Big law firms do a lot of the hiring of new lawyers by first hiring them as second year summer associates, who will work for the firm the summer between their second and third (last) year of law school, and who will often be recruited back to full time associate positions following graduation. At various times in the past this recruiting process has unraveled, with first year summer associateships sometimes assuming a similarly important role in the recruiting and screening process. (In general, unraveling is the process by which a market starts to arrange transactions, in this case employment, earlier and earlier before they will actually begin, and it can make the matching process inefficient.)
The Harvard Crimson reports what might be the beginning of some unraveling, as the recruiting process by which second year summer associates are recruited at Harvard will become about a month earlier, and before second year classes begin: HLS To Move Up Summer Job Hunt.
"Harvard Law School will move up its recruiting process in order to bring recruiters to campus earlier in the year after firm cutbacks due to last fall’s economic turbulence left many students with far fewer summer offers than in years past. The Law School’s Office of Career Services announced that the school will invite firms to campus the last full week of August before classes begin, advancing the recruiting timeline by about a month. Traditionally, the Law School’s recruiting cycle began later than at comparable institutions, which hurt students last October when law firms reduced the number of spots reserved for Harvard recruits in light the impending recession. Fly-out week—the time when students visit firms who have expressed interest in them—is now scheduled for the week of September 14, two weeks after the first day of classes. During that period, the school puts classes on hold for a week-long fall break. "
Sunday, February 15, 2009
Saturday, February 14, 2009
Contracts for basketball players: the principal-agent problem in a team sport
The NY Times has a fascinating article on basketball, focused on the Rockets' Shane Battier: The No-Stats All-Star. But the larger focus of the article is on basketball as a team sport in which there is considerable tension between self interest and team interest for players who are measured and rewarded by their individual statistics. That is, players may be tempted to shoot rather than pass, or vice versa, in order to improve their statistics even when a different action would have a greater chance of improving the score, and many of the important defensive things a player like Battier does are not even measured by conventionally reported statistics. The article suggests that basketball contracts may change, as teams start to understand incentives better.
"There is a tension, peculiar to basketball, between the interests of the team and the interests of the individual. The game continually tempts the people who play it to do things that are not in the interest of the group. On the baseball field, it would be hard for a player to sacrifice his team’s interest for his own. Baseball is an individual sport masquerading as a team one: by doing what’s best for himself, the player nearly always also does what is best for his team. “There is no way to selfishly get across home plate,” as Morey puts it. “If instead of there being a lineup, I could muscle my way to the plate and hit every single time and damage the efficiency of the team — that would be the analogy"
...
"When I ask Morey if he can think of any basketball statistic that can’t benefit a player at the expense of his team, he has to think hard. “Offensive rebounding,” he says, then reverses himself. “But even that can be counterproductive to the team if your job is to get back on defense.” It turns out there is no statistic that a basketball player accumulates that cannot be amassed selfishly. “We think about this deeply whenever we’re talking about contractual incentives,” he says. “We don’t want to incent a guy to do things that hurt the team” — and the amazing thing about basketball is how easy this is to do. “They all maximize what they think they’re being paid for,” he says. He laughs. “It’s a tough environment for a player now because you have a lot of teams starting to think differently. They’ve got to rethink how they’re getting paid.”"
The principal-agent problem is everywhere.
"There is a tension, peculiar to basketball, between the interests of the team and the interests of the individual. The game continually tempts the people who play it to do things that are not in the interest of the group. On the baseball field, it would be hard for a player to sacrifice his team’s interest for his own. Baseball is an individual sport masquerading as a team one: by doing what’s best for himself, the player nearly always also does what is best for his team. “There is no way to selfishly get across home plate,” as Morey puts it. “If instead of there being a lineup, I could muscle my way to the plate and hit every single time and damage the efficiency of the team — that would be the analogy"
...
"When I ask Morey if he can think of any basketball statistic that can’t benefit a player at the expense of his team, he has to think hard. “Offensive rebounding,” he says, then reverses himself. “But even that can be counterproductive to the team if your job is to get back on defense.” It turns out there is no statistic that a basketball player accumulates that cannot be amassed selfishly. “We think about this deeply whenever we’re talking about contractual incentives,” he says. “We don’t want to incent a guy to do things that hurt the team” — and the amazing thing about basketball is how easy this is to do. “They all maximize what they think they’re being paid for,” he says. He laughs. “It’s a tough environment for a player now because you have a lot of teams starting to think differently. They’ve got to rethink how they’re getting paid.”"
The principal-agent problem is everywhere.
TARP II
Lucian Bebchuk, the eminent law-and-economics lawyer/economist best known for his work on corporate governance, has just distributed a paper, How To Make TARP II Work.
Here is the Abstract:
"Treasury Secretary Geithner announced a plan, which the Treasury is willing to finance with up to $1 trillion of public funds, to partner with private capital to buy banks' "troubled assets." The Treasury has not yet settled on the plan's design, and its announcement has encountered substantial skepticism as to whether an effective plan for a public-private partnership in buying troubled assets can be worked out. This paper argues that, yes, it can. The paper also analyzes how the plan should be designed to contribute most to restarting the market for troubled assets at the least cost to taxpayers.
