Experimental Economics sessions at Stanford (SITE) this summer

Here's the preliminary program for this summer's experimental economics at Stanford. 

Session 13: Experimental Economics

Thu, Aug 22 2024, 8:00am - Fri, Aug 23 2024, 5:00pm PDT

John A. and Cynthia Fry Gunn Building, 366 Galvez Street, Stanford, CA 94035

ORGANIZED BY

Christine Exley, University of Michigan

Judd Kessler, University of Pennsylvania

Muriel Niederle, Stanford University

Alvin Roth, Stanford University

Lise Vesterlund, University of Pittsburgh

This workshop will be dedicated to advances in experimental economics combining laboratory and field-experimental methodologies with theoretical and psychological insights on decision-making, strategic interaction and policy. We would invite papers in lab experiments, field experiments and their combination that test theory, demonstrate the importance of psychological phenomena, and explore social and policy issues. In addition to senior faculty members, invited presenters will include junior faculty as well as graduate students.

Thursday, August 22, 2024

9:30 AM - 10:00 AM PDT

Check-In & Breakfast

10:00 AM - 10:30 AM PDT

Flexible Pay and Labor Supply: Evidence from Uber’s Instant Pay

Presented by: Keith Chen (University of California, Los Angeles)

Co-author(s): Katherine Feinerman (University of California, Los Angeles) and Kareem Haggag (University of California, Los Angeles)

Modern tech platforms provide workers real-time control over when they work, and increasingly, flexible pay: the option to be paid immediately after work. We investigate the labor supply effects of pay flexibility and the implications of present-biased preferences among gig-economy workers. Using granular data from a nationwide randomized controlled trial at Uber, we estimate the effects of switching from a fixed weekly pay schedule to Instant Pay, a system that allows on-demand, within-day withdrawals. We find that flexible pay substantially increased both drivers’ work time and earnings (ITT 2%; TOT: 18-37%). Furthermore, the response is significantly higher when drivers are further away from the end of their counterfactual weekly pay cycle, aligning with predictions of hyperbolic discounting models. We discuss welfare and broader implications in contexts in which workers have the ability to flexibly supply labor.

10:30 AM - 10:45 AM PDT

Eviction as Bargaining Failure: Hostility and Misperceptions in the Rental Housing Market

Presented by: Charlie Rafkin (Massachusetts Institute of Technology)

Co-author(s): Evan Soltas (Massachusetts Institute of Technology)

Court evictions from rental housing are common but could be avoided if landlords and tenants bargained instead. Such evictions are inefficient if they are costlier than bargaining. We test for two potential causes of inefficient eviction — hostile social preferences and misperceptions — by conducting lab-in-the-field experiments in Memphis, Tennessee with 1,808 tenants at risk of eviction and 371 landlords of at-risk tenants. We detect heterogeneous social preferences: 24% of tenants and 15% of landlords exhibit hostility, giving up money to hurt the other in real-stakes Dictator Games, yet more than 50% of both are highly altruistic. Both parties misperceive court or bargaining payoffs in ways that undermine bargaining. Motivated by the possibility of inefficient eviction, we evaluate the Emergency Rental Assistance Program, a prominent policy intervention, and find small impacts on eviction in an event-study design. To quantify the share of evictions that are inefficient, we estimate a bargaining model using the lab-in-the-field and event-study evidence. Due to hostile social preferences and misperceptions, one in four evictions results from inefficient bargaining failure. More than half would be inefficient without altruism. Social preferences weaken policy: participation in emergency rental assistance is selected on social preferences, which attenuates the program’s impacts despite the presence of inefficiency.

10:45 AM - 11:00 AM PDT

Workplace Hostility

Presented by: Manuela Collis (University of Toronto)

Co-author(s): Clémentine Van Effenterre (University of Toronto)

We conduct a choice experiment with 2,048 participants, recruited among upper-year students, recent graduates, and alums from a large public university, to understand how much individuals value a workplace free of hostility and whether this can be offset with hybrid or solo work arrangements. In the experiment, we ask respondents to choose between two job offers for thirteen distinct and realistic scenarios. Our experiment shows that people are willing to forgo a significant portion of their earnings to avoid hostile work environments—15 to 30 percent of their wage. Women report a stronger preference for inclusive workplaces and environments free of sexual harassment. We also find that women value hybrid work twice as much in the presence of sexual harassment and value teamwork more in non-inclusive environments. Based on these findings, we introduce a model of compensating differentials to understand how the presence of hostility shapes the demand for alternative work arrangements and to implement policy counterfactuals.

11:00 AM - 11:30 AM PDT  Coffee Break

11:30 AM - 12:00 PM PDT

Why Exclude Test Scores from Admission Decisions?

Presented by: Yucheng Liang (Carnegie Mellon University)

Co-author(s): Wenzhuo Xu (Carnegie Mellon University)

One major argument in support of test-optional and test-blind college admission policies is that standardized test scores inaccurately reflect students’ abilities and are biased against those with fewer resources. This argument goes against standard economic reasoning as information, even if noisy or biased, never has negative value. In an experiment, we show that participants responsible for admitting students for an educational opportunity are indeed willing to exclude invalid or biased test scores from their admission criteria. This result is primarily driven by procedural fairness concerns and an underestimation of the scores’ usefulness. However, this underestimation can be mitigated through experience in making admission decisions both with and without these test scores.

