The Economic Logic of Anonymity and Pseudonymity

My previous post talks about my recent NBER working paper with Muriel Niederle and Utku Unver. Earlier this week I received an email that this paper was featured on another blog, Economic Logic. The email was signed "Economic Logician." And when I looked carefully at the blog itself (which I had read before; it's one of the economics blogs I have on my bookmark list), I couldn't find any identifying information about the blogger, even after clicking on the links through which blog owners often identify themselves.

So I replied to the email asking "Are you blogging anonymously, incidentally? (May I ask why?)"

I received the following reply: "Yes, I remain anonymous. This allows me more liberty in my writing, and I hope the blog will gather reputation on its own merit, instead of being attached to a name."

This got me thinking about the market design aspects of anonymity , and its not so close relative pseudonymity. When I asked EL about his/her anonymity, I was referring of course to the fact that I don't know who he/she is, what his/her day job is, which personal pronoun is appropriate, etc. But when EL speaks of the blog developing a reputation, he/she is referring to the fact that the posts are under the repeated-use pseudonym Economic Logician (with respect to which the name of the blog is an eponym), so that each post can both rely on and help establish the reputation of the same unidentified/pseudonymous person who wrote the previous posts.

Lots of internet markeplaces allow pseudonymous usernames, and still manage to foster reputation building and trust. (In an earlier post I wrote about the redesign of eBay's reputation system from one in which feedback could only be identified or pseudonymous to one in which it can also be anonymous: "ENGINEERING TRUST - RECIPROCITY IN THE PRODUCTION OF REPUTATION INFORMATION," - by Gary Bolton, Ben Greiner, and Axel Ockenfels. ) That paper notes how being able to identify who left feedback led to reciprocal feedback, either jointly positive or jointly negative, which reduced the informativeness of certain kinds of feedback.

There are other contexts in which anonymity is encouraged or allowed (and not just in comments to blogs). The refereeing of academic papers for publication is an example in which we seem to believe that the benefits (increased frankness) of anonymity may overcome the costs (e.g. an increase in self-serving reviews).

Some journals have double-blind refereeing, in which the authors as well as the referees may choose to remain anonymous during the review process (e.g. by deleting their names from the cover sheet, and also not posting the paper where Google can find it). Google now essentially prevents journals from enforcing anonymity on authors, since it gives authors a way to identify themselves if they wish, despite the requirement that their names and affiliations may not appear on the submitted paper. I think that preventing referees from knowing who the authors are would be a mixed blessing; it would level the playing field in certain desirable ways, but it might also remove information that would be valuable in evaluating the paper. (For example, if you read a paper saying that, on balance, the conclusions of Roth (1977) need to be revisited, it might be useful for you to know if Roth is one of the authors.)

Of course, marketplace rules may allow participants to be anonymous from some parties and not from others, and internet privacy rules are concerned with who can choose how individuals are identified. (See this nice take on the famous New Yorker cartoon about anonymity on the internet.)

So, anonymity has its uses, as does identity, and pseudonymity has some of the advantages and disadvantages of each. I'll keep blogging under my natural name for the time being, since, especially when my posts are unclear or incomplete, they may get some helpful context from the fact that they are linked to me and the work I do .

Unraveling

Many markets have trouble coordinating on the timing of transactions, and this has led to market failures in markets as diverse as the market for college football bowls, and the labor market for federal court clerks, and in various medical markets, such as (most recently) gastroenterologists and orthopaedic surgeons.

Why do transactions in some markets happen inefficiently early? Here are the concluding paragraphs from our recent NBER working paper Unraveling Results from Comparable Demand and Supply: An Experimental Investigation
by Muriel Niederle, Alvin E. Roth, M. Utku Unver - #15006 (LS)

