions by incorporating specific prioritizations from both the officers who are eligible to move and the gaining unit (see Appendix D for discussion of preference informed matching). Officers on the vulnerable-to move list use the Talent Marketplace to indicate a desirability rating for assignment location preferences using a list of locations with jobs to fill, in alphabetic order. There is limited information on each position in the system: duty title, command, and location, but the officer can see how many other officers are interested in the position and make their decision accordingly.17 Any additional information the officer would like to know about the position is gathered through their own independent research. After the window closes for officers to bid for positions, the position owners access the system to see the final list of volunteers to fill their positions. The results of the matching algorithm are used as a first step in the process, which is further adjusted as needed and finalized by AFPC." (p5-11)

"As the Air Force expands its use of the Talent Marketplace for officers and develops a more modern approach to the antiquated Enlisted Quarterly Assignments List, it could benefit from considering the research conducted on and the implementation and results of similar marketplace initiatives (see for example, Malia, 2020). The U.S. Army, in particular, recently implemented its Army Officer Assignment Marketplace via Assignment Interactive Module (AIM).30 AIM is a centralized clearinghouse that requires officers and units to finalize preferences for the other side of the market at the same time, typically 6–9 months before officers are expected to move to their next assignment. The Army studies its assignment system in the Office of Economic and Manpower Analysis (OEMA), Department of Social Sciences, West Point.31 Information provided to the committee on the design and administration of AIM indicated that it is something of a hybrid model that involves a lot of hand-processing of assignments by assignment officers. However, it was reported that the “Human Resources Command received permission from the Assistant Secretary of the Army for Manpower and Reserve Affairs to test the concept of matching officers to jobs according to a deferred acceptance algorithm similar to that of the National Resident Matching Program,”32 which matches new doctors to residency programs (Roth, 1984; Roth and Peranson, 1999). 

"One aspect of the Army Cadet Branching process (used to assign new West Point graduates to branches) is that Cadets can bid for preferred assignments by offering to extend their service obligation. Although a detailed review of AIM was outside the scope of this study, the committee notes that analysis has suggested that its use of a deferred acceptance algorithm is seriously flawed in implementation (e.g. Switzer, 2011), and this may be important for the designers and administrators of the Air Force Talent Marketplace to study and understand." 

"As of May 15, 2019, the Army reports that 90,952 officers of all ranks had participated in AIM. Officers are encouraged to submit resumes, but the majority have not done so (from 7% of Colonels, up to 42% of Majors). Resume-writers are encouraged to include unique Knowledge, Skills, and Behaviors (KSBs), but almost none have done so. Units seeking to fill jobs are encouraged to submit (long) preference lists of officers for each job they are seeking to fill, and so far, participation has been spotty: “The best participation is from [the 10 percent of] units who submit preferences for many jobs, and for multiple officers on each job” (U.S. Army, 2019, p. 2). Although no explanation was provided to the committee, the Army’s overall low participation numbers suggest that the Air Force and Army could benefit from joint efforts to understand the reaction Airmen and Soldiers have had to these initiatives as well as to develop approaches to improve participation and therefore its overall utility.

"Turning back to the Air Force, the present (preliminary) use of deferred acceptance algorithms in the Talent Marketplace is not an evidence-based decision; rather it arises from a perhaps too-hasty parallel with the operation of the private-sector clearinghouse for American physicians (see discussion of preference informed matching in Appendix D). To guide Air Force research into post-accession assignment decisions to improve and expand the effectiveness and validity of the Talent Marketplace, the committee identified the following research questions:

 How do assignments affect separation decisions? 33 (Collect data on “Who stays, who leaves, where they go, would they have stayed for a better assignment?”)

 How are preference data related to family data? (Collect family data on jobs of spouses, age, and schooling of children)

 How is the new blended retirement system changing separation choices?

 How do pilot separations interact with airline hiring demands? (E.g., could new arrangements be initiated between the Air Force and commercial airlines to better meet fluctuating needs of both?34)

 Can exit interviews be combined with interventions that might prevent or delay separation by the most effective Airmen?

 How should the Talent Marketplace be organized for minimizing early separation of the most effective Airmen?

 Does the Talent Marketplace assure an appropriate distribution of talent across units?

 How does the Talent Marketplace affect individual and unit performance?" (pp5-27-28)

"Similar to the Army, the Air Force is implementing a “Talent Marketplace” that gives Airmen increased agency in decisions about their assignments, which should improve “fit” and career satisfaction. But early results suggest the Air Force could benefit from a better understanding of how Airmen view this initiative, perhaps working jointly with the Army which seems also to be encountering early implementation problems. At a minimum, any review should re-consider whether the deferred acceptance algorithm the Air Force Talent Marketplace currently employs is being deployed as effectively as possible, or whether some other preference-informed matching procedure might better fit Air Force needs. In any case, a better understanding of what information participants require to form their preferences reliably will help support the information exchange needed by any matching and assignment system that incorporates preferences." (p5-38)

Among the recommendations for the Talent Marketplace, the report includes:

"—Initiate a Talent Marketplace promotion campaign across the entire service to stimulate use and buy-in through formal training, consumer feedback, and success stories.