12:00 PM - 12:30 PM PDT

Mechanism Design for Personalized Policy: A Field Experiment Incentivizing Exercise

Presented by: Rebecca Dizon-Ross (University of Chicago)

Co-author(s): Ariel Zucker(University of California, Santa Cruz)

Personalizing policies can theoretically increase their effectiveness. However, personalization is difficult when individual types are unobservable and the preferences of policymakers and individuals are not aligned, which could cause individuals to mis-report their type. Mechanism design offers a strategy to overcome this issue: offer a menu of policy choices, and make it incentive-compatible for participants to choose the “right” variant. Using a field experiment that personalized incentives for exercise among 6,800 adults with diabetes and hypertension in urban India, we show that personalizing with an incentive-compatible choice menu substantially improves program performance, increasing the treatment e↵ect of incentives on exercise by 80% with-out increasing program costs relative to a one-size-fits-all benchmark. Personalizing with mechanism design also performs well relative to another potential strategy for personalization: assigning policy variants based on observables.

2:00 PM - 2:30 PM PDT

What Money Shouldn’t Buy: Aversion to Monetary Incentives for Health Behaviors

Presented by: Florian H. Schneider (University of Copenhagen)

Co-author(s): Pol Campos-Mercade (Lund University and Institute for Future Studies), Armando Meier (University of Basel) and Roberto A. Weber (University of Zurich)

We study attitudes towards offering monetary payments for health behaviors, aiming to understand how such attitudes may influence the use of monetary incentives as a policy instrument. We develop the Policy Lab, an experimental paradigm in which participants decide whether to provide a set of others with monetary incentives for vaccination. In two studies with representative samples of the Swedish population (N=2,010) and one with Swedish policymakers (N=2,008), a majority of participants oppose using direct financial incentives. Despite the widespread perception that such incentives are an effective policy instrument, opposition to their use is driven by perceptions that they are coercive and unethical. Policymakers are, if anything, slightly more opposed to the use of direct financial incentives. We also document that opposition to incentives extends beyond vaccination to other health domains. Our findings suggest that public opposition to the use of monetary incentives as a policy instrument may create barriers to their adoption.

2:30 PM - 3:00 PM PDT

Goals, Expectations, and Performance

Presented by: Alexandra Steiny Wellsjo (University of California, San Diego)

Co-author(s): Avner Strulov-Shlain (University of Chicago)

People and organizations often set goals to self-motivate and achieve better outcomes in challenging tasks. But goals, and their effectiveness, might depend on what people expect to happen. Do goals reflect expectations or do goals set expectations? How do goals and expectations affect performance? We run an online real-effort task to answer these two questions by introducing exogenous variation in goals and expectations. First, we find that goals mostly reflect expectations rather than affect them. Second, practicing an easier version of a task leads to higher expectations and higher performance. Eliciting a goal leads to higher performance as well. However, controlling for expectations, changing the difficulty of the goal has no discernible effect. These results suggest that people should come in optimistic and set a goal, but they cannot fool themselves into expecting and doing more simply by choosing a higher goal.

3:00 PM - 3:30 PM PDT

Coffee Break

3:30 PM - 4:00 PM PDT

Understanding Expert Choices Using Decision Time

Presented by: Stefano DellaVigna (University of California, Berkeley)

Co-author(s): David Card (University of California, Berkeley), Chenxi Jiang (University of California, Berkeley), and Dmitry Taubinsky (University of California, Berkeley)

Laboratory experiments find a robust relationship between decision times and perceived values of alternatives. This paper investigates how these findings translate to experts’ decision making and information acquisition in the field. In a stylized model of expert choice between two alternatives, we show that (i) less-commonly chosen al- ternatives are more likely to be chosen later than earlier; (ii) decision time is higher when the likelihood of choosing each alternative is closer to fifty percent; and (iii) the ultimate quality of the chosen alternative may increase or decrease with decision time, depending on whether earlier or later signals are more informative. We test these pre-dictions in the editorial setting, where we observe proxies for paper quality and signals available to editors. We document that (i) the probability of a positive decision rises with decision time; (ii) average decision time is higher when our estimated probability of a positive decision is closer to fifty percent; and (iii) paper quality is positively (negatively) related to decision time for papers with Reject (R&R) decisions. Structural estimates show that the additional information acquired in editorial delays is modest, and has little impact on the quality of decisions.

4:00 PM - 4:15 PM PDT

Choosing Between Information Bundles

Presented by: Menglong Guan (Penn State University)

This paper presents an experimental study on how people choose sets of information sources (referred to as information bundles). The findings reveal that subjects frequently fail to choose the more instrumentally valuable bundle in binary choices, largely due to the challenge of integrating the information sources within a bundle to identify their joint information content. The mistakes in choices can not be attributed to an inability to use information bundles. Instead, these mistakes are strongly ex-plained by subjects’ tendency to follow a simple but imperfect heuristic when valuing them, which I call “common source cancellation (CSC)”. The heuristic causes subjects to mistakenly disregard the common information source in two bundles and focus solely on the comparison of the sources that the two bundles do not share. As a result, choices between information bundles are made without adequately considering the joint information content of each bundle. Notably, CSC emerges as a robust explanation for the information bundle choices for all subjects, including those who make perfect use of information bundles to make inferences.

4:15 PM - 4:30 PM PDT

Persuasion through Simulation

Presented by: John J. Conlon (Stanford University)

Co-author(s): Spencer Y. Kwon (Brown University)

We describe and experimentally test a model where an agent facing a complex decision forms beliefs by sampling or “simulating” relevant scenarios. Crucially, simulation is subject to cuing: scenarios similar to the agent’s current context are more easily simulated, and a persuader can manipulate the agents’ beliefs by altering this context. Even objectively uninformative messages simply highlighting known scenarios can be persuasive if they facilitate simulation of otherwise neglected scenarios. Experimentally, participants’ beliefs (about a lottery outcome and about others’ actions in a dictator game) are highly susceptible to such persuasion through simulation. We then study a consumer choice setting where a firm can cue its potential customers with particular scenarios and designs products with such “advertising” in mind. The firm chooses to highlight a single most compelling scenario and produces excessively “specialized” goods, with utility concentrated in scenarios its ads target. When the firm produces multiple goods, it additionally needs to consider how their ads cue each other. This force generates endogenous brands: products that the firm chooses to associate or dissociate depending on which scenarios it wants its consumers to simulate.

