More on NYC school choice lotteries

 Following my recent post on random numbers in the NYC school choice system(s) for high school and middle school, Amélie Marian writes to me from Rutgers, where she is a professor of computer science and a close observer of school choice.

She writes:

"I just read your blog post about the NYC school lottery system glitch and I found the comparison to plumbing extremely adequate to describe what has been happening with the NYC school admission system these past few years. 

...

"One of the most major recent change is that most admissions are now decided solely by lottery numbers; most schools don't rank students anymore***. The random number, originally designed as a tie-breaker, is now the main deciding factor. With this in mind, I, along with parent advocacy groups, pushed the DOE to provide students with their lottery numbers so that families could adjust their expectations and strategize their lists to avoid being unmatched; in one Manhattan district last year, 18% of students did not receive an offer to a school on their list. I have been working on explaining the system to parents, and on crowdsourcing data to help parents estimate their student's odds of admissions at various schools:

 * Part 1 on the random numbers: https://medium.com/p/bae7148e337d  

* Part 2 on their impacts on strategy: https://medium.com/p/42dd9a98b115

"*** MS admissions is purely lottery-based but geographically limited by district. HS admissions is city-wide. Some HS are allowed to screen students, but the screening is very coarse; this year 63% of students qualify in the top screening group, within the group admissions are decided by lottery numbers.

 "Of course, every modification in the system has had unintended consequences. The "glitch" reported by the NYPost was likely due to the DOE system assigning random numbers to applications and not to students, which was a reasonable approach as long as the numbers were not shared with families. And, as you pointed out in previous blog posts, the addition of waitlists has had repercussions as well. In fact, the DOE has changed the way it processes waitlists yearly since their inception, most likely to fix the problems that the previous iteration created. The latest version unfortunately introduces an incentive to strategize for waitlists in the original choice ranked list. "

Venture capital and crypto academics join forces to build a lab

 The venture capital firm Andreessen Horowitz (also known as "a16z") has recruited a star-studded list of academic researchers to brainstorm about blockchain computer science and economics:

Announcing a16z crypto research

"There is an opportunity for an industrial research lab to help bridge the worlds of academic theory with industry practice, and to help shape crypto and web3 as a formal area of study by bringing together the very best research talent from the various disciplines that are relevant to the space. 

"Today, we’re excited to announce the creation of a16z crypto research, a new kind of multidisciplinary lab that will work closely with our portfolio and others toward solving the important problems in the space, and toward advancing the science and technology of the next generation of the internet. 

******

And here is the leadership and founding team:

"Tim Roughgarden 

"For twenty years, as a researcher and computer science professor at Stanford and Columbia, Tim has led the development of Algorithmic Game Theory, a field that brings together ideas from Computer Science and Economics to solve real-world computing problems. He wrote the definitive textbooks and courses on the field. 

"In recent years, Tim has increasingly focused on research problems in web3. That is no surprise, given how fundamental questions about incentives are in the space. For example, prompted by discussions with Vitalik Buterin and other members of the Ethereum community, Tim published the first formal analysis of the (initially polarizing) fee mechanism that was proposed in EIP-1559. The report helped the community get comfortable with the proposal, and it was subsequently deployed to the Ethereum mainnet in August of last year.

"Besides Tim’s brilliance as a researcher, he’s also a great teacher. The YouTube lectures for his crypto and blockchain course at Columbia, for example, are one of the best and most popular introductions to the space.

"Getting to know Tim over the course of over a year has left us with no doubt that he’s the perfect person to lead a16z crypto research full time. We’re thrilled to announce that Tim has joined us as Head of Research.

"Dan Boneh

"Dan is a professor of computer science and electrical engineering at Stanford University, where he leads the Applied Cryptography, the Stanford Center for Blockchain Research (CBR), and the Computer Security Lab. He is one of the most distinguished cryptographers and computer security researchers in the world, wrote the definitive textbook on applied cryptography, and is also a renowned educator and entrepreneur.

"In recent years, Dan’s work has focused on cryptographic tools for blockchain applications. He co-developed the concept of a verifiable delay function (VDF), and has designed several other cryptographic constructions (like BLS signatures) that have since been widely adopted in web3. His cryptography MOOC, which is free and open to the public, is a popular way to get started with cryptography. 