"The government's plan should focus on establishing a significant number of competing funds that will be privately managed and dedicated to buying troubled assets - not on creating one, large public-private aggregator bank. Establishing competing funds, I show, is necessary both to securing a well-functioning market for troubled assets and to keeping costs to taxpayers at a minimum.
"Each new fund will be partly financed with private capital, with the rest coming (say, in the form of non-recourse debt financing) from the government's Investment Fund planned by the Treasury. One important element of the proposed design is a competitive process in which private managers seeking to establish a fund participating in the program will submit bids as to what fraction of the fund's capital will be funded privately. The government will set the fraction of each participating fund's capital that must be financed with private money at the highest level that, given the received bids, will still enable establishing new funds with aggregate capital equal to the program's target level. Overall, I show that the proposed design will leverage private capital to the fullest extent possible and will provide the most effective and least costly mechanism for restarting the market for troubled assets. "
Here is the Abstract:
"Treasury Secretary Geithner announced a plan, which the Treasury is willing to finance with up to $1 trillion of public funds, to partner with private capital to buy banks' "troubled assets." The Treasury has not yet settled on the plan's design, and its announcement has encountered substantial skepticism as to whether an effective plan for a public-private partnership in buying troubled assets can be worked out. This paper argues that, yes, it can. The paper also analyzes how the plan should be designed to contribute most to restarting the market for troubled assets at the least cost to taxpayers.
"The government's plan should focus on establishing a significant number of competing funds that will be privately managed and dedicated to buying troubled assets - not on creating one, large public-private aggregator bank. Establishing competing funds, I show, is necessary both to securing a well-functioning market for troubled assets and to keeping costs to taxpayers at a minimum.
"Each new fund will be partly financed with private capital, with the rest coming (say, in the form of non-recourse debt financing) from the government's Investment Fund planned by the Treasury. One important element of the proposed design is a competitive process in which private managers seeking to establish a fund participating in the program will submit bids as to what fraction of the fund's capital will be funded privately. The government will set the fraction of each participating fund's capital that must be financed with private money at the highest level that, given the received bids, will still enable establishing new funds with aggregate capital equal to the program's target level. Overall, I show that the proposed design will leverage private capital to the fullest extent possible and will provide the most effective and least costly mechanism for restarting the market for troubled assets. "
Friday, February 13, 2009
Pirate ransom: counterparty risk in the endgame
The NY Times reports that Hijacked Arms Ship Limps Into Port (this is the Ukranian ship full of Russian tanks and other heavy weapons that I blogged about earlier).
An earlier report, Somali Pirates Said to Be Leaving Ship , sheds some light on the negotiations:
"Somali pirates freed a Ukrainian ship carrying tanks and other heavy weapons Thursday after receiving a $3.2 million ransom. The U.S. Navy watched the pirates go but didn't act because the pirates still hold almost 150 people from other crews hostage." ...
"U.S. seamen were inspecting the pirates' departing boats to make sure they weren't taking weapons from the Faina's cargo, Mikhail Voitenko, a spokesman for the ship's owners, said Thursday.
But the Navy was not taking action against the pirates because it did not want members of other crews still in captivity to be harmed, said Cmdr. Jane Campbell, a spokeswoman for the 5th Fleet in Bahrain.
''Even when you release Faina, there are still 147 mariners held hostage by armed pirates,'' Campbell told The Associated Press. ''We're concerned for their well-being.''"
This is the same U.S. Navy one of whose first missions was to fight the Barbary Pirates , an earlier African/Islamic manifestation of piracy. (Do you say a Navy won its wings? spurs? water wings?). So it is very plausible that the pirates worry that, when they release their last hostages, they will face military retaliation against their bases in Somalia.
This will make the endgame tricky.
An earlier report, Somali Pirates Said to Be Leaving Ship , sheds some light on the negotiations:
"Somali pirates freed a Ukrainian ship carrying tanks and other heavy weapons Thursday after receiving a $3.2 million ransom. The U.S. Navy watched the pirates go but didn't act because the pirates still hold almost 150 people from other crews hostage." ...
"U.S. seamen were inspecting the pirates' departing boats to make sure they weren't taking weapons from the Faina's cargo, Mikhail Voitenko, a spokesman for the ship's owners, said Thursday.
But the Navy was not taking action against the pirates because it did not want members of other crews still in captivity to be harmed, said Cmdr. Jane Campbell, a spokeswoman for the 5th Fleet in Bahrain.
''Even when you release Faina, there are still 147 mariners held hostage by armed pirates,'' Campbell told The Associated Press. ''We're concerned for their well-being.''"
This is the same U.S. Navy one of whose first missions was to fight the Barbary Pirates , an earlier African/Islamic manifestation of piracy. (Do you say a Navy won its wings? spurs? water wings?). So it is very plausible that the pirates worry that, when they release their last hostages, they will face military retaliation against their bases in Somalia.
This will make the endgame tricky.
Thursday, February 12, 2009
Auction design for football games
One of Tim Harford's excellent recent columns is on market design for professional football games: Why the NFL should replace the overtime coin toss with an auction system. The issue is that, when a game goes to sudden death overtime, the winner of the coin toss more often also wins the game.
"An ... elegant solution to the overtime problem was proposed in 2002 by Chris Quanbeck, an electrical engineer (and Green Bay Packers fan). Quanbeck's idea was to auction off possession of the ball in the natural currency of the game: field position. The team that was willing to begin closest to its own goal line would receive the privilege of possession."