" It has been known at least since Roth and Xing (1994) that many markets unravel, so that offers become progressively earlier as participants seek to make strategic use of the timing of transactions. It is clear that unraveling can have many causes, because markets are highly multidimensional and time is only one dimensional (and so transactions can only move in two directions in time, earlier or later). So there can be many different reasons that make it advantageous to make transactions earlier. There can also be strategic reasons to delay transactions; see e.g. Roth and Ockenfels (2002) on late bidding in internet auctions.
Thus the study of factors that promote unraveling is a large one, and a number of distinct causes have been identified in different markets or in theory, including instability of late outcomes (which gives blocking pairs an incentive to identify each other early), congestion of late markets (which makes it difficult to make transactions if they are left until too late), and the desire to mutually insure against late-resolving uncertainty. There has also been some study of market practices that may facilitate or impede the making of early offers, such as the rules and customs surrounding "exploding" offers, which expire if not accepted immediately.
In this paper we take a somewhat different tack, and consider conditions related to supply and demand that will tend to work against unraveling, or to facilitate it. There seems to be a widespread perception, in markets that have experienced it, that unraveling is sparked by a shortage of workers.
But for inefficient unraveling to occur, firms have to be willing to make early offers and workers have to be willing to accept them. Our experiment supports the hypothesis that a shortage of workers is not itself conducive to unraveling, since workers who know that they are in short supply need not hurry to accept offers by lower quality firms. Instead, in the model and in the experiment, it is comparable supply and demand that leads to unraveling, in which attention must be paid not only to the overall demand and supply, but to the supply and demand of workers and firms of the highest quality. This seems to reflect what we see in many unraveled markets, in which competition for the elite firms and workers is fierce, but the quality of workers may not be reliably revealed until after a good deal of hiring has already been completed."

http://papers.nber.org/papers/W15006

Postscript: Skip Sauer over at The Sports Economist has a post about a 9th grader offered a college football scholarship in what is becoming a seriously unraveled market.

The market for beauty queens

Beauty queens are marketed as prizewinners, but they are also employees, as the firing of Miss California makes clear: Donald Trump to Miss California: You're fired.

"Wednesday brought another breathtaking twist to the saga of Carrie Prejean, the now-former Miss California USA who got the ax from the pageant's boss Donald Trump ...for not honoring her pageant commitments.
Trump told TMZ.com that Prejean refused to appear at roughly 30 events to which she was contractually bound. ...

Pageant officials say Tami Farrell, first runner-up to Prejean, will take over those responsibilities. Which, to be honest, nobody really understands. But they sound very important."

Theft and armed robbery

Theft is such a threat to civilization that it made it into the ten commandments. As an opportunistic act it must be as old as property, but it probably didn't become a profession until after markets allowed the development of concentrated and transportable forms of wealth. Even so, theft as a profession, and its close cousin, armed robbery, must be at least as old as agriculture.

So for a very long time, at least for some kinds of items, part of marketplace design includes ways to thwart thieves, or catch them. But security is costly in many ways, not least being that if you make your marketplace hard for thieves to enter, you may also discourage customers. So losses from theft (and payment of theft insurance premia) are often a cost of doing business, leading to the occasional story that could be a movie: Well-dressed thief steals €6 million worth of Chopard jewels in Paris.

"Suspicion has fallen on the Pink Panthers, the name given to a diffuse international gang with origins in the Balkans. French police describe the group’s crimes as lightning-fast hold-ups: daring, but planned down to smallest detail.
In December thieves staged a €74 million jewel theft at the Harry Winston boutique in the Avenue Montaigne, near the Place Vendôme, off the Champs-Elysees. Four robbers, two disguised as women, calmly emptied the store as staff and customers lay on the floor.
The Harry Winston raid came a year after the same store was attacked by robbers who forced staff to empty its safes, taking at least €10 million worth of jewels.
The Pink Panthers have accumulated loot worth up to €200 million in an estimated 120 attacks on stores in around 20 countries since their first robbery in Mayfair in London in 2003.
Two weeks ago Paris police arrested two Serbians, alleged to be Panthers, and charged them with carrying out armed raids on stores in Monaco, Switzerland and Germany.
Last Thursday a former soldier from Montenegro, also said to be a Panther, was sentenced to 15 years in jail for a 2005 jewel robbery in the Riviera resort of Saint-Tropez. The court in Draguignan also fined Dusko Martinovic €130,000 for the raid, which he carried out in 90 seconds with two accomplices who have not been caught. The trio escaped into the Mediterranean aboard a speed boat before the police reached the boutique that they had emptied.
The world record for a jewellery theft remains the $100 million (£62 million) robbery of diamonds in Antwerp, Belgium, in 2003. "

While diamonds can presumably be resold easily, some items, like an iconic artwork or a thoroughbred race horse are too identifiable. But that doesn't always protect them from theft: sometimes thieves steal them and try to ransom them back to the original owners, and sometimes they may be destined to be enjoyed privately by wealthy criminals in distant places. Here's one list of The 10 Most Infamous Heists, some of them still unsolved.