Friday, August 23, 2024

10:00 AM - 10:30 AM PDT

Who You Gonna Call? Gender Inequality in External Demand For Parental Involvement

Presented by: Olga Stoddard (Brigham Young University)

Co-author(s): Kristy Buzard (Syracuse University) and Laura K. Gee (Tufts University)

Gender imbalance in time spent on children causes labor market gender inequalities. We investigate a novel source of this inequality: external demands for parental involvement. We pair a theoretical model with a large-scale field experiment with a near-universe of US schools. Schools receive an email from a two-parent household and are asked to contact one parent. Mothers are 1.4 times more likely than fathers to be contacted. We decompose this inequality into discrimination stemming from differential beliefs about parents’ responsiveness versus other factors, including gender norms. Our findings underscore how agents outside the household contribute to gender inequalities.

10:30 AM - 11:00 AM PDT

Precautionary Debt Capacity

Presented by: Olivia Kim (Harvard University)

Co-author(s): Deniz Aydin (Washington University in St. Louis)

Firms with ample financial slack are unconstrained... or are they? In a field experiment that randomly expands debt capacity on business credit lines, treated small-and-medium enterprises (SMEs) draw down 35 cents on the dollar of expanded debt capacity in the short-run and 55 cents in the long-run despite having debt levels far below their borrowing limit before the intervention. SMEs direct new borrowing to financing investment gradually over time and do not exhibit a measurable impact on delinquencies. Heterogeneity analysis by the risk of being at the credit line limit supports the SME motive to preserve financial flexibility.

11:00 AM - 11:30 AM PDT

Coffee Break

11:30 AM - 12:00 PM PDT

Pushing the Envelope: The Effects of Negotiating

Presented by: Zoë Cullen (Harvard University)

12:00 PM - 12:30 PM PDT

Gender Diversity Improves Academic Performance

Presented by: Xiaoyue Shan (National University of Singapore)

This paper uses a field experiment in a first-semester course at a Swiss university to examine the impact of gender diversity on academic performance. 2,580 students across six cohorts are randomly assigned into 645 study groups with varying gender composition. Results show that group gender diversity significantly raises students’ course performance, especially for men. Moving from homogeneous to gender-balanced groups increases course grade by about 15% standard deviations. Analyses of mechanisms reveal that diversity enhances peer-to-peer interaction and students’ mental health, self-esteem, self-confidence, and group satisfaction. Diversity appears to lower women’s study effort and leads them to hold significantly more traditional gender attitudes, which may have limited diversity’s impact on their performance. The findings of this paper highlight the value of gender diversity in improving student performance and well-being in higher education.

12:30 PM - 2:00 PM PDT  Lunch

2:00 PM - 2:30 PM PDT

Over- and Underreaction to Information

Presented by: Cuimin Ba (University of Pittsburgh)

Co-author(s): J. Aislinn Bohren (University of Pennslyvania) and Alex Imas (University of Chicago)

This paper explores the impact of the learning environment on how people react to information. We develop a model of belief-updating where people respond to complexity by forming a representation of the environment that channels attention to states that are most salient given the observed information. They then use this distorted representation to process the information using Bayes’ rule, subject to cognitive imprecision. The model predicts overreaction when environments are complex, signals are noisy, or priors are concentrated on less salient states; it predicts underreaction when environments are simple, signals are precise, or priors concentrated on salient states. Results from a series of pre-registered experiments provide support for these predictions and demonstrate their robustness across different learning environments and decision domains. We then provide evidence for the specific cognitive mechanisms by manipulating attention and salience directly. We also show that the proposed model is highly complete in capturing explainable variation in belief-updating; moreover, the interaction between psychological mechanisms is critical to explaining belief data in more complex settings. These results connect disparate findings in prior work: underreaction is typically found in laboratory studies, which feature simple learning settings, while overreaction is prevalent in financial markets, which feature more complex environments.

2:30 PM - 3:00 PM PDT

Numbers Tell, Words Sell

Presented by: Michael Thaler (University College London)

Co-author(s): Mattie Toma (University of Warwick) and Victor Yaneng Wang (University of Oxford)

3:00 PM - 3:30 PM PDT

Coffee Break

3:30 PM - 4:00 PM PDT

A competitive world

Presented by: Bertil Tungodden (NHH Norwegian School of Economics)

Co-author(s): Thomas Buser (University of Amsterdam), Alexander W. Cappelen (NHH Norwegian School of Economics), and Uri Gneezy (University of California, San Diego)

We elicit willingness to compete in large and representative samples in 62 countries covering all continents. We also shed light on the socialization of boys and girls around the globe by eliciting the importance adults attach to boys’ and girls’ willingness to compete. Globally, a clear majority of people are willing to compete against others and find it important that children are willing to compete. Nevertheless, the shares vary strongly across countries and we show that this variation is correlated with inequality: people in more unequal countries are more competitive and find it more important that children are willing to compete. We also document some near-universal patterns that replicate the main findings of the competitiveness literature at a global scale: in all but one country, men are more competitive than women, and in the vast majority of countries willingness to compete is positively associated with income and level of education. Despite the near-universal gender gap in competitiveness among adults, people in many – mostly Western – countries place greater importance on girls’ than boys’ willingness to compete.