"For the past four years, Dan has worked closely with us and our portfolio as a Research Advisor. With the creation of a16z crypto research, we’re excited to promote Dan to Senior Research Advisor. His work with us will be integral to setting the direction for the team, while continuing to provide support for founders in our portfolio.

##

"Both Dan and Tim have made countless contributions to their fields, but great researchers never work alone.

"The founding team

"Under Tim’s leadership, we’re bringing onboard a multidisciplinary, all-star founding team of Research Partners. Each member is a leader in their field, has made outstanding research contributions to web3, and has worked toward deploying those contributions in the real world.

"Joseph Bonneau wrote the (text)book on cryptocurrency technologies, and he’s also published work on social networking privacy, cryptographic protocols, side-channel attacks, software obfuscation, and reverse engineering. He has taught cryptocurrency courses at the University of Melbourne, NYU, Stanford, and Princeton, and received a PhD in computer science from the University of Cambridge and BS/MS degrees from Stanford.

"Benedikt Bünz is the Chief Scientist of Espresso Systems and is finishing up his PhD in Dan Boneh’s applied cryptography group at Stanford. His research is focused on the science of blockchains using tools from applied cryptography, game theory, and consensus, and has already had a huge impact in the industry. His work includes Bulletproofs, one of the most widely used zero-knowledge proofs today; and verifiable delay functions, which are a fundamental component of ‘green’ blockchain consensus. 

"Scott Duke Kominers is the MBA Class of 1960 Associate Professor of Business Administration in the Entrepreneurial Management Unit at Harvard Business School and a Faculty Affiliate of the Harvard Department of Economics. He’s one of the best market design scholars in the world, and also advises a number of companies on real-world marketplace and incentive design, such as building reputation-based systems. He holds a PhD in Business Economics from Harvard.

"Valeria Nikolaenko joins from Novi at Meta, where she was a research scientist and cryptographer for the Diem blockchain, started by Facebook in 2019 as Libra. She specializes in modern cryptography, computer and web security, post-quantum cryptography, and is one of the world’s experts in proof-of-stake blockchain design. She has worked extensively on Schnorr signatures — including half-aggregation, threshold deterministic signing, and study of cryptographic libraries — and long-range attacks on proof-of-stake blockchains. She received a PhD in Computer Science from Stanford University, advised by Dan Boneh."

David Zuckerman defends his dissertation

 David Zuckerman defended his dissertation yesterday.

Here are the papers he defended:

Preferences for Compensatory and Retributive Justice

I experimentally investigate third-party preferences for victim compensation and offender punishment when one party has harmed another. I find that if the harm is intentional, third parties not only display an increased demand for punishment, but also an increased demand for compensation. I refer to these additional demands for punishment and compensation as the demand for retributive justice and compensatory justice, respectively. Demand for retributive justice is positively correlated with demand for compensatory justice. However, third parties do not treat the two types of justice as substitutes or complements. Moreover, I generally find that these types of justices do not take victim knowledge of offender punishment nor offender knowledge of victim compensation into account. I then extend my investigation to a risky setting, where the offender's action may or may not end up harming the victim. I find that for both compensation and punishment, not only does the intent behind the action matter, but the consequences of the action as well. However, this is primarily driven by third-party distributional preferences; the outcome does not seem to affect the demand for retributive or compensatory justice.

A Theory of Chosen Preferences

(with B. Douglas Bernheim, Luca Braghieri, and Alejandro Martínez) [Online Appendix] [2019 Working Paper Version]

American Economic Review, Vol. 111, No. 2 (February 2021), pages 720-754

We propose and develop a theory of preference formation based on the idea that people evaluate their lives according to worldviews that provide accounts of success and failure, and that they choose those worldviews subject to feasibility constraints. Our framework highlights the role of mindset ï¬,exibility, a trait that determines the relative weights the decision maker places on her current and anticipated worldviews when evaluating future outcomes. We show that our theory generates rich behavioral dynamics, thereby illuminating a wide range of applications and providing potential accounts for a variety of observed phenomena.