—Expand the use of the Talent Marketplace, or a conceptually similar technology, to modernize the approach to enlisted Airmen assignments.

—Leverage data and create processes to further enable the operational goals of the Talent Marketplace for both officers and enlisted Airmen.

 Ensure that the Talent Marketplace is also an information marketplace that gives position holders and candidates enough information about one another to form informed preferences.

 For job openings already using the Talent Marketplace, encourage position owners to post detailed job descriptions, and review many candidates (i.e., submit long preference lists), and encourage candidates to review many jobs.

 Incentivize true preference revelation for both “hiring” and “being hired” parties (i.e., make it safe to rank opportunities in their honest order of desirability.

 Use data to predict and recommend person-job match in a contextual manner, including preferences on both sides. Better leverage exit survey and other data for insights such as hidden reasons for attrition, the influence of preferences on separation decisions, and diversity concerns related to retention.

—Expand the Talent Marketplace to strategically fill hard-to-fill jobs and improve retention, especially in critical career fields.

 Analyze whether and why certain job assignments predictably cause top choices to resign rather than take the assignment.

 Consider alternative approaches and incentives to offer declined jobs to someone who would prefer the position.

 Develop flexible procedures that preserve the possibility of retaining candidates who have chosen to separate rather than accept an assignment, by exploring whether other assignments would cause them to reconsider." (pp6-16-17)

From Appendix D: Preference-Informed Matching in Job Assignment

"Many of the current Air Force assignment procedures have grown out of the historical low-tech assignment tool consisting of a whiteboard covered with colored sticky notes, a longstanding system later augmented by spreadsheets. Often assignment teams worked with very little information about job requirements and candidate preferences. Although candidates with particular preferences or special needs could sometimes have these recognized by having their current commander (i.e., the “losing commander” who would be losing them, but who knew them) advocate for them to the assignment team, there were few ways of communicating preferences in a general and easily-used way.

"In recent years the United States Air Force and other services have moved towards somewhat more market-oriented assignment procedures, such as the Talent Marketplace developed for use by the officer assignment system,1 that make it easier for candidates and also for hiring authorities to share information and express preferences. This approach is shaped by the idea that sometimes the mutual needs and preferences of the candidate and the hiring authority could be better expressed and met. But the equivalent of whiteboards and sticky-notes still plays a role, as the information needed for hiring authorities and candidates to gain information with which to form and express preferences is still limited." (pD-1)

"Benefits of Deferred Acceptance Algorithms: DA algorithms use the information contained in the preferences of both candidates and hiring authorities, and they produce what are called stable matchings, which don’t have “blocking pairs” (i.e. there is never a service member and Air Force job that would have both, mutually, preferred each other) or “justified envy” (in which a lower-priority candidate receives a job preferred by a higher priority candidate with equal qualifications). This approach also renders it safe for members of the proposing side to reveal their preferences truthfully. Deferred acceptance algorithms have been used to match new doctors to their first positions in the U.S., and in other health care labor markets, and to match children to schools in a number of American cities (see Roth 2002, 2008 and the references cited there, and Roth 2015).

"Drawbacks of Deferred Acceptance Algorithms: The blocking pairs the Air Force needs to be most concerned with for retention don’t involve Air Force positions and service members. They instead involve private-sector jobs and service members who might choose to separate from the Air Force to take a private-sector job instead of the offered Air Force assignment. Because of this, it isn’t clear that the form of stability produced by deferred acceptance algorithms is the best goal for an Air Force assignment system. Eliminating blocking pairs involving Airmen and alternative assignments within the Air Force comes at a cost, since a stable matching (i.e., one with no such blocking pairs) may not be Pareto optimal for candidates (i.e., it may be possible to give all of some groups of candidates assignments for which they are all qualified and which they all prefer, which might better facilitate retention of service members who have no further military obligation). This is worth further study, particularly if (as is now the case) deferred acceptance algorithms are being employed to generate an initial matching that is then modified by assignment teams." (ppD6-7)

"To summarize, the Talent Marketplace has to also become an information marketplace that allows position owners and Airmen to make appropriate information available to each other in order to develop informed, accurate preferences. The key point is that matching, and the overall functioning of the human capital system, may be improved by developing new methods of sharing preferences as well as new algorithms for taking preferences into account.#" (pD-10)

#"Much of the academic literature on matching assumes that institutions that allow participants to form accurate preferences already exist. One of the tasks facing the Air Force is to develop such institutions in parallel with the development of the Talent Marketplace."