...
"One person who did notice the Quanbeck proposal was Columbia University economist Yeon-Koo Che, a leading light in the theory and practice of auction design. Che wrote not to the NFL but to the economics journals and proved that "divide and choose" was much fairer to the loser of the toss than the current system. But what interested Che and co-author Terrence Hendershott was whether an auction might be even fairer than "divide and choose." They concluded that it would be, because the auction is completely symmetric—unlike with the "divide and choose" method, neither coach is forced to make the first move, so nobody has a built-in advantage. For Che and Hendershott, then, "divide and choose" partly solves the coin-toss problem; the auction fixes it completely."
Che and Hendershott write elsewhere (in The Economist's Voice)
" As far as we are concerned, this little thought experiment was a pleasant reprieve from the current economic woes, and it is nice that economics can have useful things to say on such an unlikely subject matter (a sport we both love), but as one hate email we received suggests, we should and will now “stick to bean counting.” "
I certainly hope they won't: there are plenty of bean counters, but talented market designers are rare.
HT Parag Pathak
"An ... elegant solution to the overtime problem was proposed in 2002 by Chris Quanbeck, an electrical engineer (and Green Bay Packers fan). Quanbeck's idea was to auction off possession of the ball in the natural currency of the game: field position. The team that was willing to begin closest to its own goal line would receive the privilege of possession."
...
"One person who did notice the Quanbeck proposal was Columbia University economist Yeon-Koo Che, a leading light in the theory and practice of auction design. Che wrote not to the NFL but to the economics journals and proved that "divide and choose" was much fairer to the loser of the toss than the current system. But what interested Che and co-author Terrence Hendershott was whether an auction might be even fairer than "divide and choose." They concluded that it would be, because the auction is completely symmetric—unlike with the "divide and choose" method, neither coach is forced to make the first move, so nobody has a built-in advantage. For Che and Hendershott, then, "divide and choose" partly solves the coin-toss problem; the auction fixes it completely."
Che and Hendershott write elsewhere (in The Economist's Voice)
" As far as we are concerned, this little thought experiment was a pleasant reprieve from the current economic woes, and it is nice that economics can have useful things to say on such an unlikely subject matter (a sport we both love), but as one hate email we received suggests, we should and will now “stick to bean counting.” "
I certainly hope they won't: there are plenty of bean counters, but talented market designers are rare.
HT Parag Pathak
Wednesday, February 11, 2009
Kidney Exchange coming to Spain (and liver exchange in HK)
Spain, which has the highest per-capita recovery rate of deceased donor organs in the world, is looking to expand its capacity for live donor kidney transplantation, by starting to use kidney exchange. Adn.es reports: España hará un trasplante cruzado de riñón.
"The first cross-kidney donation done in Spain will take place between two couples in June. "
HT to Flip Klijn
Update: for those who didn't click on the wonderful comment, here it is:
denisec said...
The first liver exchange in Hong Kong occurred a few weeks ago. It was described as "heaven sent" in the media: I save your hubby, you save my brother-in-law , and here it is (with a photo) in a Chinese newspaper
"The first cross-kidney donation done in Spain will take place between two couples in June. "
HT to Flip Klijn
Update: for those who didn't click on the wonderful comment, here it is:
denisec said...
The first liver exchange in Hong Kong occurred a few weeks ago. It was described as "heaven sent" in the media: I save your hubby, you save my brother-in-law , and here it is (with a photo) in a Chinese newspaper
Further Update, June 2023: the above links didn't survive the passage of more than a decade, but you can get a little closer to the Hong Kong story at this Singapore link
Market for health care: no law of one price
The Boston Globe ran a story about healthcare costs at different Boston area hospitals, in which fees are negotiated between insurers and individual hospitals: A healthcare system badly out of balance
""The same service delivered the same way with the same outcome can vary in cost from one provider to the next by as much as 300 percent," said Charles Baker, president of the state's second-largest health insurer, Harvard Pilgrim Health Care. "There is no other sector of the economy anywhere in this country in which that kind of price variability with no appreciable difference in service or product quality can sustain itself over time.""
Pricing certainly serves different function in health care than in other parts of the economy, and tertiary care teaching hospitals do more than provide simple patient services (e.g. they also train future docs, about which see my previous post today, on Orthopaedic surgeons). So, as the healthcare system is brought into better balance, some attention will have to be paid to paying for some of the things that now may be paid for with hidden cross-subsidies.
HT Paul Kominers (younger brother of the remarkable if less cool SK)
""The same service delivered the same way with the same outcome can vary in cost from one provider to the next by as much as 300 percent," said Charles Baker, president of the state's second-largest health insurer, Harvard Pilgrim Health Care. "There is no other sector of the economy anywhere in this country in which that kind of price variability with no appreciable difference in service or product quality can sustain itself over time.""
Pricing certainly serves different function in health care than in other parts of the economy, and tertiary care teaching hospitals do more than provide simple patient services (e.g. they also train future docs, about which see my previous post today, on Orthopaedic surgeons). So, as the healthcare system is brought into better balance, some attention will have to be paid to paying for some of the things that now may be paid for with hidden cross-subsidies.
HT Paul Kominers (younger brother of the remarkable if less cool SK)
Market for Orthopaedic surgeons
I recently broke an ankle in Maastricht and flew home for surgery in Boston. In both places I visited the emergency room. In both cases the orthopaedic surgery resident who I was treated by in the ER was a young woman.