4:00 PM - 4:15 PM PDT

Breaking the Spiral of Silence

Presented by: Yihong Huang (Harvard University)

Co-author(s): Yuen Ho (University of California, Berkeley)

The Spiral of Silence theory plays a crucial role in contemporary political discourse. According to this idea, people who hold views perceived as socially inappropriate tend to self-censor, generating a distribution of expressed views that is skewed towards appropriate opinions. If the attention paid to silence is limited, this can exacerbate self-censorship and create an equilibrium where only socially appropriate views are expressed and considered dominant. We experimentally test this hypothesis based on a simple model in which self-censorship and limited attention to silence interact to jointly establish equilibrium norms. In our experiment, UC Berkeley undergraduates discuss controversial political and socioeconomic issues. Students with socially inappropriate views self-censor to a significant degree. Given the limited attention students pay to silence, self-censorship amplifies over time. We experimentally increase the salience of silence, and show that this affects both beliefs about others’ views and public expression decisions. Because inference and expression amplify each other, different levels of attention to silence can produce divergent perceived social norms in equilibrium.

4:15 PM - 4:30 PM PDT

Social Media and Job Market Success: A Field Experiment on Twitter

Presented by: Jingyi Qiu (University of Michigan)

Co-author(s): Yan Chen (University of Michigan), Alain Cohn (University of Michigan), and Alvin Roth (Stanford University)

We conducted a field experiment on Twitter to examine how social media promotion affects job market outcomes in economics. We tweeted 519 candidates’ job market papers from our research account and randomly assigned half of these tweets to be quote-tweeted by prominent economists in their fields. We find that the quote-tweeted papers received 442% more views and 303% more likes on Twitter. Further- more, treatment group candidates received one more flyout, whereas treatment group women received 0.9 more job offers. Our results suggest that social media promotion can improve the visibility and success of job market candidates, especially women.

How frequently can whole blood safely be donated?

 Maybe only twice a year for people who don't take iron supplements, according to this recent comment (on a randomized trial in the Netherlands).

Protecting the blood donor: ferritin-based intervals to improve donor health, by Laura Infanti, Lancet (online first) Published:June 13, 2024DOI:https://doi.org/10.1016/S0140-6736(24)01212-1

"Strict eligibility criteria and the ageing of the general population are among the main factors limiting blood donor availability,1 and render the retention of experienced donors and the acquisition of new volunteers a demanding task. Also, a temporary inability to give blood (eg, due to recent travel or a medical condition) can be a reason for abandoning blood donation permanently.2 Blood establishments are constantly making efforts to counteract blood shortages and the overall declining trends in donations.

"In this context, low haemoglobin concentration, which is the most common reason for donation deferral, is a key risk factor for the loss of active volunteers. Due to the loss of 220–250 mg of iron with each whole-blood donation, iron deficiency with or without anaemia is the most important side-effect of blood donation.

...

"A strong predictor of iron deficiency is the interval between donations. For healthy individuals not taking iron supplementation, recovering iron stores after the drawing of 450–500 mL of blood requires at least 180 days.6 Several observational studies questioned the minimal donation interval allowed by regulation as being too short for preventing iron deprivation,7 and the randomised INTERVAL study showed that shorter donation intervals, although increasing blood procurement, resulted in more frequent haemoglobin deferrals.8 Indeed, ensuring a sufficient blood supply and protecting healthy volunteers at the same time is very difficult. Thus, despite available evidence, European and US regulations permit whole-blood donations up to once every 56 days for both sexes, although at a maximum of six donations per year for male donors and four donations per year for female donors in Europe.

Here's the study itself:

• Meulenbeld A, 
• Ramondt S. 
• Sweegers MG
• , et al.

Effectiveness of ferritin-guided donation intervals in whole-blood donors in the Netherlands (FIND'EM): a stepped-wedge cluster-randomised trial.

Lancet. 2024; (published online June 13.)

https://doi.org/10.1016/S0140-6736(24)01085-7

Kidney transplants for cats

 Kidney transplants for cats are a thing, and they all take the form of kidney exchange with a very short chain, in which the lives of two cats are saved. The donor cat is either an unadopted cat from a 'kill shelter,' or a veteran of a medical research trial, who (as the story below says) would otherwise face a "bleak future." But when such a cat becomes a living kidney donor, it is adopted into the family of the cat who receives the transplant (and I guess it goes without saying that they love cats..)

The Washington Post has the story

.Cat kidney transplants: For some, the pricey procedure is well worth it. The surgery can cost up to $25,000. “I just spent $17,000 on my roof, and I love my cat a lot more than my roof,” one person said.  By Marlene Cimons

"Segal, then living in the Boston area, drove his cat to the University of Pennsylvania School of Veterinary Medicine in Philadelphia where Despy underwent a kidney transplant in 2018. Today, Despy is thriving. So is Stevie, the kidney donor cat from a local shelter that Segal agreed to adopt as part of the renal transplant.

...

"Chronic kidney disease is one of the most common conditions in aging cats and a leading cause of death. The disease can be heritable, afflicting young cats such as Despy, and can result from toxin exposure, such as eating lilies.

...

"Like humans, cats have two kidneys, which filter waste from the body, and can live with just one if that kidney is healthy.

"Kidney transplants in cats began more than 25 years ago, although they still are rare, and only three facilities perform them: Penn Vet, the University of Wisconsin School of Veterinary Medicine and the University of Georgia College of Veterinary Medicine.

"Penn Vet has performed 185 transplants since 1998, the Georgia school more than 40 since 2009, and Wisconsin 87 since 1996.

...