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*In these complicated times it's good to remember that the oath that U.S. military officers take is to defend the Constitution of the United States.

Philippe Steiner on matching and romance, and transplants

 The French economic sociologist Philippe Steiner, who studies (among other things) how markets and gift giving can coexist, has a short piece about dating platforms.

Plateformes d’appariement, rencontres amoureuses et mondes marchands ("Matching platforms, romantic encounters and trading worlds") by Philippe Steiner, Dans Revue Française de Socio-Économie 2020/2 (n° 25), pages 161 à 166

Via google translate:

"Two elements can serve to close this brief reflection on the meeting of economic sociology and the sociology of sexuality.

"The appearance of a commercial intermediary modifies the social conditions of the romantic encounter. However, is it of a commercial nature? The use of the term matrimonial market, in which it is a question of "making a choice, maximizing your options and using calculation techniques in terms of costs and profits, and efficiency" [Illouz, 2006, p. 252], might lead one to believe. This interpretation is doubtful: if the market implies the idea of ​​choice, the converse is not true. The market relationship is characterized by monetary power, that is, the ability to obtain the desired good by paying more - it is not for nothing that auction technology is often taken as the example of the market. Also, once the relationship connecting individuals to the platform has brought together two potential partners, it is not the ability to pay that will make the match between them."

...

"Finally, the matching technologies that are at work in the platforms are not necessarily associated with the market world [Steiner, 2016, chap. 7]. Matching platforms using deferred acceptance or optimal trading cycle technologies can serve as well to reproduce the market functioning as to enable non-market matches. Alvin Roth's economic engineering applies to the labor market (pairing of medical interns and hospitals) as well as to organ transplantation, in which the commercial relationship is banned by national laws as well as by international declarations of professionals."

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The following interview may also be of interest to readers of this blog:

“Organic” Gift-Giving and Organ Transplantation, the Development of Economic Sociology and Morality in a Super-Monetized World: An Interview with Philippe Steiner,  Journal of Economic Sociology, 2014, vol. 15, issue 1, 11-19

 "when I studied the issue of organ transplantation, in full agreement with Healy’s approach, the organizational setting appeared to be very, very important. Accordingly, organ donation is a gift that individual actors provide to organizational actors. And then, with this gift, the organization conducts an extensive and very important process to ensure that the kidney does not convey illness, AIDS, cancer. In addition, the degree of compatibility between the organ and the body is checked. And they do this very rapidly. Then, they allocate the gift to a new individual actor. However, the important thing, in my opinion, is that between the first individual actor and the second one there is a large organization. More precisely, a plurality of organizations. This is something that I refer to in my present book as  organizational gift-giving”. To parallel the Durkheimian distinction between mechanical and organic solidarity, I would call this “organic” gift-giving and thus draw a distinction between the usual story about people in Melanesia who give gifts according to Malinowski and Mauss. 

...

" I am trying to map gift-giving, inheritance, and the exchange of symbolic goods, which are at the frontiers of usual market exchanges, to provide a broad view of what exchange at large means in our present society. Considering market exchange as a limited element of all the transactions in the world is my way to escape this super-monetized world.

...

"Social forces are pushing in the direction of a fullblown market society, whereas others are resisting and devoting their energy to maintaining a frontier between market exchanges and other forms of exchange. In that sense, political issues remain central, as in Polanyi’s time. To return to my research on organ transplantation, I would like to stress that the last chapter of the book concerns what is usually referred to as transplant tourism — is it good to have transplant tourism? Should it be fully legalized? Is the creation of a biomarket in India for Americans suffering from final-stage kidney failure a good thing? You must say yes or no. You cannot escape a political decision. And my answer was “Definitely, no biomarkets”. However, of course, this is not an easy position because as you know there are individuals who are dying because of the lack of kidneys. Therefore, this (response) is uncertain, difficult. However, in the end, not giving an answer is a boon to those pushing for the commodification of body parts. So, finally, I decided to stay on the Maussian–Polanyian side — “limit the market.”

Market design in Philosophy of the Social Sciences, by Philippe van Basshuysen

Philippe van Baßhuysen has an article now online in the journal Philosophy of the Social Sciences, focusing on market design, and taking as his main example the design of the labor clearinghouse for American doctors, the National Resident Matching Program. (He also includes some remarks about spectrum auctions.)  He comments a bit on the gap between how some parts of the philosophy of science literature think about market design, and how market designers thing about it, and his article brings some of the latter thought to the attention of philosophers.

How to Build an Institution, by Philippe van Basshuysen

Philosophy of the Social Sciences. November 2020. doi:10.1177/0048393120971545.