Update: The Times of London reports on a modern form of theft: Criminal gang bought own music on iTunes and Amazon using stolen cards.
A gang of criminal musicians bought their own music online with stolen credit cards, and received royalties...

Market for wedding guests

Here's an unusual market for temporary workers:
Japanese company does thriving trade in 'fake friends'

"Along with choosing a dress and booking a honeymoon, there is one other item to add to the wedding checklist in Japan: hiring fake friends.
Office Agents, a Tokyo-based company, rents out friends, work colleagues and even relatives to pad out the guest list.
Brides or grooms who want to impress their prospective partners with their sheer volume of friends are among those secretly padding the guest list with fakes.
The recession has also boosted the popularity of the service. With unemployment rising and a growing number of Japanese in part time jobs, people rent fake bosses or colleagues."

Are paperless tickets scalp proof?

The latest development in the ongoing war between ticket originators, fans, and scalpers is the ticketless ticket.

"Ticketmaster is going to try issuing paperless tickets to reduce scalping. Resale companies are not amused.
http://marketplace.publicradio.org/display/web/2009/06/08/pm_ticketmaster/
"JILL BARSHAY: Miley Cyrus hopes she can cut out scalpers from her next tour by selling only paperless tickets. Ones you can't give or sell to someone else. Ones you buy online and pick up at the concert gate by showing your driver's license and a credit card.
Sean Pate is the spokesman for StubHub, the big ticket resale site, owned by eBay. He's predicting paperless tickets will mean long lines on concert night.
SEAN PATE: You know, we're going to see a lot of inconveniences for the fans, especially of Miley Cyrus's demographic. Her fans more than likely don't own credit cards.
That means mom or dad may have to listen to the concert too. Not to mention how mortifying it is for a 12-year-old to be seen with her parents.
Critics say some concerts will still sell out quickly. And prices will be jacked up. The question is by whom. Don Vaccaro is the CEO of TicketNetwork, another resale site. He points out that Miley Cyrus's management company, which is owned by Ticketmaster, is selling prime seats on its Web site starting tomorrow for $295."

Update: Here's the (June 16, 2009) take of the NY Times Ethicist column: Miley Cyrus Takes on the Scalpers.

HT: Steve Leider

Anesthesia was once repugnant

A wonderful story by Mike Jay in the Boston Globe, The day pain died , recounts how the first surgical use of anesthesia came long after its pain-killing properties were known. An impediment to its use, however, was the thought that pain relief was repugnant, i.e. there was something wrong in having a pain free operation.