"Many pet health insurance companies will cover some of the costs for the recipient, but usually not for the donor because “the donor is not the insured pet,” according to the North American Pet Health Insurance Association. The cost for the donor surgery to harvest the kidney is about 25 percent of the $25,000 total, Aronson says.

...

"Matching is easier for cats than it is for humans needing a transplant because there are only two blood types among all cats.

"Donors come from cat research breeding facilities or shelters, where they might otherwise have a bleak future, and families whose cats undergo transplants must adopt the donors. “For the cost of a kidney, [the donor cats] get to move in with a cat-loving household and are universally loved by their new adoptive families,” Schmiedt says.

...

"Transplants other than kidneys in pets aren’t viable because most require the death of the donor. Kidney transplants in dogs can be challenging because, unlike cats, they often suffer problems with immunosuppression, says Aronson, who has performed three. (The dogs survived but did not do as well long-term as cats, she says.)

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Earlier

Monday, November 23, 2020

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

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

Centralized assignment mechanisms that don't include all the relevant choices, by Kapor, Karnani and Neilson in the JPE

 One of the issues in organizing a centralized matching mechanism is to make the market thick, by including all or most of the relevant choices in the centralized system.  If not, there will be transactions outside of the centralized marketplace, and some of them may be costly to the system.

Here's a paper that explores that in the context of  college admissions in Chile.

Aftermarket Frictions and the Cost of Off-Platform Options in Centralized Assignment Mechanisms, by Adam Kapor, Mohit Karnani, and Christopher Neilson, Journal of Political Economy, forthcoming.

Abstract: "We study the welfare and human capital impacts of colleges’ (non)participation in Chile’s centralized higher-education platform, leveraging administrative data and two policy changes: the introduction of a large scholarship program and the inclusion of additional institutions, which raised the number of on-platform slots by approximately 40%. We first show that the expansion of the platform raised on-time graduation rates. We then develop and estimate a model of college applications, offers, wait lists, matriculation, and graduation. When the platform expands, welfare increases, and welfare, enrollment, and graduation rates are less sensitive to off-platform frictions. Gains are larger for students from lower-socioeconomic-status backgrounds."

"in virtually every practical implementation there exist many off-platform options that are available to participants of the match. In primary and secondary education, these include private schools or charter schools that do not participate in the centralized system. In other cases, such as higher education, some providers may be excluded from the platform by regulation, while others may choose not to participate. When off-platform options exist, applicants may renege on their assigned matches in favor of programs that did not participate in the centralized process. In turn, these decisions lead to the use of wait lists and aftermarkets, which may be inefficient due to the presence of congestion and matching frictions and can be inequitable if some students are better able to navigate this partially decentralized process, negating some of the benefits of the match.

"In this paper, we study the empirical relevance of the configuration of on- and off-platform options for students’ welfare and for persistence and graduation in higher-education programs. We document the importance of negative externalities generated by off-platform options and quantify a measure of aftermarket frictions that contribute to generating them in practice. Our empirical application uses data from the centralized assignment system for higher education in Chile, which has one of the world’s longest-running college assignment mechanisms based on the deferred-acceptance (DA) algorithm.2 We take advantage of a recent policy change that increased the number of on-platform institutions from 25 to 33, raising the number of available slots by approximately 40%. We first present an analysis of the policy, which shows that when these options are included on the centralized platform, students start college sooner, are less likely to drop out, and are more likely to graduate within 7 years. Importantly, these effects are larger for students from lower-socioeconomic-status (SES) backgrounds, suggesting that the design of platforms can have effects on both efficiency and equity.

...

"We find that when students are allowed to express their preferences for a larger variety of options on the platform, welfare increases substantially, as does the share of students graduating on time.

...

"Intuitively, when a desirable program is not on the platform, it can cause some students who would have placed in that program to instead receive a placement in a different program available on the platform. These students may then decline that placement in favor of the off-platform program, creating vacancies that in turn lead to increased reliance on wait lists, which may be subject to frictions. Moreover, the absence of a particular program may distort the placements of other students, even if the students whose placements are affected would never enroll in that program. These students may also be less satisfied and more likely to decline their placement.

"Taken together, our results show empirically that the existence of off-platform options affects the equity and efficiency of centralized assignment systems. "

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Earlier (with some links to still earlier papers):

Monday, May 9, 2022

School choice with outside options , by Akbarpour, Kapor, Neilson, van Dijk, and Zimmerman in J.Pub.E.

Kidneys for Communities and first responders

The Police Benevolent Association of the City of New York receives national award for helping its members and first responders nationwide battling kidney disease

CLEVELAND, June 14, 2024 /PRNewswire/ -- The Police Benevolent Association of the City of New York (PBA) has been honored with the Kidneys for Communities National Community Impact Award in recognition of its dedication and commitment to promoting living kidney donation and supporting the organization's members who are living with kidney disease.

Kidneys for Communities, a national community-directed donation program, launched its Kidneys for First Responders program with the PBA in June 2023 after New York City police officer Melissa Quinones' successful living kidney transplant. Since then, Kidneys for Communities has worked with first responder organizations to help members and their families who are in need of a lifesaving kidney transplant.

Kidneys for First Responders provides access to and facilitates living kidney donations by connecting people from around the country who want to help first responders with those who need lifesaving kidneys. The program is based on the Community-Directed Donation model that leverages individuals' affinity with membership-based communities.

Ira Brody, Co-Founder of Kidneys for Communities, presented PBA President Patrick Hendry with the National Community Impact Award at the NYCPBA delegate meeting on June 14, 2024. The NYCPBA is the first organization to receive the award.