In Boston, I remarked that, when I was much younger, orthopaedic surgeons were almost all men, and that back then they claimed that orthopaedic surgery had a lot in common with carpentry, and required significant upper body strength. The resident told me that the situation had indeed changed, she had senior mentors who were women.
When she and her colleagues apply for subspecialty fellowships, they will face not only a more gender-integrated market but also a much more orderly market than in the recent past.
A "match" (a centralized clearinghouse) is coming for Orthopaedic surgery subspecialties--see the following preparatory study by two economists (Muriel Niederle and myself) and seven surgeons. (As it happens--small world--the surgeon who put in the many new titanium parts I now am growing new bone around had heard me give an Orthopaedic Surgery Grand Rounds on this subject.)
Harner, Christopher D., Anil S. Ranawat, Muriel Niederle, Alvin E. Roth, Peter J. Stern, Shepard R. Hurwitz, William Levine, G. Paul DeRosa, Serena S. Hu, "Current State of Fellowship Hiring: Is a universal match necessary? Is it possible?," Journal of Bone and Joint Surgery, 90, 2008,1375-1384.
In Boston, I remarked that, when I was much younger, orthopaedic surgeons were almost all men, and that back then they claimed that orthopaedic surgery had a lot in common with carpentry, and required significant upper body strength. The resident told me that the situation had indeed changed, she had senior mentors who were women.
When she and her colleagues apply for subspecialty fellowships, they will face not only a more gender-integrated market but also a much more orderly market than in the recent past.
A "match" (a centralized clearinghouse) is coming for Orthopaedic surgery subspecialties--see the following preparatory study by two economists (Muriel Niederle and myself) and seven surgeons. (As it happens--small world--the surgeon who put in the many new titanium parts I now am growing new bone around had heard me give an Orthopaedic Surgery Grand Rounds on this subject.)
Harner, Christopher D., Anil S. Ranawat, Muriel Niederle, Alvin E. Roth, Peter J. Stern, Shepard R. Hurwitz, William Levine, G. Paul DeRosa, Serena S. Hu, "Current State of Fellowship Hiring: Is a universal match necessary? Is it possible?," Journal of Bone and Joint Surgery, 90, 2008,1375-1384.
Monday, February 9, 2009
Market for electric cars
Before there's a very big market for all-electric cars, there would have to be a way to take long trips in them. For gas-powered cars, there's an extensive infrastructure of filling stations around the world's network of roadways. The NY Times reports on one company's plans to initiate such a network of stations, where you could change your depleted battery for a full one: Mapping a Global Plan for Car Charging Stations
"Mr. Agassi said the first 50 stations would be built in Israel by the end of 2010, the same time Renault’s electric cars would be introduced there, and followed by installations in Denmark, Hawaii and elsewhere. "
Israel and Hawaii seem like natural places to get electric cars started. Both of them are islands as far as auto traffic is concerned: very few people drive out of either one of them. So it should be possible to serve all the driving needs with a small, dense network. Denmark will be harder, since although many car trips that begin in Denmark remain in Denmark, Danes also can drive to Germany and Sweden, and from there on to the wide world, so a Dane with an electric car would, at least for a while, be more limited than one with a gas-powered car.
"Mr. Agassi said the first 50 stations would be built in Israel by the end of 2010, the same time Renault’s electric cars would be introduced there, and followed by installations in Denmark, Hawaii and elsewhere. "
Israel and Hawaii seem like natural places to get electric cars started. Both of them are islands as far as auto traffic is concerned: very few people drive out of either one of them. So it should be possible to serve all the driving needs with a small, dense network. Denmark will be harder, since although many car trips that begin in Denmark remain in Denmark, Danes also can drive to Germany and Sweden, and from there on to the wide world, so a Dane with an electric car would, at least for a while, be more limited than one with a gas-powered car.
Barter and illiquidity in Russia
The NY Times reports that in Russia, where rubles are getting scarce but prices are remaining sticky, there's a growing interest in barter exchanges:
Have Car, Need Briefs? In Russia, Barter Is Back .
"Advertisements are beginning to appear in newspapers and online, like one that offered “2,500,000 rubles’ worth of premium underwear for any automobile,” and another promising “lumber in Krasnoyarsk for food or medicine.” A crane manufacturer in Yekaterinburg is paying its debtors with excavators.
And one of Russia’s original commodities traders, German L. Sterligov, has rolled out a splashy “anti-crisis” initiative that he says will link long chains of enterprises in a worldwide barter system.
All this evokes a bit of déjà vu. In the mid-1990s, barter transactions in Russia accounted for an astonishing 50 percent of sales for midsize enterprises and 75 percent for large ones."
...
"Among the most upbeat of [the proponents of barter] is Mr. Sterligov, who, just as the credit crunch brought most business deals to a halt, shoveled $13 million into the Anti-Crisis Settlement and Commodity Center.
...He plans to use a computer database to create chains of six or seven enterprises having difficulty selling their products for cash, in which the last firm on the chain would pay the first in a single cash transaction.
It is the kind of multiparty barter that rose to prominence in the 1990s, when managers of factories across Russia devised complex barter chains to keep the maximum number of enterprises in business when none had cash to pay their bills. A computer, he said, can do the same job faster and more efficiently. "
Loyal followers of this blog will note the resemblance to some kinds of kidney exchange (most notably list exchange chains and altruistic donor chains).