"Abstract: How should institutions be designed that “work” in bringing about desirable social outcomes? I study a case of successful institutional design—the redesign of the National Resident Matching Program—and argue that economists assume three roles when designing an institution, each of which complements the other two: first, the designer combines positive and normative modeling to formalize policy goals and to design possible mechanisms for bringing them about. Second, the engineer refines the design by conducting experiments and computational analyses. Third, the plumber implements the design in the real world and mends it as needed."

Convalescent plasma for Covid-19 may not be as effective as hoped

 Here's a recent article from the New England Journal of Medicine: they conclude that treatment of Covid-19 patients with convalescent plasma is no better than a placebo treatment (for a group of seriously ill patients with over a 10% mortality rate).

A Randomized Trial of Convalescent Plasma in Covid-19 Severe Pneumonia

by Ventura A. Simonovich, M.D., Leandro D. Burgos Pratx, M.D., Paula Scibona, M.D., María V. Beruto, M.D., Marcelo G. Vallone, M.D., Carolina Vázquez, M.D., Nadia Savoy, M.D., Diego H. Giunta, M.D., M.P.H., Ph.D., Lucía G. Pérez, M.D., Marisa del L. Sánchez, M.D., Andrea Vanesa Gamarnik, Ph.D., Diego S. Ojeda, Ph.D., et al., for the PlasmAr Study Group

RESULTS: A total of 228 patients were assigned to receive convalescent plasma and 105 to receive placebo. The median time from the onset of symptoms to enrollment in the trial was 8 days (interquartile range, 5 to 10), and hypoxemia was the most frequent severity criterion for enrollment. The infused convalescent plasma had a median titer of 1:3200 of total SARS-CoV-2 antibodies (interquartile range, 1:800 to 1:3200]. No patients were lost to follow-up. At day 30 day, no significant difference was noted between the convalescent plasma group and the placebo group in the distribution of clinical outcomes according to the ordinal scale (odds ratio, 0.83 (95% confidence interval [CI], 0.52 to 1.35; P=0.46). Overall mortality was 10.96% in the convalescent plasma group and 11.43% in the placebo group, for a risk difference of −0.46 percentage points (95% CI, −7.8 to 6.8). Total SARS-CoV-2 antibody titers tended to be higher in the convalescent plasma group at day 2 after the intervention. Adverse events and serious adverse events were similar in the two groups.

CONCLUSIONS: No significant differences were observed in clinical status or overall mortality between patients treated with convalescent plasma and those who received placebo. 

HT: Irene Wapnir

Market Design Job Market Candidates in Econ and Computer Science (or a combination of the two) from SIGecom Exchanges

 Assaf Romm writes:

"The editors of SIGecom Exchanges were kind enough to host on their November issue a list that I compiled containing profiles of market designers currently on the job market. The profiles contain links to their homepage and CVs, and a short summary of their research and job market papers. There are twelve excellent candidates with very interesting papers!

"The list of candidate profiles is here. "

And here's the list of people described at greater length at the link--you could hire one of them.

Delacretaz, David, Goldner, Kira,  Gonczarowski, Yannai A., Imamura, Kenzo, Koren, Moran, Larroucau, Tomas, Qian, Pengyu, Raghavan, Madhav, Sayedahmed, Dilek, Sullivan, Colin. Thakur, Ashutosh , Vohra, Akhil.

Madhav Raghavan on transparency (and on the European job market)

Madhav Raghavan is completing a postdoc at the University of Lausanne this year (working with Bettina Klaus), and is on the job market, primarily in Europe.  I got to know him when he visited us briefly at Stanford this year (in person, before having to retreat back to Switzerland, as Covid surged...)

His job market paper concerns the verifiability of the algorithms that run centralized clearinghouses, and how that can be improved by changing the kinds of feedback that participants receive.

Transparency in Centralised Allocation: Theory and Experiment  by Rustamdjan Hakimov and Madhav Raghavan

Abstract: Many algorithmic allocation mechanisms suffer from a verifiability problem: participants cannot check if their assignments are correct. This problem is compounded if there are suspicions that the designer has deviated from the true allocation. We formalise these concerns and propose solutions in an information-based framework. A participant's assignment is `verifiable' by her if any other assignment contradicts her information. A stronger requirement is `transparency', where the designer cannot deviate from the true allocation without being detected. We show how the communication of `terminal-cutoffs' and the use of `predictable' multi-stage mechanisms each provide information to participants that verifies their assignments. Even though the information from predictable mechanisms and terminal-cutoffs can each be manipulated by a dishonest designer without detection, in our main result we show that they nevertheless achieve transparency if used together. We suggest transparent environments for use in school admissions, single-object auctions and house allocation. We support the effectiveness of our solutions via a school admissions laboratory experiment.

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The paper develops the theory in some generality, and also focuses on the particular case of the deferred acceptance algorithm, which is the subject of the experiment they report.  