Unseen Preferences: Homophily in Friendship Networks

Revise and Resubmit, Journal of Economic Behavior and Organization

Homophily is typically measured using a single dimension to define groups. However, people generally display preferences over multiple dimensions. I develop a simple model that characterizes agents both by a (discrete) "type" and a (continuous) "personality" value. Agents have preferences-for-similarity over both dimensions, but homophily is only measured with respect to type. I identify sufficient conditions on preferences such that a strongly stable matching exists, and show via simulations that the friendship patterns generated by these matchings qualitatively line up with several patterns noted in the data. The matchings can be calculated via an algorithm where agents "search" through utility space for friends. Increasing costs to friendship cause both within-group and systematic across-group heterogeneity in the extent of students' search through utility space. Majority-group "outliers" - those who must search an extensive amount in utility space for friends - form a disproportionate number of cross-group friendships. These outliers are the key reason why mid-sized groups exhibit the highest levels of homophily bias, a distinctive feature noted in prior literature.

Mazel tov, David.  Welcome to the club.

High prices and moral outrage, by Elias, Lacetera, and Macis

 Is Uber-style surge pricing immoral, or efficient?  How about price rises during a pandemic? Does discussion of the economic consequences change the assessments of morality? Here's a new NBER paper:

Is the Price Right? The Role of Morals, Ideology, and Tradeoff Thinking in Explaining Reactions to Price Surges  by Julio J. Elias, Nicola Lacetera & Mario Macis, NBER WORKING PAPER 29963, DOI 10.3386/w29963, April 2022

Abstract: "Price surges often generate social disapproval and requests for regulation and price controls, but these interventions may cause inefficiencies and shortages. To study how individuals perceive and reason about sudden price increases for different products under different policy regimes, we conduct a survey experiment with Canadian and U.S. residents. Econometric and textual analyses indicate that prices are not seen just as signals of scarcity; they cause widespread opposition and strong and polarized moral reactions. However, acceptance of unregulated prices is higher when potential economic tradeoffs between unregulated and controlled prices are salient and when higher production costs contribute to the price increases. The salience of tradeoffs also reduces the polarization of moral judgments between supporters and opponents of unregulated pricing. In part, the acceptance of free price adjustments is driven by people’s overall attitudes about the function of markets and the government in society. These findings are corroborated by a donation experiment, and they suggest that awareness of the causes and potential consequences of price increases may induce less extreme views about the role of market institutions in governing the economy."

From the conclusions:

"Our findings support the claim that people do not perceive prices as only signals of relative scarcity, but they attribute moral valence to them. Consistent with prior studies, price spikes in response to demand increases receive widespread opposition and generates moral aversion, mainly out of concerns for fairness toward and exploitation of consumers. Moreover, underlying ideological positions about the role of the market (and the government) in society significantly affect the perceptions and acceptance of price surges. However, when made explicit, economic or tradeoff considerations substantially increase the public’s acceptance of price increases in response to demand surges. The reaction to these economic considerations also concerns moral judgments; tradeoff salience increases people’s acceptance of price surges and changes their moral reactions to these increases. When individuals are prompted to consider the economic consequences of freely adjusting prices versus price controls, their moral judgments are less radical and less different from one another. 

...

"Despite the large positive impact of explicit cost-benefit considerations on the acceptance of the free price mechanism to organize markets, most respondents, even when assigned to scenarios with salient tradeoffs, did not support a “laissez faire” solution to price surges. This suggests that this opposition is rooted in strong beliefs and norms whose violation could represent a cost to society. Policy choices and organizational practices that reduce the likelihood of price spikes may therefore be supported by the public."

Kim Krawiec interviews Sally Satel about kidneys

 Kim's podcast Taboo Trades adds a new interview and reminds you of two previous interviews, with kidney donors:

April 17, 2022

Kidneys with Sally Satel

I discuss what it's like to need (and receive) a life-saving kidney transplant with AEI's Sally Satel (a two-time kidney transplant patient) and UVA 3L, Caitlyn Stollings, who co-hosts this episode.

Dr. Satel is a resident scholar at the American Enterprise Institute and the staff psychiatrist at a local methadone clinic in Washington D.C. She was also an assistant professor of psychiatry at Yale University from 1988 to 1993 and remains a lecturer at Yale.