Have Car, Need Briefs? In Russia, Barter Is Back .
"Advertisements are beginning to appear in newspapers and online, like one that offered “2,500,000 rubles’ worth of premium underwear for any automobile,” and another promising “lumber in Krasnoyarsk for food or medicine.” A crane manufacturer in Yekaterinburg is paying its debtors with excavators.
And one of Russia’s original commodities traders, German L. Sterligov, has rolled out a splashy “anti-crisis” initiative that he says will link long chains of enterprises in a worldwide barter system.
All this evokes a bit of déjà vu. In the mid-1990s, barter transactions in Russia accounted for an astonishing 50 percent of sales for midsize enterprises and 75 percent for large ones."
...
"Among the most upbeat of [the proponents of barter] is Mr. Sterligov, who, just as the credit crunch brought most business deals to a halt, shoveled $13 million into the Anti-Crisis Settlement and Commodity Center.
...He plans to use a computer database to create chains of six or seven enterprises having difficulty selling their products for cash, in which the last firm on the chain would pay the first in a single cash transaction.
It is the kind of multiparty barter that rose to prominence in the 1990s, when managers of factories across Russia devised complex barter chains to keep the maximum number of enterprises in business when none had cash to pay their bills. A computer, he said, can do the same job faster and more efficiently. "
Loyal followers of this blog will note the resemblance to some kinds of kidney exchange (most notably list exchange chains and altruistic donor chains).
Sunday, February 8, 2009
Market for art: Brandeis, continued
When I earlier wrote about Brandeis University's decision to close its art museum and sell its art, I noted that many of the reactions to this announcement treated the selling of (donated) art by a museum as a repugnant transaction. Now, Brandeis is reconsidering: Brandeis president issues an apology: Laments museum announcement.
"Reinharz's effort yesterday to soothe a fractured Brandeis community followed last week's surprise announcement that the school planned to close the museum and sell off its artwork as it confronts a financial crisis. That decision had incited protests on campus as well as a firestorm of criticism from the art and philanthropic worlds....
"As for the art, Reinharz said that the university does not intend to put all 7,180 works on the auction block. Only a "minute number" would be sold "if and when it is necessary," he said in Wednesday's interview....
"Reinharz released the letter following a rebuke from faculty late Wednesday, urging him to suspend any final decisions on the museum. His administration's abrupt announcement last week had created a "crisis of confidence" among faculty members, the faculty said in a letter to the president."
Letters to the NY Times on the subject eloquently express strong, conflicting opinions. E.g., on the one hand,
"In a meeting with alumni leaders in the fall, Jehuda Reinharz, president of Brandeis, stated that he would not allow a student to drop out because his or her parents could no longer afford tuition. I thought that was a wonderful position, and it made me prouder of my university than any work by Jasper Johns or Andy Warhol ever did....No one thinks selling art is desirable. But allowing students to have to leave school is not an acceptable alternative. "
And on the other,
"On Jan. 20, I stood on the Mall and watched as President Obama said, “We reject as false the choice between our safety and our ideals.”
He continued, “Those ideals still light the world, and we will not give them up for expedience’s sake.”
Six days later I discovered that my alma mater had done just that, when Brandeis University’s board and president traded the Rose Art Museum for a short-term fiscal fix.
Of the university that ignited my intellectual curiosity and helped to instill in me a lifelong love of the arts, I ask: If you do not stand for the arts when it would be easier not to, did you ever really stand for them at all? "
Saturday, February 7, 2009
Market for electricity: Information and consumption behavior
One set of market design decisions involves what kind of information to provide to participants about other participants. Now that regulated utilities often have an interest in helping customers conserve electricity, one strategy has been to issue electricity bills that let customers compare their usage with the average of their neighbors, and with their most 'efficient' neighbors: Utilities Turn Their Customers Green, With Envy .
This seems to have a good effect. The article suggests that a big component of this effect is the competitive impulse. Of course there may also be a pure information effect; when you realize that people with similar size houses use less electricity, it may let you know that there may be ways to conserve energy that you aren't yet utilizing. (It might be hard to separate these effects in field data.)
This seems to have a good effect. The article suggests that a big component of this effect is the competitive impulse. Of course there may also be a pure information effect; when you realize that people with similar size houses use less electricity, it may let you know that there may be ways to conserve energy that you aren't yet utilizing. (It might be hard to separate these effects in field data.)
Friday, February 6, 2009
Networks and high school athletes
While the NCAA regulates the communication between high school and college coaches, it has more trouble regulating third-party networkers, the NY Times reports: College Recruiting’s Thin Gray Line. It isn't entirely clear who is extracting information rents from whom, but one worries about the high school players.
"“Recruiting for college football is obviously changing,” Prince said in a telephone interview. “It’s become much more like the basketball model. When that happens, you then have people who are intermediaries ...”"
HT Muriel Niederle
"“Recruiting for college football is obviously changing,” Prince said in a telephone interview. “It’s become much more like the basketball model. When that happens, you then have people who are intermediaries ...”"