If you're hiring, he's worth a close look.

Bob Wilson and Paul Milgrom, interviewed about their work

 Stanford News has the story:

The bid picture: Stanford economists explain the ideas behind their 2020 Nobel Memorial Prize in Economic Sciences

"If designed correctly, auctions can distribute resources fairly, according to Stanford economists Robert Wilson and Paul Milgrom. The pair were awarded the 2020 Nobel Memorial Prize in Economic Sciences for their improvements to auction theory and inventions of new auction formats."

Here's the video:

Paying for plasma to be legal in Alberta

 Reason magazine has the story:

Canada Inches Closer to Allowing More People To Be Paid for Plasma--For too long, our northern neighbors have depended on plasma imported from the U.S. to meet demand. With the passage of new legislation in Alberta, this may change.  by LIZ WOLFE 

"Albertans will soon be able to receive payment for their blood and plasma donations. Bill 204, the Voluntary Blood Donations Repeal Act, was introduced by Tany Yao, a member of the legislative assembly for Alberta's provincial government, and passed in the legislature this week. It must now get royal assent—a mere formality—for it to become law. The bill overturns a 2017 prohibition on paid plasma, and will allow private companies to pay plasma donors for their efforts. If they so choose, people will still be able to donate blood and plasma without receiving compensation via Canadian Blood Services.

...

"United Nurses of Alberta's president Heather Smith told Global News that "the government is putting its ideology and desire to support profiteers above what is actually safe for Albertans and Canadians." Elsewhere she said that "donating blood should not be viewed as a business venture."

HT: Peter Jaworski

Colin Sullivan on organ transplant policy (and on the job market this year)

 Colin Sullivan is completing a two-year postdoc at Stanford this year, and is on the job market.

His job market paper is an experiment with an exceptionally creative design. (Spoiler: it involves a cat actually getting a kidney transplant.) 

Eliciting Preferences Over Life And Death: Experimental Evidence From Organ Transplantation by Colin by D. Sullivan

Abstract: Optimal allocation of scarce, life-saving medical treatment depends on society’s preferences over survival distributions, governed by notions of equality and  efficiency.  In  a  novel  experiment,  I  elicit  preferences  over  survival  distributions in incentivized, life-or-death decisions. Subjects allocate an organ transplant among real cats with kidney failure. In each choice, subjects allocate a single organ based on the expected survival of each patient. The survival rates imply a price ratio, allowing me to infer the shape of indifference curves over survival bundles. I find that the vast majority (80%) of subjects respond to  increases  in  total  expected  survival  time,  while  a  small  minority  display Leontief preferences, providing the transplant to the shortest-lived patient at all  price  ratios.  Hypothetical  decisions  may  not  be  reliable  in  this  context: a large share (46%) of subjects allocate a hypothetical transplant differently than a real transplant, though estimates of aggregate preferences are the same across incentivized and unincentivized conditions. Finally, I show that aversion to wealth inequality is a good predictor of aversion to survival inequality.

(This human subjects research proto-col  was  approved  by  the  Stanford  University  Institutional  Review  Board  (IRB).  A discussion of ethical considerations in designing this protocol is included in Appendix A.)

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It's not his first really very creative experimental design: check out is 2019 paper in the AER: 

Incentivized Resume Rating: Eliciting Employer PreferencesWithout Deception (With Judd B. Kessler And Corinne Low)

American Economic Review, 2019, Vol. 109 (11): 3713-44. Online Appendix

Abstract: We introduce a new experimental paradigm to evaluate employer preferences, called Incentivized Resume Rating (IRR). Employers evaluate resumes they know to be hypothetical in order to be matched with real job seekers, preserving incentives while avoiding the deception necessary in audit studies. We deploy IRR with employers recruiting college seniors from a prestigious school, randomizing human capital characteristics and demographics of hypothetical candidates. We measure both employer preferences for candidates and employer beliefs about the likelihood candidates will accept job offers, avoiding a typical confound in audit studies. We discuss the costs, benefits, and future applications of this new methodology.

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My advice if you're hiring: check him out.

Akhil Vohra on unravelling (and on the job market this year)

Akhil Vohra, who will be finishing his Ph.D. in Economics at Stanford this year, has been thinking about unraveling for a long time.  His job market paper explores a novel channel by which markets can unravel in time, with early, inefficient hiring, even when talent isn't scarce.