Here is the beginning of Jay's story, and the end (emphasis added):
"The date of the first operation under anesthetic, Oct. 16, 1846, ranks among the most iconic in the history of medicine. It was the moment when Boston, and indeed the United States, first emerged as a world-class center of medical innovation. The room at the heart of Massachusetts General Hospital where the operation took place has been known ever since as the Ether Dome, and the word "anesthesia" itself was coined by the Boston physician and poet Oliver Wendell Holmes to denote the strange new state of suspended consciousness that the city's physicians had witnessed. The news from Boston swept around the world, and it was recognized within weeks as a moment that had changed medicine forever.
But what precisely was invented that day? Not a chemical - the mysterious substance used by William Morton, the local dentist who performed the procedure, turned out to be simply ether, a volatile solvent that had been in common use for decades. And not the idea of anesthesia - ether, and the anesthetic gas nitrous oxide, had both been thoroughly inhaled and explored. As far back as 1525, the Renaissance physician Paracelsus had recorded that it made chickens "fall asleep, but wake up again after some time without any bad effect," and that it "extinguishes pain" for the duration.
What the great moment in the Ether Dome really marked was something less tangible but far more significant: a huge cultural shift in the idea of pain. Operating under anesthetic would transform medicine, dramatically expanding the scope of what doctors were able to accomplish. What needed to change first wasn't the technology - that was long since established - but medicine's readiness to use it.
Before 1846, the vast majority of religious and medical opinion held that pain was inseparable from sensation in general, and thus from life itself. Though the idea of pain as necessary may seem primitive and brutal to us today, it lingers in certain corners of healthcare, such as obstetrics and childbirth, where epidurals and caesarean sections still carry the taint of moral opprobrium. In the early 19th century, doctors interested in the pain-relieving properties of ether and nitrous oxide were characterized as cranks and profiteers. The case against them was not merely practical, but moral: They were seen as seeking to exploit their patients' base and cowardly instincts. Furthermore, by whipping up the fear of operations, they were frightening others away from surgery and damaging public health.
The "eureka moment" of anesthesia, like the seemingly sudden arrival of many new technologies, was not so much a moment of discovery as a moment of recognition: a tipping point when society decided that old attitudes needed to be overthrown. It was a social revolution as much as a medical one: a crucial breakthrough not only for modern medicine, but for modernity itself. It required not simply new science, but a radical change in how we saw ourselves."
...
"Once Morton had successfully demonstrated his technique of ether anesthesia, it was quickly seen that its implications reached considerably beyond the dental business. Before 1846 was out, it had been successfully tried by the most celebrated surgeon in Britain, Robert Liston, who pronounced that the new "Yankee dodge" had "the most perfect and satisfactory results" and was "a fine thing for operating surgeons." It was enthusiastically championed by an emerging generation of medical humanitarians, and the new buzzword "anesthesia" crystallized the sense of novelty and medical miracle. Chemistry had, as Thomas Beddoes had prophesied, come to rule over pain.
Despite its successes, resistance to the idea didn't vanish overnight. Until the end of the century, some doctors would maintain that pain had a necessary role in the preservation of life, but from 1846 onward they were outnumbered by those who insisted that it was the job of a physician to inflict as little of it as possible. Some religious voices would hold out for a good deal longer: Pope Pius XII would confirm that "the Christian's duty of renunciation and of interior purification is not an obstacle to the use of anaesthetics" only in February 1957.
Despite the long resistance, that demonstration in the Ether Dome marked a transition that was as irreversible as it was historic. The practice of medicine finally achieved a goal that it had, until that moment, never truly been able to imagine: loosening pain's age-old stranglehold on humanity. And in a sense, the invention was the least of it. The real milestone witnessed in Boston that day was the moment when culture had finally caught up with chemistry."

The article comes from Jay's new book The Atmosphere of Heaven.

Update: Dubner at Freakonomics follows up on this post and draws some interesting comments, including this one:

“So discredited had narcotic drugs become by the middle of the seventeenth century that when Nicolas Bailly, a barber-surgeon of Troys, administered a narcotic potion to a patient before an operation, the venture aroused widespread condemnation. Bailly was arrested and fined for practicing witchcraft. The stupefaction of patients by administration of herbal remedies was then forbidden in France under heavy penalty.”
(Victor Robinson, M.D.: Victory Over Pain. A History of Anesthesia, London: Sigma, 1947. p.40)— kaloniki "

Matchmaking in Gaza, and Bollywood

Marriage is important everywhere, and matching and matchmaking seems to have a lot in common across disparate cultures, although the design of matching markets certainly have some local twists, including who the parties to the match are, e.g. the young couple themselves, or their parents:

Militant Hamas Gets Into Matchmaking Business
"The applicants, who pay a fee of $10-$70, are divided into categories according to their eligibility. Women under 25 are easiest to marry off; more challenging are women over 30 and divorcees.
But in a nod to Gaza's grinding poverty triumphing over its conservative culture, there is a special file for women with jobs. Bringing home a salary in Gaza can trump any other category, matchmakers say.
In the women's application, they describe their ideal man. Most ask for a devout Muslim with a job and his own apartment, a top find in crowded Gaza.
Women also must describe their appearance and answer a killer question: ''Do you consider yourself pretty according to Gaza standards?''
The ideal of beauty in Gaza means tall and fair-skinned with blue or green eyes and light-colored hair -- and that's what men usually ask for. But most Gaza women have dark hair and bronze skin.
''If we see a girl that appears to match (a man), but she's not physically what he wants, I'll call him and say, 'Well, she's pretty, but she's dark.' Or 'she's short, but she's white.' We encourage them to be a bit more realistic,'' Khalil said."
...
"Around 40 men a month turn to Tayseer in search of a wife. When association employees think there's a match, they quietly organize a meeting, with employees acting as chaperones in compliance with Islamic law. If the couple like each other, Gaza's traditional courtship kicks in.
The man's relatives visit the woman's family, saying that a well-meaning stranger told them of a girl wanting to marry. The matchmakers are not mentioned, because their role is still taboo, said Khalil."