Importantly for our purposes, she is a two-time kidney transplant patient and has written widely about that experience. Dr. Satel is also the editor of When Altruism Isn’t Enough: The Case for Compensating Kidney Donors

 

This episode features a kidney recipient, but we've also done two episodes featuring Good Samaritan donors, here:

and here:

Posted by Kim Krawiec at 10:46 AM in Taboo Trades | Permalink

Frontiers of Economic Design (FED)--new online seminar series

Bumin Yenmez and Lars Ehlers announce a new seminar series:

Yenmez writes:

"Lars Ehlers and I are organizing a new online economic-design seminar series. The seminar will (1) meet bi-weekly, (2) have one established researcher and one postdoc or graduate student present at each meeting (45 minutes each), and (3) meet mostly on Fridays noon-1:45pm (EST). We would like to make the seminar especially attractive to young researchers and make it friendly.

 The first webinar will be on May 20. Al Roth (Stanford) and Ellen Victoria Muir (Stanford) will present at the first meeting. The second webinar will be on June 3. Aytek Erdil (Cambridge) and Aram Grigoryan (Duke) will present at the second meeting.

 The website for the webinar is: www.frontiersofeconomicdesign.com. Please register on the website if you would like to receive further communication from us including a Zoom link for meetings. You can also email to frontiersofeconomicdesign@gmail.com."

Here's the website:

Frontiers of Economic Design (FED)

"The goal of this seminar series is to bring young researchers in economic design and related areas together, to promote their work, and also to disseminate cutting-edge research. Each meeting will feature two presentations: one from an established researcher and one from a graduate student or post-doc. 

The first webinar is on May 20, 2022 between 12:00-1:45pm EST (9:00-10:45pm PST). We have two inaugural speakers:

Alvin Roth on "Controversial markets and the political economy of market design"

Ellen Victoria Muir on "Wage dispersion, minimum wages and involuntary unemployment: A mechanism design perspective" (joint with Simon Loertscher)"

2022 Easter Workshop on School Choice Belfast, April 25-26, 2022

 2022 Easter Workshop on School Choice Belfast, April 25-26, 2022

"In recent years, there has been a great deal of research activity to study and design systems to assign students to schools. Funded by the ESRC and the Leibniz Association, we are happy to organize a joint workshop with ZEW – Leibniz-Centre for European Economic Research to discuss the latest theoretical and empirical developments in the field.

"We are happy to announce that Professor Aytek Erdil will deliver a keynote presentation on a modern design for university admissions in the UK.

Here is the Program 

 Organisers:  Josue Ortega and Thilo Klein

HT: Bertan Turhan

Kidney transplant events--call for participants

 Here's a collection of events in which people interested in kidney transplantation can participate.  I'll give a short talk on kidney exchange in the May 7 event.  There are also events tomorrow, April 23, and June 12, as well as ways to help particular transplant candidates who you know.

Evolving National Perspectives In Kidney Transplant Symposium Is Rewarding Living Kidney Donors Medically Unethical?   Date: Saturday, May 7, 2022 7AM PDT | 9AM CDT | 10AM EDT This symposium is approximately 3.5 hours   Noted speakers include Oxford philosopher and ethicist J.R. Richards and Nobel Laureate Alvin Roth. Currently it is illegal for the donor or donor’s family to receive anything of value in exchange for an organ. The one policy that has not been considered to increase the donor supply and which probably has the most potential is to offer a reward or some other compensation to the donor. The primary argument offered by those opposed to rewarding the donor is that it is medically unethical? The primary purpose of this symposium is addressing this issue of whether rewarding the donor is medically unethical.   In addition to the medical ethics question, this symposium will have presentations by experts in the field of transplantation on related questions including:   The cost benefit question; The risks and safety of donation; Immediate options to increase organ donation; The very recent development of organ sharing; U.S. public attitudes towards rewarding the donor; The experiences of a living donor; The limits of increasing the count of deceased donors. INTENDED AUDIENCE: This virtual event is designed for surgeons, physicians, policy analysts, and health care professionals dedicated to the treatment of chronic kidney failure. This symposium is sponsored by the University of Chicago Transplant Institute, the National Kidney Donation Organization (NKDO), and Waitlist Zero.   View Symposium Flyer   View University of Chicago Course Page   Join Symposium Virtually Here, For Free       Join the Transplant Village Trotters Team for the NKFI Kidney Walk in Chicago Walk for Kidneys is a family-friendly celebration of passion and progress. This annual event is an incredible opportunity for supporters of the NKFI to come together, show their spirit, and demonstrate their determination to make a difference in the fight against kidney disease.  Join our Transplant Village Team, "The Transplant Village Trotters," as we support the NKFI mission for this festive two-mile walk.  Proceeds support research, public education, and patient services.   Join The Transplant Village Trotters Team!       Living Donor Meet-up in Chicago   Come join fellow living donors for a fun-filled day of events in Chicago on April 23rd!  This informal and laid back event is a great opportunity to hang out with other living donors and enjoy Chicago on what looks like will be a beautiful day.  No registration needed just show up and feel free to bring friends and family!   Living Donors 5th Meetup Facebook Page     Are you or somebody you love in need of a living kidney donor? The Kidney Champion Program will help you learn ways you can find your living kidney donor. The program is run entirely by living kidney donors, transplant recipients, and caregivers who want to share their experiences with you. During this program, you will learn skills to effectively tell your story and lessen your fear of asking for a living donor.  You will learn specific strategies on how you can use social media to share your story.  The Kidney Champion Program was created through a 3-way partnership between the Northwestern Medicine Organ Transplant Center, Transplant Village, and the Living Kidney Donors Network. This program was developed with you in mind. We want to help you be an active part of your kidney transplant journey. We have found that when people needing a kidney transplant put forth the effort and drive the process, they can find a living kidney donor. Feel free to invite your entire care team- whether you are in need of a lifesaving transplant yourself or are trying to support someone in need, this program offers education and strategies that your entire care team can employ to help you on your journey!     Sign up for the Kidney Champion Program