HT Muriel Niederle
Thursday, February 5, 2009
Networks and labor markets: Internships
The British government is promoting internships as one entryway into the labor market, and as a way to increase social mobility. But the Times of London notes: Sharp middle-class elbows are winning the intern wars
"Even the Labour party is not above calling in favours from chums. Euan Blair, son of the former prime minister, did two stints as an intern in the US Congress. He also worked as a production runner on a film set in the Houses of Parliament, and had work experience at a Paris radio station owned by Bernard Arnault, France’s richest man. "
Aside from personal connections, there are starting to be some market institutions:
"Parents with less exalted connections have little choice but to stump up cash. Work experience has become a popular prize at charity auctions: just before Christmas a week’s unpaid work at ITV Productions fetched £1,260."
"Work experience has always been tricky to come by, but at the moment demand vastly outstrips supply. Wexo, Work Experience Online, whose web address is www.wexo.co.uk, is a Facebook-style website that matches employers with people looking for work experience. It currently has 200 companies on its books – including Armani and Sony Music – and about 2,000 young people hoping to be interns. According to Robin Kennedy, the site’s co-creator, there are more applications towards more glam sectors like marketing, fashion, and entertainment. Don’t, though, think all work experience is so exciting. The company named last year as best work experience provider was Shetland Seafood Auctions, whose seven staff provide an electronic auction service at Lerwick fish market. "
"Even the Labour party is not above calling in favours from chums. Euan Blair, son of the former prime minister, did two stints as an intern in the US Congress. He also worked as a production runner on a film set in the Houses of Parliament, and had work experience at a Paris radio station owned by Bernard Arnault, France’s richest man. "
Aside from personal connections, there are starting to be some market institutions:
"Parents with less exalted connections have little choice but to stump up cash. Work experience has become a popular prize at charity auctions: just before Christmas a week’s unpaid work at ITV Productions fetched £1,260."
"Work experience has always been tricky to come by, but at the moment demand vastly outstrips supply. Wexo, Work Experience Online, whose web address is www.wexo.co.uk, is a Facebook-style website that matches employers with people looking for work experience. It currently has 200 companies on its books – including Armani and Sony Music – and about 2,000 young people hoping to be interns. According to Robin Kennedy, the site’s co-creator, there are more applications towards more glam sectors like marketing, fashion, and entertainment. Don’t, though, think all work experience is so exciting. The company named last year as best work experience provider was Shetland Seafood Auctions, whose seven staff provide an electronic auction service at Lerwick fish market. "
Wednesday, February 4, 2009
Sex and violence on TV: US and Europe
Some transactions are more repugnant than others, and the difference is different in different places. What can be broadcast on TV (or seen in a theatre or sports venue) is different in the US and Europe. I'm reminded of this by a recent NY Times editorial blog post The Disturbing Rise of Ultimate Fighting.
It concludes:
"The rise of ultimate fighting, which is becoming a staple of cable television, is a tribute to the large amounts of money to be made — and to the nation’s bizarre double standard about violence and sex.
If there is a “wardrobe malfunction,” and a usually covered body part is briefly shown, the government reacts swiftly and punitively. If a young man bashes another young man’s face into a bloody pulp, well, that’s entertainment."
Some years ago, a European postdoc told me that he couldn't understand why American movies were much more censored for sex than European movies, but nevertheless had much more violence. I told him that sex was much more natural in Europe, since without it there wouldn't be any Europeans. Americans, on the other hand, come from immigration...
It concludes:
"The rise of ultimate fighting, which is becoming a staple of cable television, is a tribute to the large amounts of money to be made — and to the nation’s bizarre double standard about violence and sex.
If there is a “wardrobe malfunction,” and a usually covered body part is briefly shown, the government reacts swiftly and punitively. If a young man bashes another young man’s face into a bloody pulp, well, that’s entertainment."
Some years ago, a European postdoc told me that he couldn't understand why American movies were much more censored for sex than European movies, but nevertheless had much more violence. I told him that sex was much more natural in Europe, since without it there wouldn't be any Europeans. Americans, on the other hand, come from immigration...
Tuesday, February 3, 2009
Market for soldiers: the Ghurkas
The hiring of mercenaries is widely repugnant (the Geneva Conventions sharply distinguish between soldiers and mercenaries: “A mercenary shall not have the right to be a combatant or a prisoner of war.”). A notable exception is the long standing relationship between the British Army and the Nepalese Ghurkas. Recently the British courts have required the army to treat retired Ghurkas somewhat more like regular Army retirees, and two articles in the London Times explore the story.
Nepal’s middle classes steal a march on path to riches reports that
"The problem is that the benefits of the job now outstrip the average in Nepal’s private sector by so much that even relatively wealthy members of the urban middle class are queuing up to enlist. The recruits used to come mainly from poor villages in the hills, where a Gurkha salary and pension, though less than those paid to the rest of the British Army until recently, were enough to support a large family for life. That started to change in 2007, when the British Government accepted the Gurkhas’ demands for the same terms and conditions as the rest of the Army. "...
"The most obvious effect in Nepal is that dozens of private Gurkha training schools have sprung up in the main recruiting areas to help to give prospective recruits a competitive edge. The schools typically charge would-be male recruits about 3,000 rupees (£27) a month for classes in maths and English and physical training. Women pay 1,000 rupees for a two-hour early-morning workout, six days a week, for three months. "...