"This award is a testament to the unwavering dedication that New York City police officers show every day, whether we're protecting our communities or stepping up to help each other," said Patrick Hendry, PBA president. "The success of Officer Quinones' transplant inspired our entire blue family, showing the profound impact we have when we come together. We are committed to continuing this program and serving our active and retired NYPD police officers, our fellow first responders and their families living with kidney disease."

Killing more people than breast cancer or prostate cancer, kidney disease has in recent years been named by the Centers for Disease Control and Prevention as a leading cause of death in the U.S. Meanwhile, the Organ Procurement and Transplantation Network reports that approximately 13 people die each day waiting for a kidney transplant.

"The perseverance of the NYCPBA and the passion of the NYPD in rallying around officer Melissa Quinones were a catalyst for the Kidneys for First Responders program," said Atul Agnihotri, Kidneys for Communities chief executive officer and board president. "The PBA's commitment to the program has resulted in the support of many successful kidney transplants for first responders across the country."

The Police Benevolent Association of the City of New York (PBA) is the largest municipal police union in the nation and represents nearly 50,000 active and retired New York City police officers.

About Kidneys for Communities
Kidneys for Communities is a nonprofit that partners with organizations to impact the lives of their members by offering resources about living kidney donations to members of their communities, increasing the chances of a donor directing a gift-of-life kidney to a fellow member in need of a kidney. Addressing the shortage of living kidney donors through proactive community outreach programs, Kidneys for Communities developed the first-ever national Community-Directed Donation^™ program.

The program unlocks connections created through membership-based communities, with the goal of increasing the number of living kidney donors in the U.S. through paired kidney exchange.   

The Kidneys for Communities leadership team includes innovative leaders, kidney donors, social workers and medical experts in the fields of nephrology and renal transplantation — all of whom have seen this disease up close and are committed to making an impact.

To find out more about how to help first responders who need a kidney transplant, visit kidneysforcommunities.org/first-responders/

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Earlier:

Friday, March 12, 2021   Kidneys for Communities

Tuesday, July 11, 2023   NYC police officer receives a kidney through Kidneys for Communities (KFC:)

Kurt Sweat and Vincent Jappah graduate

 Kurt Sweat is a new PhD economist (and if you look closely you can barely make out how expertly his doctoral hood was given and received).  Vincent Jappah is a new Masters in Econ, heading towards a PhD in Health Policy.

Three Hats

Earlier:

Friday, April 26, 2024

Kurt Sweat defends his dissertation

Internal Talent Markets, by Cowgill, Davis , Montagnes, and Perkowski

 Here's a paper that deals with the tradeoff between centralized assignment and market-like mechanisms for job assignment within a firm, 

Stable Matching on the Job? Theory and Evidence on Internal Talent Markets, by Bo Cowgill , Jonathan M. V. Davis , B. Pablo Montagnes , Patryk Perkowski, Managment Science, Published Online:6 Jun 2024https://doi.org/10.1287/mnsc.2023.01373

Abstract: "A principal often needs to match agents to perform coordinated tasks, but agents can quit or slack off if they dislike their match. We study two prevalent approaches for matching within organizations: centralized assignment by firm leaders and self-organization through market-like mechanisms. We provide a formal model of the strengths and weaknesses of both methods under different settings, incentives, and production technologies. The model highlights trade-offs between match-specific productivity and job satisfaction. We then measure these trade-offs with data from a large organization’s internal talent market. Firm-dictated matches are 33% more valuable than randomly assigned matches within job categories (using the firm’s preferred metric of quality). By contrast, preference-based matches (using deferred acceptance) are only 5% better than random but are ranked (on average) about 38 percentiles higher by the workforce. The self-organized match is positively assortative and helps workers grow new skills; the firm’s preferred match is negatively assortative and harvests existing expertise."

"In our empirical results, we find a high degree of match-specific productivity and specialization. As a result, there are large potential gains in match quality from the executive’s perspective. However, workers and managers are apathetic about these assignments. Our results suggest that these differences arise in part through differences in assortative matching. In the workforce-driven match, the firm’s best workers and managers team up together. However, from the CEO’s perspective, a good manager is more helpful in carrying the bad workers. We also find that workers prioritize opportunities for on-the-job skill development—especially in non–firm-specific skills—and the firm does not."

Why High Incentives Cause Repugnance, by Robert Stüber

 Here's a nice experiment in the EJ:

Robert Stüber,Why High Incentives Cause Repugnance: a Framed Field Experiment, The Economic Journal, 2024;, ueae018, https://doi-org.stanford.idm.oclc.org/10.1093/ej/ueae018 

"Abstract: Why are high monetary payments prohibited for certain goods, thereby causing shortages in their supply? I conduct (i) a framed field experiment with a general population sample and (ii) a survey experiment with this sample and with ethics committees. In the experiment, participants can prohibit others from being offered money to register as stem-cell donors. I document that, whereas the majority of participants do not respond to changes in the incentives (63%) or become more in favour of the offer with higher incentives (20%), a minority of 17% prohibit high incentives. I show that this minority wants to protect individuals who are persuaded by high incentives. I also show that a lottery scheme reduces their objections to high incentives. Finally, I document that the public is much more supportive of high incentives than are ethics committees."

"In the experiment, participants can prohibit a transaction that involves another person signing up as a potential stem-cell or bone-marrow donor for money.1 Participants initially make a decision for two distinct amounts of compensation: one low (€10) and one high (€500). The main outcome is participants’ willingness to pay for prohibiting or permitting the offer. I find that the majority of participants (63%) do not respond to changes in the incentives or become more in favour of the offer with higher payment (20%). A clear minority (17%) reveal a stronger preference for preventing the offer when the payment is €500 rather than €10. This finding is mirrored in a second outcome, in which separate participants make simple binary decisions to prohibit the offer or not.