Afghanistan’s trade in organs--and children

 Here's the story in the WSJ:

‘No Father Wants to Sell His Son’s Kidney.’ Afghans Pushed to Desperate Measures to Survive. Afghanistan’s deepening humanitarian crisis fuels booming organ trade  By Sune Engel Rasmussen

"For those willing, an illegal but barely hidden business in the western city of Herat offers a reprieve from the downward spiral. Two hospitals in town offer kidney transplants that attract Afghans from across the country, performing 15-20 surgeries a month. Officials turn a blind eye. Buying and selling organs is illegal, as in most other countries. But scores of Afghans have come here to make the trade.

...

"Finding a seller of a kidney isn’t hard. Notes advertising private organ sales are plastered on walls and lampposts in Herat and other cities. Kidney brokers distribute business cards offering to put buyers in touch with sellers.

...

"Mr. Mohammad and his wife decided that unless they sold a child, they would have to sell an organ. Both of them were unsuited, as Mr. Mohammad had kidney stones and his wife had diabetes. Their oldest son made up to three dollars a day collecting plastic for recycling, so was spared. The choice fell on Khalil Ahmad, their second son.

...

"Ghulam Hossein came to Herat from the eastern Nangarhar province after a doctor told him his kidneys were failing. It took him 25 days to find a seller.

“I have no words to thank this man,” Mr. Hossein said about the donor, who needed money after being forced to sell his small grocery store, and who visited Mr. Hossein after the operation.

“I know he was poor but it takes huge courage and sacrifice to sell your kidney,” Mr. Hossein said. “I am more concerned now about his health than my own.”

*********

Here's an earlier story from the Guardian:

I’ve already sold my daughters; now, my kidney’: winter in Afghanistan’s slums. Crushing poverty is forcing starving displaced people to make desperate choices  by  M Mursal and Zahra Nader, 23 Jan 2022

“I was forced to sell two of my daughters, an eight-by and six-year-old,” she says. Rahmati says she sold her daughters a few months ago for 100,000 afghani each (roughly £700), to families she doesn’t know. Her daughters will stay with her until they reach puberty and then be handed over to strangers.

"It is not uncommon in Afghanistan to arrange the sale of a daughter into a future marriage but raise her at home until it is time for her to leave. However, as the country’s economic crisis deepens, families are reporting that they are handing children over at an increasingly young age because they cannot afford to feed them.

"Yet, selling her daughters’ future was not the only agonising decision Rahmati was forced to make. “Because of debt and hunger I was forced to sell my kidney,” she tells Rukhshana Media from outside her home in the Herat slum."

********

And from the BMJ:

Afghans driven to sell kidneys on black market in the face of extreme poverty BMJ 2022; 376 doi: https://doi.org/10.1136/bmj.o587 (Published 04 March 2022)  by Gareth Iacobucci

"People in Afghanistan are resorting to selling their kidneys on the black market to feed their families as the country faces extreme poverty.