"The Nepalese Government has backed away from a pledge to ban the country’s citizens from serving in a foreign army, which it described until recently as humiliating, but is concerned about a potential brain drain. "
Another story recounts some of the history of the Gurkhas:
"The Gurkhas fought the British in the 1814-16 Gurkha War. They impressed their enemy and later agreed to become British mercenaries "
The story also includes a remark on the changing technology of warfare:
"Their trademark is the kukri knife, which tradition demands must draw blood every time that it is unsheathed. Gurkhas say that today, however, the knife is used more often in cooking "
Nepal’s middle classes steal a march on path to riches reports that
"The problem is that the benefits of the job now outstrip the average in Nepal’s private sector by so much that even relatively wealthy members of the urban middle class are queuing up to enlist. The recruits used to come mainly from poor villages in the hills, where a Gurkha salary and pension, though less than those paid to the rest of the British Army until recently, were enough to support a large family for life. That started to change in 2007, when the British Government accepted the Gurkhas’ demands for the same terms and conditions as the rest of the Army. "...
"The most obvious effect in Nepal is that dozens of private Gurkha training schools have sprung up in the main recruiting areas to help to give prospective recruits a competitive edge. The schools typically charge would-be male recruits about 3,000 rupees (£27) a month for classes in maths and English and physical training. Women pay 1,000 rupees for a two-hour early-morning workout, six days a week, for three months. "...
"The Nepalese Government has backed away from a pledge to ban the country’s citizens from serving in a foreign army, which it described until recently as humiliating, but is concerned about a potential brain drain. "
Another story recounts some of the history of the Gurkhas:
"The Gurkhas fought the British in the 1814-16 Gurkha War. They impressed their enemy and later agreed to become British mercenaries "
The story also includes a remark on the changing technology of warfare:
"Their trademark is the kukri knife, which tradition demands must draw blood every time that it is unsheathed. Gurkhas say that today, however, the knife is used more often in cooking "
Monday, February 2, 2009
Credit cards, data mining, incentives
Two recent stories point to the fact that banks, seeking to control their lending, are selectively suspending credit cards or cutting credit limits, based on data about individuals' credit card use. This introduces some interesting incentive problems, quite different from usual credit card decisions.
The NY Times story, American Express Kept a (Very) Watchful Eye on Charges , reports
"In some instances, if it didn’t like what it was seeing, the company has cut customer credit lines. It laid out this logic in letters that infuriated many of the cardholders who received them. “Other customers who have used their card at establishments where you recently shopped,” one of those letters said, “have a poor repayment history with American Express.”
"It sure sounded as if American Express had developed a blacklist of merchants patronized by troubled cardholders. But late this week, American Express told me that wasn’t the case. The company said it had also decided to stop using what it has called “spending patterns” as a criteria in its credit line reductions. "...
"American Express wouldn’t have been the first company to try cordoning off certain industries. Last year, CompuCredit, a subprime lender, got in trouble with the Federal Trade Commission for failing to disclose that it could reduce customers’ credit lines for using their cards at various establishments.
What was on CompuCredit’s no-go list? Marriage counselors, tire retreading and repair shops, bars and nightclubs, pool halls, pawnshops and massage parlors, among others. "
The Globe story, Lenders abruptly cut lines of credit, focuses on customers who have had their cards suspended.
"Many of the credit lines being taken away or reduced have not been used recently, according to people who track the business. Dennis Moroney of TowerGroup, a Needham research firm, called it the "kitchen drawer" syndrome because some consumers keep cards they don't need or don't use often. Card issuers are trying to rein in such accounts before they get tapped for emergencies in the slumping economy, Moroney said."...
"...if you have a card you haven't used in a while that you want to keep, ... "Buy something inexpensive and pay it off that month." "
The NY Times story, American Express Kept a (Very) Watchful Eye on Charges , reports
"In some instances, if it didn’t like what it was seeing, the company has cut customer credit lines. It laid out this logic in letters that infuriated many of the cardholders who received them. “Other customers who have used their card at establishments where you recently shopped,” one of those letters said, “have a poor repayment history with American Express.”
"It sure sounded as if American Express had developed a blacklist of merchants patronized by troubled cardholders. But late this week, American Express told me that wasn’t the case. The company said it had also decided to stop using what it has called “spending patterns” as a criteria in its credit line reductions. "...
"American Express wouldn’t have been the first company to try cordoning off certain industries. Last year, CompuCredit, a subprime lender, got in trouble with the Federal Trade Commission for failing to disclose that it could reduce customers’ credit lines for using their cards at various establishments.
What was on CompuCredit’s no-go list? Marriage counselors, tire retreading and repair shops, bars and nightclubs, pool halls, pawnshops and massage parlors, among others. "
The Globe story, Lenders abruptly cut lines of credit, focuses on customers who have had their cards suspended.
"Many of the credit lines being taken away or reduced have not been used recently, according to people who track the business. Dennis Moroney of TowerGroup, a Needham research firm, called it the "kitchen drawer" syndrome because some consumers keep cards they don't need or don't use often. Card issuers are trying to rein in such accounts before they get tapped for emergencies in the slumping economy, Moroney said."...
"...if you have a card you haven't used in a while that you want to keep, ... "Buy something inexpensive and pay it off that month." "
Sunday, February 1, 2009
Market for legal services: changing incentives?
The NY Times reports that more corporate legal work by outside law firms may be starting to be on a fixed fee or performance basis, rather than by the number of hours worked: Billable Hours Giving Ground at Law Firms.