"Why do some participants want to prevent high monetary incentives for signing up? I answer this question by randomly assigning participants to different treatments. In the main treatment, Reservation Price, participants again decide whether to permit an offer of €500 for becoming a stem-cell donor. However, they know that, even if they permit the offer, the offer will be made only if the individual potentially receiving the offer agrees to sign up as a donor for €10 in an independent decision made beforehand. If the individual is not willing to sign up for €10, no offer is made. Put differently, the treatment ensures that the €500 offer is made only to individuals with reservation prices of €10 or less. The offer therefore cannot attract individuals with high reservation prices. The treatment drastically reduces the resistance of individuals who prefer low incentives: the median person who was previously willing to pay €2.50 to prevent the €500 offer is now willing to pay €1.50 to permit it. "

Repugnance doesn't establish standing in court: Supreme Court reverses Kacsmaryk on medical abortion

  Yesterday the Supreme Court ruled unanimously that (for the time being at least) the medical abortion pill mifepristone should remain legal and widely available.  This reverses the decision of judge Matthew Kacsmaryk of the Federal District court in Amarillo Texas, who ruled that the FDA's authorization of the drug was illegal. (That decision was stayed pending appeal, which has now reversed it.)

The Supreme Court left open the underlying legal issues, but ruled against Judge Kacsmaryk's decision that the plaintiffs in the case, a consortium of medical associations and physicians had standing to bring the case. They say clearly that finding a law repugnant doesn't give a plaintiff standing:

“standing screens out plaintiffs who might have only a general legal, moral, ideological, or policy objection to a particular government action.” 

More colorfully, they say

"As Justice Scalia memorably said, Article III [standing] requires a plaintiff to first answer a basic question: “‘What’s it to you?’” A. Scalia, The Doctrine of Standing as an Essential Element of the Separation of Powers, 17 Suffolk U. L. Rev. 881, 882 (1983). For a plaintiff to get in the federal courthouse door and obtain a judicial determination of what the governing law is, the plaintiff cannot be a mere bystander, but instead must have a “personal stake” in the dispute."

Here is the full opinion:

SUPREME COURT OF THE UNITED STATES, “ FOOD AND DRUG ADMINISTRATION ET AL. v. ALLIANCE FOR HIPPOCRATIC MEDICINE ET AL. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 23–235. Argued March 26, 2024—Decided June 13, 2024, https://www.supremecourt.gov/opinions/23pdf/23-235_n7ip.pdf 

Do e-cigarettes lead to combustables? (Two NBER papers).

 Two NBER working papers on flavor bans for e-cigarettes, and possible migration to combustables:

The Effect of E-Cigarette Flavor Bans on Tobacco Use. by Chad D. Cotti, Charles J. Courtemanche, Yang Liang, Johanna Catherine Maclean, Erik T. Nesson & Joseph J. Sabia  NBER working paper 32535, DOI 10.3386/w32535,  June 2024

Abstract: Advocates for sales restrictions on flavored e-cigarettes argue that flavors appeal to young people and lead them down a path to nicotine addiction. This study is among the first to examine the effect of state and local restrictions on the sale of flavored electronic nicotine delivery system (ENDS) products on youth and young adult tobacco use. Using data from the State and National Youth Risk Behavior Surveys, we find that the adoption of an ENDS flavor restriction reduces frequent and everyday youth ENDS use by 1.2 to 2.5 percentage points. Auxiliary analyses of the Behavioral Risk Factor Surveillance System show similar effects on ENDS use for young adults ages 18-20. However, we also detect evidence of an unintended effect of ENDS flavor restrictions that is especially clear among 18-20-year-olds: inducing substitution to combustible cigarette smoking. Finally, there is no evidence that ENDS flavor restrictions affect ENDS use among adults aged 21 and older or non-tobacco-related health behaviors such as binge drinking and illicit drug use.

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Comprehensive E-cigarette Flavor Bans and Tobacco Use among Youth and Adults by Henry Saffer, Selen Ozdogan, Michael Grossman, Daniel L. Dench & Dhaval M. Dave NBER working paper 32534, DOI 10.3386/w32534,  June 2024

Abstract: The vast majority of youth e-cigarette users consume flavored e-cigarettes, raising concerns from public health advocates that flavors may drive youth initiation into and continued use of e-cigarettes. Flavors drew further notice from the public health community following the sudden outbreak of lung injury among vapers in 2019, prompting several states to enact sweeping bans on flavored e-cigarettes. In this study, we examine the effects of these comprehensive bans on e-cigarette use and potential spillovers into other tobacco use by youth, young adults, and adults. We utilize both standard difference-in-differences (DID) and synthetic DID methods, in conjunction with four national data sets. We find evidence that young adults decrease their use of the banned flavored e-cigarettes as well as their overall e-cigarette use, by about two percentage points, while increasing cigarette use. For youth, there is some suggestive evidence of increasing cigarette use, though these results are contaminated by pre-trend differences between treatment and control units. The bans have no effect on e-cigarette and smoking participation among older adults (ages 25+). Our findings suggest that statewide comprehensive flavor bans may have generated an unintended consequence by encouraging substitution towards traditional smoking in some populations.

Nicotine is hard to ban: Juul wins a reprieve from the FDA, and illegal vapes flood the market

 Here are two stories by Jennifer Maloney at the WSJ:

FDA Rescinds Juul Ban, Opening Door for Federal Clearance. E-cigarette maker’s products have stayed on market pending appeal of 2022 ban.. By  Jennifer Maloney

"The Food and Drug Administration rescinded its 2022 ban on Juul Labs’s e-cigarettes. The agency hasn’t yet reached a final determination on whether they can stay on the U.S. market, but the move opened the possibility for federal clearance.