"The United Nations estimates that 24 million people in Afghanistan—more than half of the population—are in need of lifesaving humanitarian aid. This is 30% higher than in 2021 when the Taliban seized control of the country.

"Illegal organ trading already existed in Afghanistan before the Taliban’s takeover, but a combination of economic sanctions, severe drought, and covid-19 have led to the black market surging as many more people experience extreme poverty.

"A lot of the trade is focused in the western city of Herat, close to the border with Iran."

Stanford celebrates Guido Imbens (and natural experiments)

Here's a nice article about Guido Imbens in the Stanford GSB magazine:

An Unexpected Result: How Nobelist Guido Imbens Helped Kick-Start the “Credibility Revolution”  Years of patient collaboration generated insights that have narrowed the gap between economics and the real world.  April 15, 2022  | by Julia Kane

"Imbens had been sitting in his office in Harvard’s economics department, thinking about the problem for so long that his head hurt. When the seed of an idea popped into his mind, he jotted down some notes, paused, and realized, “This is pretty much the best thought I’ve had.”

...

“Nobody had really started off on that journey thinking that this is where it would go,” Imbens says, “but this does feel like an end to a journey — a very unexpected end."

Legal marijuana in New Jersey

 The NY Times has the story:

Legal Marijuana Sales Will Start Next Thursday in New Jersey. All adults will be able to purchase cannabis at certain medical-marijuana dispensaries starting April 21.  By Tracey Tully

"The first sales of recreational, adult-use cannabis in New Jersey will start next Thursday, marking the culmination of a yearslong effort to legalize marijuana and to curtail the racially unbalanced penalties for possessing the drug.

"At least a half-dozen medical-marijuana dispensaries are planning to open their doors to all adults on April 21 after winning final approval this week from New Jersey’s Cannabis Regulatory Commission.

...

"“The end of prohibition is coming to New Jersey,” said Ben Kovler, chief executive of Green Thumb Industries, which operates both dispensaries. “We’re prepared for a tidal wave of demand.”

"He estimated that New Jersey, the second state on the East Coast to begin adult-use sales, could eventually become a $3 billion industry.

“The war on drugs was a failure for people of color,” he said. “This is going to create a lot of wealth, for a lot of people.”

...

"New Jersey voters approved a referendum legalizing marijuana in November 2020, but it was not until this week that the commission established a pathway for the first legal sales of adult-use, recreational cannabis."

NYC plugs a school choice leak (of random numbers)

 Some time ago, Esther Duflo likened market design to plumbing. I think she had in mind construction plumbing, making sure the pipes are all tight. But there's also maintenance (and home repair) plumbing, which involves plugging new leaks.  Parag Pathak alerts me to such an issue in New York City's school choice system.

The NY Post has the story:

Parents uncover major glitch in NYC school lottery system  By Susan Edelman 

"A Manhattan mom discovered an embarrassing glitch in the city Department of Education lottery system used to match students with middle and high schools.

"When NYC students filled out their online applications for 2022-23, each kid automatically received a long string of random numbers from 0 to 9 mixed with lower-case letters from a to f. 

"The random numbers are used to determine the order in which students are matched to programs.

"Lottery numbers starting with 0 are most likely to land students in a school at the top of their list – 8th graders can rank up to 12 preferred high schools. 

...

"But as one 8th-grader’s mom figured out, if students canceled and re-started their applications – as the DOE permitted – they received a different lottery number each time. The loophole allowed users to potentially game the system by simply re-applying until a favorable lottery number popped up.

"Parent leaders alerted the DOE’s Chief Enrollment Officer, Sarah Kleinhandler, who was unaware of the snafu and promised to look into it. She did.

...

"The DOE said it was able to identify 163 students who received new lottery numbers – less than 1 percent of applicants. They included 121 students out of 71,000 high-school applicants, and 42 students out of 58,000 middle school applicants, a spokesman said.

"Students who received new lottery numbers after restarting their applications will get their first lottery numbers back, a spokeswoman told The Post."

**********

Speaking of home repairs, here's an earlier post about some self inflicted problems:

Tuesday, May 12, 2020

Confusion in NYC high school wait lists