Unraveling and Inefficient Matching by Akhil Vohra 

Job Market Paper, November 5, 2020

Abstract: Labor markets are said to unravel if the matches between workers and firms

occur inefficiently early, based on limited information. I argue that a significant determinant of unraveling is the transparency of the secondary market, where firms can poach workers employed by other firms. I propose a model of interviewing and hiring that allows firms to hire on the secondary market as well as at the entry level. Unraveling arises as a strategic decision by low-tier firms to prevent poaching. While early matching reduces the probability of hiring a high type worker, it prevents rivals from learning about the worker, making poaching difficult. As a result, unraveling can occur even in labor markets without a shortage of talent. When secondary markets are very transparent, unraveling disappears. However, the resulting matching is still inefficient due to the incentives of low-tier firms to communicate that they have not hired top-quality workers. Coordinating the timing of hiring does not mitigate the inefficiencies because firms continue to act strategically to prevent poaching.

You can see him talk about his job market paper in this four minute video:

 

He applies his model to a number of labor markets, both those which are unraveled and those which aren't:

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My advice if you're hiring: check him out.

Price gouging during the pandemic: NY law revised and enforced

 Here's the press release from the office of the Attorney General of New York:

Attorney General James Stops Three Amazon Sellers from Price Gouging Hand Sanitizer and Recoups Funds for New Yorkers:  Sellers to Pay More Than $52,000 in Penalties and Nearly $23,000 in Consumer Restitution--AG James Reminds Sellers Price Gouging is Unlawful During Pandemic

"New York Attorney General Letitia James today announced that she has stopped three Amazon sellers from price gouging hand sanitizer during the coronavirus disease 2019 (COVID-19) public health crisis, and that she will help deliver tens of thousands of dollars back into the pockets of defrauded New Yorkers. Three sellers — Yvette Chaya d/b/a Northwest-Lux (Northwest-Lux), Mobile Rush, Inc. d/b/a Best_Deals_27 (Mobile Rush), and EMC Group, Inc. d/b/a Supreme Suppliers (EMC) — will pay the state of New York more than $52,000 in penalties and reimburse consumers almost $23,000 for overcharging for hand sanitizer during the pandemic.

“Price gouging on necessary consumer supplies during an unprecedented public health emergency is absolutely unconscionable and will not be tolerated,” said Attorney General James. “Instead of ensuring individuals could protect themselves from the coronavirus, these businesses operated with dirty hands by charging exorbitant prices on hand sanitizer and other cleansing products. My office will continue to clean up this unlawful practice by using all of the tools at our disposal to prevent price gouging during this pandemic.

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"The OAG has already issued more than 1,800 cease-and-desist orders to businesses that stand accused of violating New York’s price gouging law. 

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"Sellers should be aware that New York revised its price gouging statute, effective June 6, 2020, to impose increased penalties against those who price gouge essential items during a pandemic."

Adventures in transplant transport

 Speedy transport of transplantable organs is an important part of transplantation.  Sometimes the logistics are more exciting than you would like.  Here are two news stories:

Donated Heart Survives Helicopter Crash and Being Dropped by Medic--The heart was successfully transplanted moments later.  By Loukia Papadopoulos

Italian Police Use Lamborghini To Transport Donor Kidney 300 Miles In Two Hours   by Elizabeth Blackstock  (HT Scott Kominers)

Pandemic inspired changes in the economy that may last--real estate and medicine

 In academia, Zoom seminars may coexist with in-person seminars long after the pandemic has ended. They aren't as nice as in-person seminars, but they involve much less air travel.

Business meetings too can more easily be conducted remotely these days, through Zoom, Google Meet, Microsoft Teams, etc. Once again, there's something missing compared to in person meetings, but that's counterbalanced by the skipped travel.

Exercise has changed--fewer visits to the gym, but internet companies like Peloton and Mirror combine home gym equipment with workouts in internet gym classes.

Here are some other items that have caught my eye:

Real Estate Transactions Go Virtual--The traditional real estate closings with a room full of people and stacks of documents are becoming a memory, as much of the process is now online.  By Sydney Franklin in the NY Times

"Real estate transactions have gone largely digital as the pandemic has disrupted nearly every aspect of home buying, from house hunting to securing a mortgage, getting an appraisal, notarizing documents and signing the final closing documents.

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"While some clients continue to prefer in-person closings, others are giving their lawyers power of attorney to sign the final documents for them or they’re executing closings on virtual platforms like DocuSign.

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"By the time New York’s real estate market reopened in June after several months of coronavirus restrictions, most buyers were prioritizing virtual tours before reaching out for an in-person visit.

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"Since March 31, an executive order by Gov. Andrew M. Cuomo has allowed notaries in New York to sign documents using audio-video technology instead of signing and notarizing documents in person.

"Dawn Pereyo, an underwriter and past president of the New York State Land Title Association, says this work flow is the way of the future. Twenty-nine states, not including New York, have already enacted permanent remote online notarization (RON) legislation. “The executive order has allowed us to start down the road of RON,” she said.