Meanwhile, in another part of the world, there is a different challenge to a different tradition of arranged marriage (the photo of the prospective bride suggests some other differences between India and Gaza also):
Bollywood's Rakhi Sawant takes search for a husband to prime time TV
"Rakhi Sawant, a Bollywood dancer, actress and television host, has refused a union brokered by her parents. Instead, she has promised to find the perfect man herself — with the aid of a prime time TV series.
Rakhi Ka Swayamvar (Rakhi’s Search for a Husband) has attracted more than 12,500 aspirant grooms from across the subcontinent. The show is due to begin later this month but the outspoken celebrity’s promise to marry on air has already whipped up controversy in what remains a rigidly conservative country."
...
"A recent survey by the International Institute for Population Sciences found that 95 per cent of marriages in India today are arranged by the families of the bride and groom. More than 70 per cent of married women between the ages of 15 and 24 said that they were never asked their views on their future husband before their wedding. About a quarter said that their first sexual experience within marriage was forced."

Related recent posts:
Marriage and dating online in Korea, Marriage and dating online (in the U.S.), Marriage market in India

University admissions in the UK: admissions formulae

I recently wrote about University admissions in the UK , from the point of view of the centralized process by which applications are made, university decisions are communicated, and student responses are collected. Universities' admissions decisions are decentralized, however; each university makes its own. A story in the Times of London, with accompanying links to documents obtained through Britain's Freedom of Information Act, gives an unusually detailed look at how top universities are making those decisions: Top schools boycott ‘biased’ Durham--The leading university's entry system handicaps high performers.

The article discusses first Durham University, and then Cambridge and Oxford. Some controversy attaches to these universities' weighted ranking systems that now give extra points to students who come from low achieving schools.

Digital Economy Symposium at HBS

On June 19 there will be a symposium on the Digital Economy at HBS; the program is at the link.

The organizers are John Deighton, Karim Lakhani, and Misiek Piskorski.

I plan to talk about "Computationally Assisted Markets."

Fertility and religion

The Bible encourages reproduction, but puts bounds on sexuality, and so religious couples seeking treatment for infertility need to navigate carefully. For orthodox Jews, the Puah Institute (named after one of the two Hebrew midwives in the story of the birth of Moses) helps with this navigation. Here's a story about rabbinical supervision of medical fertility treatments involving in vitro fertilization: How to make a kosher baby.

Some of the particular issues that arise with in vitro fertilization involve how to be sure, in a legal sense, who the parents are. (This is presumably also one of the reasons behind the restriction of sex to marriage in so many cultures, when sex was the only reproductive option.)

The problem of how to integrate new technological and commercial possibilities with ancient customs, rules, and practices is very clear when those are religious in nature. But similar problems also present themselves in secular society, in dealing e.g. with issues like surrogacy, or compensation for sperm and egg donors in ways that navigate around repugnance.

In only slightly related news (but still on the subject of being fruitful, and making sure your children have the right parents), the cost of arranged marriages is going up among Israel's most orthodox Jews: Haredi matchmaking rates skyrocketing

Protecting the commons with 'altruistic punishment': scam baiting

Ernst Fehr and his students and colleagues have conducted a broad inquiry into the idea that many public goods may be maintained in part by a widely held motivation to punish transgressors, even when such punishment is costly. It's an idea that has engaged evolutionary psychologists and anthropologists as well, and has generated some controversy.