The FDA in 2022 ordered Juul to halt its sales, then stayed the order pending the vaping company’s appeal. The agency said Thursday that it was placing Juul’s products back under scientific review, essentially moving them back to their regulatory status before the ban. 

...

"Juul’s products remain on the market. The FDA didn’t give a timeline for a final decision on whether they can stay there. Juul is the No. 2 e-cigarette maker in the U.S.

Juul and other e-cigarette manufacturers in 2020 were required to submit scientific research to demonstrate that their vaping products exposed users to fewer carcinogens than cigarettes and that the benefit of helping adult smokers switch to a safer alternative outweighed the potential harm of hooking young people on nicotine.

...

"The FDA ban, though it was quickly put on hold, sent Juul into a financial tailspin. The company narrowly averted bankruptcy. Juul has since submitted next-generation vaping products for FDA review. They aren’t yet for sale in the U.S."

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U.S. Pledges Crackdown on Illegal E-Cigarettes. FDA and DOJ form task force to go after fruity, disposable vapes flooding the market.  By Jennifer Maloney

"Big tobacco companies and their critics agree on at least one thing: The illegal, fruit-flavored, disposable vapes that are popular among teenagers have flooded the U.S. market and federal regulators haven’t done enough to stop it.

"The Food and Drug Administration and Justice Department said Monday they are stepping up enforcement by forming a multiagency task force to go after the illegal distribution and sale of e-cigarettes.

"Disposable vaping devices, almost none of which are authorized for sale by the FDA, represent more than 30% of U.S. e-cigarette sales in stores tracked by Nielsen, according to an analysis by Goldman Sachs. Many of them are imported from China. Breeze Pro and Elfbar, both of which were ordered off the market last year by the FDA, remain the top two disposable e-cigarette brands in the U.S.

"Njoy is the only disposable vaping brand authorized for sale by the FDA." 

Frans de Waal (1948-2024)

 The eminent primatologist Frans de Waal has passed away. Here's a memoriam from Emory University:

Emory primatologist Frans de Waal remembered for bringing apes ‘a little closer to humans’

I sometimes show the video below about his experiment with monkeys on fairness (and being treated unfairly) to my class on experimental economics (typically when I'm about to talk about the ultimatum game).

"Two capuchins were situated in enclosures next to one another. A researcher would ask them to do a task and if they succeeded give them a treat. The catch was one monkey was always rewarded with a piece of cucumber while the other monkey sometimes got a piece of cucumber and sometimes got a grape — a preferred treat among capuchin monkeys.

"A video de Waal filmed of one of the experiments created a media sensation.

Unequal pay for equal work: When the first monkey gives the researcher a rock, she is rewarded with a cucumber slice. But watch what happens when the first monkey sees the second monkey hand the researcher a rock — and get a much tastier grape instead.

"A monkey that received only cucumber appears perfectly happy until she sees her companion receive a grape. Then her behavior changes. She accepts the next piece of cucumber only to throw it back at the researcher, pounding the surface in front of the enclosure and shaking its Plexiglas walls.

“That video struck home with a lot of people,” Brosnan says. “Who hasn’t felt like that monkey that’s only getting cucumbers? Our research showed something about the evolution of the sense of human fairness.”

INFORMS Section on Auctions and Market Design (AMD)

 Itai Ashlagi and Vahideh Manshadi write:

"Dear colleagues:

 

We are writing to provide updates about the ongoing activities of the INFORMS Section on Auctions and Market Design (AMD)... 

 

1) AMD Membership without INFORMS Membership: As you may know, AMD aims to build an inclusive and diverse community interested in Market Design (broadly construed). Toward that goal, we have worked with INFORMS to create the option of joining AMD without INFORMS membership. If you are interested in joining the AMD section, please visit our website and check out the different options to join (as INFORMS member for an additional $10 on top of your INFORMS membership or non-member for only $20 in total per year). This way you will continue to be informed about our market design activities. 

 

2) Special Issue on Market Design (Deadline September 24): We are pleased to announce that we have co-sponsored a new Special Issue on Mathematics of Market Design at the INFORMS Journal Mathematics of Operations Research. (Special Issue Editors: Saša Pekeč, Martin Bichler, Nicole Immorlica, Scott Kominers, and Paul Milgrom) 

 

3) Journal Presence at Management Science: the INFORMS Journal  Management Science now has a department titled Market Design, Platform, and Demand Analytics. (Dept. Editors are Itai Ashlagi, Martin Bichler, and Srikanth Jagabathula; the list of AEs includes Paul Milgrom and Al Roth); Management Science is the flagship journal of INFORMS.  

 

4) AMD Workshop at the ACM EC in July 24: We are pleased to announce the INFORMS Market Design Workshop which will take place in conjunction with the ACM EC Conference at Yale University, July 8-11, 2024. Special thanks to Paul Dutting, John Horton, and Yash Kanoria for co-organizing the workshop. Check the workshop website for the program details.

 

5) AMD INFORMS Cluster at the Annual Meeting in October 24: We are excited to have organized  ~25 invited sessions on a wide range of topics as part of the AMD cluster at the upcoming INFORMS Annual Meeting (Seattle, Washington, October 20-23, 2024); special thanks to Thodoris Lykouris, Ali Makhdoumi, Pengyu Qian for serving as the cluster co-organizers.

 If you want to learn more about AMD, please check out the AMD website, people involved, and past activities. We'd be excited to have you as part of our growing community of market designers!"