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And this:

20 Ways 2020 Changed How We Use Technology Forever--Our reliance on technology while isolated at home these past months—whether Zooming into weddings or FaceTiming with doctors—has permanently altered our relationship to gadgets.   By Matthew Kitchen in the WSJ

"telemedicine and teletherapy visits became the norm. According to a survey by the American Psychiatric Association, the percentage of patients regularly using some form of telehealth with a professional rose from 2.1% pre-pandemic to more than 84.7% as of this summer."

Matching for platonic co-parenting

 The Guardian has the story, if you're looking for a co-parent rather than a life partner:

‘I wanted to meet a mate and have a baby without wasting time’: the rise of platonic co-parenting--They’re ready to start a family, but can’t wait for The One. As ‘mating’ sites boom under lockdown, we meet those hoping for a better way to raise a child

"In a world where biological science and equal rights have diversified ways to start a family, platonic co-parenting – the decision to have a child with someone you are not romantically involved with and, in most cases, choose not to live with – remains a relatively new phenomenon.

"Well established in gay communities, along with egg and sperm donation, it is on the rise among heterosexual singles. Tens of thousands have signed up to matchmaking sites at a cost of around £100 a year. On Coparents.co.uk, which launched in Europe in 2008, two-thirds of its 120,000 worldwide members are straight. Modamily, which launched in LA in 2012, has 30,000 international members, of whom 80% are straight and 2,000 are British. UK-based competitor PollenTree.com has 53,000 members, split 60/40 women to men, and ranks its domestic market as its strongest. During lockdown, the latter two sites reported traffic surges of 30-50%."

CHOICE SCREEN AUCTIONS by Michael Ostrovsky

 Mike Ostrovsky points out that small design decisions can have big consequences, and considers how European regulations have caused search engines to be allocated on Android phones.

CHOICE SCREEN AUCTIONS by Michael Ostrovsky, NBER Working Paper http://www.nber.org/papers/  (a less gated version is here)

"ABSTRACT: Choice screen auctions have been recently deployed in 31 European countries, allowing consumers to choose their preferred search engine on Google's Android platform instead of being automatically defaulted to Google's own search engine. I show that a seemingly minor detail in the design of these auctions—whether they are conducted on a “per appearance” or a “per install” basis—plays a major role in the mix and characteristics of auction winners, and, consequently, in their expected overall market share. I also show that “per install” auctions distort the incentives of alternative search engines toward extracting as much revenue as possible from each user who installs them, at the expense of lowering the expected number of such users. The distortion becomes worse as the auction gets more competitive and the number of bidders increases. Empirical evidence from Android choice screen auctions conducted in 2020 is consistent with my theoretical results."

The auction rules: "In each country auction, search providers will state the price that they are willing to pay each time a user selects them from the choice screen in the given country. The three highest bidders will appear in the choice screen for that country. The provider that is selected by the user will pay the amount of the fourth-highest bid."

...

"In this paper, I show that a seemingly minor detail of the implementation of choice screen auctions plays a major role in their outcomes—and thus in the overall effectiveness of the antitrust remedy. Specifically, while the answer in the Q&A section of the document states that an auction “allows search providers to decide what value they place on appearing in the choice screen and to bid accordingly,” the auction, as implemented, charges these providers not for appearing in the choice screen but for being chosen by a user. 

"While the difference may seem to be just a matter of language, it is not. To see the intuition for the difference, consider a version of the auction with just one available spot and two bidders. Bidder A gets revenue $10 from each user who installs its search engine, and if it is shown as an option in the choice screen, then the probability that a user will choose it is 10%. Bidder B gets revenue $20 from each user who installs its search engine, but the probability that a user will choose it (if it is shown as an option in the choice screen) is only 1%. The value that bidder A has for appearing on the screen is therefore $1, and the value that bidder B has for appearing on the screen is $0.20. Thus, if the auction is conducted on the “per appearance” basis, then bidder A will win, will pay $0.20 per appearance, and will have its search engine chosen by users 10% of the time, while the dominant platform’s own search engine will be chosen 90% of the time. If, instead, the auction is conducted as implemented, with bidding and payment on the “per install” basis, then bidder B will win and will pay $10 every time its search engine is chosen (corresponding to $0.10 per appearance). The winner’s search engine will be chosen only 1% of the time, and the dominant platform’s one will be chosen the remaining 99% of the time. Thus, relative to the per appearance auction, the per install auction results in a lower likelihood that an alternative search engine will be chosen by the user (making it correspondingly more attractive to the dominant platform) and gives advantage to search engines that generate higher revenue per user vs. those that are more popular but generate less revenue on a per-user basis. I

OK Cupid on trends in dating

 The datng site OK Cupid regularly surveys its users, and have just published a summary of recent results:

The Future of Dating--OkCupid Data Predicts 8 Dating Trends Singles Can Expect from 2021

Perhaps the most predictable of the 8 trends they note is this one:

"More than 2 million people answered our question “Do you prefer that your date shares your political views?” with 64% of respondents agreeing: cross-party dating does not work in modern relationships. In 2021, we’re going to see more people are refusing to date outside party lines. Around the world, 5 million daters answered our question “Could you date someone who has strong political opinions that are the exact opposite of yours?”, and there’s been an upward trend in people refusing to date across party lines. In 2019, 53% of respondents said they couldn’t date someone whose political views were the opposite of theirs — and that ratio jumped to 60% in 2020."