"Clients have complained for years that the practice of billing for each hour worked can encourage law firms to prolong a client’s problem rather than solve it. But the rough economic climate is making clients more demanding, leading many law firms to rethink their business model."...
"Many smaller firms and solo practitioners have long offered to perform services, like mortgage closings, for flat fees. Plaintiff lawyers also often work on a contingency basis, receiving a percentage of any awards."...
"In litigation, firms that charge by the hour can suffer if they are too successful and end a lawsuit — and the stream of payments from continuing work — too quickly. One law firm that recently collapsed, Heller Ehrman, was hurt in part because a number of cases had settled."
If there is indeed a change in how corporate law is bought and sold, it will be interesting to see if this affects the number of cases that are settled without going to trial.
"Clients have complained for years that the practice of billing for each hour worked can encourage law firms to prolong a client’s problem rather than solve it. But the rough economic climate is making clients more demanding, leading many law firms to rethink their business model."...
"Many smaller firms and solo practitioners have long offered to perform services, like mortgage closings, for flat fees. Plaintiff lawyers also often work on a contingency basis, receiving a percentage of any awards."...
"In litigation, firms that charge by the hour can suffer if they are too successful and end a lawsuit — and the stream of payments from continuing work — too quickly. One law firm that recently collapsed, Heller Ehrman, was hurt in part because a number of cases had settled."
If there is indeed a change in how corporate law is bought and sold, it will be interesting to see if this affects the number of cases that are settled without going to trial.
Saturday, January 31, 2009
Academic marketplace: Reactions to the recession
The Globe reports: Despite crunch, some colleges go on hiring spree.
"Amid the gloom of hiring freezes across much of academia, some New England colleges are seizing on the opportunity to scoop up the brightest newly minted PhDs to bolster their faculty ranks and gain ground on their competition.
"A few are recruiting tenure-track faculty in droves even as the majority of colleges, most notably Harvard, have curtailed faculty searches as part of belt-tightening measures. Northeastern is conducting a search for 46 professors in fields ranging from nanotechnology to public health. Tufts is moving forward with 52 faculty searches. Others, including Emerson, Holy Cross, and Amherst, have created teaching positions." (emphasis added:(
"Amid the gloom of hiring freezes across much of academia, some New England colleges are seizing on the opportunity to scoop up the brightest newly minted PhDs to bolster their faculty ranks and gain ground on their competition.
"A few are recruiting tenure-track faculty in droves even as the majority of colleges, most notably Harvard, have curtailed faculty searches as part of belt-tightening measures. Northeastern is conducting a search for 46 professors in fields ranging from nanotechnology to public health. Tufts is moving forward with 52 faculty searches. Others, including Emerson, Holy Cross, and Amherst, have created teaching positions." (emphasis added:(
Friday, January 30, 2009
Open access journals
To continue yesterday's discussion about the Market for ideas, academic journals present an interesting set of institutions. The Chronicle of Higher Ed reports on the open access journal movement: Physicists Set Plan in Motion to Change Publishing System (and, permanently, here for subscribers). The story concerns SCOAP3 - Sponsoring Consortium for Open Access Publishing in Particle Physics, which seeks to set up a non-profit organization that will fund cooperating journals.
"Here's the pitch. Libraries would stop paying for subscriptions to journals in high-energy physics. Instead, each library or government agency would pay a set amount every year to the new nonprofit group. Each journal publisher would then apply for a portion of that money, submitting a bid spelling out how much it would cost them to review, edit, and publish their articles that year (building in some profit as well). To win a bid, the journals would commit to publishing their articles free online for anyone to see."
"Several factors make high-energy physics an ideal field for this experiment. For one thing, it is a relatively small and tight-knit research area, where almost all major papers appear in just six journals. "
There are clearly obstacles in the path of this plan. But Arxiv, the physics/math working paper archive now hosted at Cornell, seems to have had somewhat more success than the similar effort in Economics at WUSTL, pioneered by Bob Parks, so it will bear watching.
(On the subject of working papers in economics, RePEc and SSRN have filled some of that space in economics, and there are a growing number of open access journals, among them Theoretical Economics.) See also Ted Bergstrom's Journal Pricing Page for a discussion of other proposals for redesigning the market for scientific publishing.
"Here's the pitch. Libraries would stop paying for subscriptions to journals in high-energy physics. Instead, each library or government agency would pay a set amount every year to the new nonprofit group. Each journal publisher would then apply for a portion of that money, submitting a bid spelling out how much it would cost them to review, edit, and publish their articles that year (building in some profit as well). To win a bid, the journals would commit to publishing their articles free online for anyone to see."
"Several factors make high-energy physics an ideal field for this experiment. For one thing, it is a relatively small and tight-knit research area, where almost all major papers appear in just six journals. "
There are clearly obstacles in the path of this plan. But Arxiv, the physics/math working paper archive now hosted at Cornell, seems to have had somewhat more success than the similar effort in Economics at WUSTL, pioneered by Bob Parks, so it will bear watching.
(On the subject of working papers in economics, RePEc and SSRN have filled some of that space in economics, and there are a growing number of open access journals, among them Theoretical Economics.) See also Ted Bergstrom's Journal Pricing Page for a discussion of other proposals for redesigning the market for scientific publishing.
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