An example of altruistic punishment in practice is the internet sport of scam baiting: Baiting Nigerian scammers for fun (not so much for profit).
"When your hobby is baiting 419 scammers (also known as Nigerian scammers or advance-fee fraudsters), a death threat isn't cause for concern—it's a trophy worth bragging about to your friends.
Scam baiters are the vigilante enforcers who come together to waste hours, weeks, or months of 419 scammers' lives for nothing more than the satisfaction of knowing that they are distracting them from real victims. Though the world of 419 scams has existed since long before the Internet, people continue to fall for scammers in droves—certainly, scammers are making millions of dollars every year by promising money, goods, and romance that they never deliver on. That's part of why scam baiting has actually become a somewhat popular pastime online, with thousands of users flocking to scam baiting forums to share stories and ideas on how to string along more scammers. And hey, why not? Most of us end up spending too much time screwing around on the Internet anyway—these folks just use that time to make scammers miserable."

If you want to play (the next time you get an email offering to transfer millions of dollars to your account*), one of the central sites seems to be 419Eater.com.

*For those of you who never look in your junk mail folder, here's a good example from mine:
"Sir / Madam,
I am Barrister Adamu Azeez, an attorney to late Richard Lim a foreigner who is an Engineer with Nigerian National Petroleum Corporation (NNPC) here in Nigeria. Late Mr. Richard Lim has an account with United Bank for Africa Plc, Nigeria.
I received a memo early this year from the Bank Remittance Department for an interview about (US$25.500,000.00) (TWENTY FIVE MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS ONLY) that belongs to my client Late Mr. Richard Lim ,the bank informed me on their policy to freeze the account of Late Richard Lim, I am in a position to redirect the (US$25.500,000.00) to any foreigner's account any where because they was no Next of Kin in his entire file within the bank and his account has been dormant for years which is against the policy of the Bank.
I am contacting you because of the need to involve a foreigner as the foreign beneficiary to that fund and also to stand as the Next of Kin to the deceased. I have resolved to share the money in this ratio.
(1) 65% for me.
(2) 30% for you.
(3) 5% for the Remittance Manager in the bank who has agreed to guide us for the success of our objectives.
(4) 5% for any expenses both party might incur during the processing of this transaction.

I will need your full name and address including telephone and fax number for the internal processing of the fund transfer and the internal processing of the required documents to back you up for the claim of the fund in receipt of all the required information from you which was given above. I will give you further details on the entire process when I receive your positive response."

HT: jeff at Cheap Talk

Same sex marriage in New Hampshire

Once again, an ancient repugnance is annulled by legislators, not just judges: New Hampshire Legalizes Same-Sex Marriage .
"The New Hampshire legislature approved revisions to a same-sex marriage bill on Wednesday, and Gov. John Lynch promptly signed the legislation, making the state the sixth to let gay couples wed. "

Real estate brokers and the internet

Now that many houses for sale can be viewed on the internet, it is entirely possible to conduct a search for a house without the assistance of a real estate broker. But a peculiarity of the real estate market is that a buyer who does not use a broker may not reduce the fees paid in the transaction. A typical seller's contract with the broker who helps put the house on the market (the "originating broker") is for 6% of the selling price. If the buyer is accompanied by an agent, this fee is split between the two. If the buyer comes without an agent, the 6% is paid entirely to the originating broker.

An internet brokerage firm has seen this as an opportunity. Redfin.com offers to represent buyers and refund 50% of Redfin's half of the fee set by the originating broker and seller. So, if the fee is the conventional 6% of the sales price, Redfin as the buyer's broker would get 3% and refund 1.5%. That is, if you are on the verge of buying a house for a million dollars without a broker, but instead close the deal through Redfin, they will give you $15,000. That's not a bad reason to have an agent.

Obviously this is inefficient from the point of view of the buyer, seller, and originating broker (since if they could negotiate efficiently they could divide among themselves the 15K that Redfin keeps). But the final moments of the negotiations are tense ones, in which the reservation values of all three parties are unknown, so this may not be the kind of 3-way negotiations in which we should expect efficiency. So Redfin may have a good business.

I keep expecting the real estate market to undergo some fundamental change, and maybe this is a sign of pressure building.

HT: Michael Schwarz

p.s. for completeness, I note that Redfin also offers discounted sell-side services, part of which come with a fee that is not contingent on whether or not a sale results.