Joshua Gans on Paul Milgrom

 In Vox.EU:

Paul Milgrom, price discoverer and Nobel laureate--Joshua Gans 15 November 2020

"One thing I remember clearly about Paul Milgrom as an advisor is the child-like glee he would exhibit when he had found a new and interesting problem to solve. That happened one day in 1993 when he had been asked to consult on the proposal by the US Federal Communications Commission (FCC) to auction off spectrum for the next generation of mobile phones."

UAE modifies laws on alcohol, cohabitation, and honor killings

 The Guardian has the story:

UAE decriminalises alcohol and lifts ban on unmarried couples living together--Country also ends lenient punishments for ‘honour’ killings as part of reforms       by Emma Graham-Harrison and agencies

"The United Arab Emirates has ended lenient punishments for so-called “honour” killings, lifted a ban on unmarried couples living together and decriminalised alcohol, in reforms to personal laws.

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"The country, where citizens are outnumbered nine-to-one by migrants, has long branded itself internationally as a modern business and tourist destination and has not always strictly implemented its own law.

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"Emirati judges have until now been allowed to hand down lighter sentences when a woman was attacked or killed by a relative because she has acted in a way he considers to have affected the family reputation, or “honour”. That can include eloping or fraternising with men not related to them.

"Kenneth Roth, the executive director of Human Rights Watch, described the changes as “positive steps for women’s rights” but also raised concerns about the daughters of Dubai’s ruler, Sheikh Mohammed bin Rashid al-Maktoum.

"A UK family court this year found he had orchestrated the abductions of two of his children – one from the streets of Cambridge – and subjected his youngest wife to a campaign of “intimidation”.

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"The reports did not mention other behaviour outlawed by Emirati law, which has previously landed foreigners in trouble, including homosexual relationships, cross-dressing and public displays of affection.

"Although alcohol is available for sale in restaurants and bars in Emirati cities, individuals needed a licence to buy booze or keep it in their homes. The new laws would apparently allow Muslims, who have not been able to get licences, to drink alcoholic beverages freely."

Large cores in college admissions markets: the case of Hungary by Biro, Hassidim, Romm, Shorrer and Sovago

 Here's a paper that tells us something about stable college admissions, and also something more general about large cores in matching with contracts.

Need versus Merit: The Large Core of College Admissions Markets*

by Péter Biró, Avinatan Hassidim, Assaf Romm, Ran I. Shorrer, Sándor Sóvágó

Abstract: This paper studies the set of stable allocations in college admissions markets where students can attend the same college under different financial terms. The stable deferred acceptance mechanism implicitly allocates funding based on merit. In Hungary, where the centralized mechanism is based on deferred acceptance, an alternate stable algorithm would change the assignment of 9.3 percent of the applicants, and increase the number of assigned applicants by 2 percent. Low socioeconomic status applicants and colleges in the periphery benefit disproportionately from moving to this non-merit-based algorithm. These findings stand in sharp contrast to findings from the matching (without contracts) literature.

Another art museum cancels sale of art in response to pushback

 The NY Times has the story about another last minute cancellation of a "deaccessioning" sale by an art museum:

Baltimore Museum of Art Cancels Painting Sale that Drew Complaints--The museum was prepared to sell three major works to pay for salary increases and to diversify its collection, but many critics disagreed with the plan.   By Hilarie M. Sheets

"The Baltimore Museum of Art is pausing its plan to sell three major paintings from its collection. A Sotheby’s sale of works by Brice Marden, Clyfford Still and Andy Warhol was estimated to bring in $65 million to fund acquisitions of art by people of color and staff-wide salary increases.

"The decision, on the day of a planned auction of two of the works, came after weeks of criticism from people who opposed the sale and hours after a conversation between leaders of the museum and the Association of Art Museum Directors, a professional organization advancing best practices for art museums.

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"In April, the association loosened its strict deaccessioning guidelines for the next two years to help museums under financial stress from the pandemic by allowing them to sell works to fund direct collection care, not just the acquisition of other artworks. While the Baltimore Museum has a balanced budget, its director, Christopher Bedford, said earlier this month he saw an opportunity to create an endowment for collection care that would then free up money for salary increases — a vision-based initiative in line with his efforts to bring greater equity to both its collections and workplace culture."

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Tuesday, October 27, 2020

Auction of art from Jerusalem museum postponed at the last moment