Market for bodyguards

A big cost of having full time bodyguards is overtime pay, particularly for those who travel a lot, or have an active nightlife. So, in an economy move, Scotland Yard is increasing the number of protection officers assigned to protect the British Royals, whose younger members apparently need several shifts: Royal protection unit boosted by 150 extra armed protection officers .
"Metropolitan Police protection officers for the Royal family, diplomats and politicians work up to 70 hours a week, particularly on foreign trips, and receive overtime payments of up to £30,000 a year.
A decision to boost the 400-strong team by up to 150 officers is the result of a review that has also raised questions about the costs of looking after junior members of the Royal family."

Market for poets

The market for poets is of course not the same as the market for poetry, and a recent NY Times article looks at how poets fit into academia, as professors of poetry: Poets, Academia: A Couplet in Conflict.
The article discusses the notion that poets might be expected to be more drunken and seductive than, say, critics. But in other respects, the intersection of poetry and academia is a lot like in many other fields, in which scholars not only do scholarship, but teach.

That being said, the balance between scholarship and teaching, like the balance between discovery and stewardship, and between the ivory tower and the open marketplace, is quite different in different disciplines. But, in each discipline, the various roles that universities play in our society involve finding such balances.

I can't tell how much the non-academic market for poets and poetry has been changed since the endowment in 2003 of the Poetry Foundation (what rhymes with a hundred million dollars?). But here's a 2006 article in the Globe: Poets, Inc., which notes about Poetry magazine that "The magazine's efforts to engage a broader audience seem to be working. When Wiman took over Poetry in October 2003, the magazine's circulation was 11,000. Today it stands at roughly 29,000."

One thing to admire about the poetry biz is that there's a technical term for a bad poet: poetaster (rhymes with "do it faster").

(Contest: what should be the equivalent word for a bad economist? Econo... misser? ...messer?)

Chicago parking: private metering, public/private enforcement

The City of Chicago recently sold the right to manage its parking meters for the next 75 years to a private company, for a payment of $1.15 billion. The city retains the right to make parking laws and enforce them, although some aspects of enforcement are now shared. Not surprisingly, there's some trouble in the Windy City: Long a Driver’s Curse, Chicago Parking Gets Worse .

Not only have meter rates gone up, enforcement seems to have become more aggressive. Aside from the fact that Chicago looks to parking fines for revenue in tough economic times, there appear to be market design reasons for this.

Here is the agreement between the city and the contractor. Section 3.2e on page 40 reveals that the contractor as well as the city may issue tickets to illegally parked cars at meters.

So now there are two motivations for issuing tickets; the city issues them to raise revenue from parking fines and to enforce the parking laws, and the contractor issues them to increase meter revenue by discouraging people from parking without paying or parking after the payment has expired.

The city can raise revenues from fines by aggressively enforcing laws, e.g. about how many inches you may park from the curb. The contractor can raise revenues by ticketing cars promptly after meters expire. (Both the city and the contractor have an interest in enforcing the laws that say you must park between the lines.)

Some problems with getting new meters (which accept credit cards) to work properly have compounded the angst.

What to do? Carry lots of quarters when you drive in Chicago, at least until things settle down.

Harvard's "Z-list," waitlist admission with a difference

Even Harvard gives favorable attention to legacies (children of alums), you are no doubt shocked to learn. But, right around this time of year, as offers are made off the waiting list, some of those alumni children, and others with certain special late-season Harvard offers, are being given a potentially hard choice: The Back Door to the Yard Z-list: A legacy-heavy special admissions program .

The Z list students are admitted after a year delay, on the unusual condition that they don't attend college anywhere else in the intervening year. The Crimson story (from several years ago) described the program, and found that it included a substantial proportion of legacy students. (emphasis added):

"This group of students, known within Byerly Hall as the “Z-list,” are plucked off the waitlist any time from May to August—after they have accepted offers of admission at other universities—and informed that if they are willing to take a year off, they can enroll at Harvard the following September.Harvard admissions officers say they choose to “Z” students—it’s a verb—when there is a consensus that the College cannot bear to reject them but there is simply no bed available for them immediately after they graduate high school.“There’s no formula to this and there’s not much in common [between Z-list students],” says Director of Admissions Marlyn McGrath Lewis ’70-’73. “It makes us feel we made some effort to get them here.”But if you talk to enough of these students whom the admissions office makes a special effort to bring to Cambridge, you’ll find they do have something in common: Their parents went to Harvard."
...
"Other top colleges have special admissions programs in which applicants are asked to take time off or enroll elsewhere and then transfer, but no other Ivy requires students to take a year off and gets them to come in such high proportions—a testament to the College’s perennial superiority in admissions.And if a year off makes students more mature and better able to contribute to the College, then the Z-list allows Harvard to placate powerful parents without diluting the quality of its class."
...
"“A very high percentage are alumni cases,” agrees Susan G. Case, a college counselor at Milton Academy, which in some years has sent Harvard a quarter of the Z-list all by itself. “There isn’t necessarily an academic pattern, but it’s usually institutional needs. That’s a phrase they use internally.”"

Legacy admissions in public schools

California leads the way again: here's some school choice news from LA. 'Legacy' admissions OK'd in public grade schools, Calif. weighs pros, cons of alumni preference policy.

"Emulating a controversial practice at many colleges, two high-achieving public school districts in California are giving preference to the children of alumni.

"The Beverly Hills Unified School District and the Santa Monica-Malibu Unified School District have adopted legacy admissions policies for children of former students who live outside their enrollment boundaries.
The policies appear to be the first in the nation at public schools, education observers say.
The programs vary slightly, but leaders of both districts say they hope to raise money by forging closer ties with alumni who may be priced out of their hometowns as well as with grandparents who still live there.
In each district, nonresident legacy students will make up a tiny percentage of the student population, officials said.
...
Many universities and colleges have long offered preferences to the children, grandchildren, and siblings of alumni, accepting them at greater rates than applicants overall, sometimes with lower grades and SAT scores.
Universities' arguments for legacy admissions - to nurture connections with alumni and their checkbooks - have been upheld as constitutional.
But the policies can cause campus controversy, leading some schools, including the University of California in 1998, to vote to abolish them.
...
Beverly Hills adopted its legacy policy on a 3-2 vote last spring, allowing the children of anyone who attended city schools at least four years and whose grandparents have lived in the city for at least a decade to apply for permits. Eleven students, among 5,100 enrolled in district schools, attend school under the program.
Fenton said he proposed the idea to reconnect the district with grandparents who live within its borders and no longer have a direct stake in the city's schools yet are asked to vote on school measures, such as a $334-million facilities bond passed in November."
...
"To round out classes and maximize state funding, the 12,000-student Santa Monica-Malibu district has long offered permits to the children of district, city, and community college employees, siblings of current students, and others who moved away.
After those, it also has given permits to some nonresident students without connections to the district.
But the board voted unanimously in April to give alumni children priority over this last category of students, starting next school year.
...
"Critics are skeptical.
"It would be more efficient from a fund-raising standpoint to auction off education slots on eBay than to create a legacy preference," said Michael Dannenberg, director of education policy at the nonpartisan New America Foundation."

Opposite of repugnance: Protected transactions

I've been thinking lately about transactions that are the opposite of repugnant, i.e. transactions that, as a society, we often seek to promote, for reasons other than efficiency or pure political expediency.

In yesterday's post I mentioned monogamous marriage between a man and a woman, which in many countries and U.S. states is promoted over other forms of marriage (such as polygamy or same sex marriage).

Home ownership in the US is an obvious one, in this post-housing-bubble financial crisis, in which there have been Federal bailouts of the various Government Sponsored Entities like Fanny Mae and Freddy Mac, set up to promote home ownership.

Food production by small farmers, not only in the US, but also in Europe and Japan: we protect this by subsidies, price supports, government supported crop insurance programs, etc.

Fishing by small fishing boats: if we were only interested in protecting fish to keep fisheries sustainable, we might regulate fisheries by imposing seasonal limits on how much could be caught. But in many cases we also set daily limits (e.g. some fishermen on Cape Cod are limited to catch no more than 400lbs of scallops a day). This makes large, factory fishing uneconomical, and protects small local fishermen.

The right to purchase guns probably falls into this category in the U.S.

Of course, as with repugnant transactions, protected transactions may involve a lot of complications, like providing public goods and protecting rights. But it may be that to better understand which kinds of transactions may come to be regarded as repugnant, it will help to understand which kinds of transactions are sometimes protected.

Update: looking at the comments, commuting alone in a car seems worth including on the list of protected transactions in the U.S. (And thank you to Dubner at Freakonomics for his generous plug of this blog...)