Friday, February 10, 2012

Experimental game theory

Here's a retrospective "virtual special issue" of experimental papers from GEB:
Games and Economic Behavior - Virtual Special Issue on Experimental Game Theory

Thursday, February 9, 2012

And then they were seven (states that have same sex marriage)

Washington State Passes Same-Sex Marriage Bill

An ancient repugnance is toppling, first slowly and later perhaps quickly, before our eyes.

Wednesday, February 8, 2012

Medical (and pre-medical) culture: cheating on tests

While some of the very best motivated and most talented students find their way into medicine, it is also a large, well-compensated profession fed by a stream of undergraduate "pre-med" majors who grow up in a culture of exam-taking. It shouldn't be surprising if this carries over into their post-graduate years (in fact I can't even tell if this CNN headline is meant to be ironic): Exclusive: Doctors cheated on exams

"For years, doctors around the country taking an exam to become board certified in radiology have cheated by memorizing test questions, creating sophisticated banks of what are known as "recalls," a CNN investigation has found."

Tuesday, February 7, 2012

Court strikes down ban on same-sex marriage in California

Late breaking news from California: Court Strikes Down Ban on Gay Marriage in California
Once again, we see that figuring out which transactions should be legally regarded as repugnant involve some different roles for courts, legislatures, and, in the case of California, a popular referendum.

"The court ruled 2 to 1 that Proposition 8 violated the 14th Amendment of the Constitution by discriminating against a group of people, gay men and lesbians."

 "In the spring of 2008, the California Supreme Court threw out a 2000 voter proposition barring same-sex marriage. Opponents immediately marshaled their forces to get Proposition 8 on the ballot and get it passed. That proposition amended the California Constitution to bar same-sex marriage. During the period when same-sex marriages were legal in the state, nearly 18,000 couples married; their unions remain in place.  

"Judge Walker ruled in August of 2010 that the ban on same-sex marriage violated the rights of gay men and lesbians. The decision on Tuesday upheld Judge Walker’s ban and reasoning.

 "The California battle has churned on even as other states – including New York – have moved to legalize same-sex marriage in their Legislatures. Yet it has continued to attract national attention, largely because of California’s size, the state’s large and politically active gay population and the unusual coalition of lawyers who represented the case in court: David Boies, a Democrat, and Theodore B. Olson, a Republican. Before this, the two lawyers were best known as opponents in the Supreme Court battle over the 2000 election returns in Florida that resulted in George W. Bush becoming president.

 "Some gay activists have been apprehensive about taking this case to the current Supreme Court, fearful that conservative justices could lead it to codify a ban against same-sex marriage. But Mr. Boies and Mr. Olson have argued that this court would be receptive to the arguments they are making and the changing climate in the land."

New Orleans launches its new school choice process

The Recovery School District* celebrates the launch of its new school choice process today in New Orleans: Recovery School District's new application is expected to make school search easier

"After years of complaints about how headache-inducing it can be to enroll a child in public school in New Orleans, state officials have officially launched a long-promised single application for every elementary and high school in the city. Almost, that is.

"Parents looking for a place in one of the state's nearly 70 campuses in the Recovery School District will find the process much simplified. Beginning Tuesday, parents can fill out a single application ranking their top eight choices and turn it in at any school in the district.

"But there are still a handful of independent charters schools in the city that fall outside the new central enrollment system. So do the 17 schools -- some traditional, some charter -- that remain under the control of the Orleans Parish School Board.

"This means parents will still have to navigate a patchwork of separate applications and deadlines to cast the widest possible net. But state officials are nevertheless hailing the new enrollment system as a major step forward, even scheduling a kickoff event tonight with prizes and special guests.

"One of the most consistent complaints that I've heard from the community about the RSD, especially from parents coming back to the city, is just getting their kids registered," said Patrick Dobard, who took over as Recovery School District superintendent last month after serving as deputy superintendent last year. "This is something where we've heard from the community and now we're acting on it, something that was just a thought a few years ago."

"Putting the enrollment process in the hands of the Recovery District's central office is supposed to solve a number of problems. Since the agency took over schools in New Orleans back in 2005, it has gone about creating a district of autonomous charter schools that operate independently. They make their own hiring and firing decisions, set their own budgets and create their own curriculum. But allowing each school to operate its own enrollment has proved problematic.

"Parents of students with special needs often complain that charters are sometimes reluctant to accept them. The city's best charters often fill up quickly and it hasn't always been clear when applications for each of them are due. Presumably, the savvier parents could win slots at multiple schools and decide among them while others sit on waiting lists."
********************


*The Recovery School District is a special school district administered by the Louisiana Department of Education. Created by legislation passed in 2003, the RSD is designed to take underperforming schools and transform them into successful places for children to learn.

The organ transplant situation in Israel...

is confusing.
On the one hand, Haaretz reports: Dramatic increase in organ transplants recorded in Israel in 2011: The spike in donations, 64 percent more than in 2010, attributed to financial compensation program. 
"Israel had 117 kidney transplants from living donors over the past year, 64 percent more than in 2010, according to the National Transplant Center's annual report. In August 2010 living donors began receiving compensation of several thousand shekels, which may have contributed to the increase.
Compensation to living donors covers 40 days of lost wages and monetary benefits of up to NIS 30,000 for proven expenses of up to five years. "


on the deceased donor front, it also reports: Israel's Chief Rabbinate freezes plan to help determine brain death
"Health officials had hoped the Brain-Respiratory Death Law would lead to a dramatic increase in the number of families agreeing to donate their relatives' organs, the rate in 2011 rose only slightly - to 55 percent - from the 49 percent of families who agreed before the law was passed."

Monday, February 6, 2012

Ivy League Athletics

Ivy League colleges don't give athletic scholarships, but as their general level of financial aid has risen, it now competes with athletic scholarships at other schools: Financial Aid Changes Game as Ivy Sports Teams Flourish

"This renaissance in a league known as the Ancient Eight can be traced to something that has nothing to do with sports: new policies that have substantially enhanced financial aid for all admitted students, making it easier to recruit elite athletes, coaches and athletic administrators said.

The Ivy League does not award athletic scholarships, but led by endowment-rich members like Harvard, Yale and Princeton, the conference has spent hundreds of millions of dollars in additional need-based aid — with most of the universities all but eliminating student loans and essentially doubling the size of grants meant for middle-income families.

The financial-aid enhancements have had a profound effect on the quality of athletic recruits. Rosters are now fortified with top athletes who would have turned down the Ivy League in the past because they would have been asked to pay $20,000 to $30,000 per year more than at other colleges.

...
At most Ivy League institutions, families earning less than about $65,000 annually are now asked to make no contribution to their children’s education. Families making $65,000 to $180,000 might be expected to pay 10 percent to 18 percent of their annual income on a sliding scale. Ten years ago, such families would have been expected to pay almost twice as much, and their child would probably have accumulated a debt of about $25,000 after four years.
**********

Another special thing about the Ivy League, aside from their rule against awarding athletic scholarships, is that the academic standing of the athletes recruited each year is not supposed to deviate too much from the average of the regular admissions. There is a common method for measuring this, called the Academic Index, which described in this story: Before Recruiting in Ivy League, Applying Some Math

Sunday, February 5, 2012

Kidney exchange in Australia, 2011

Two reports about transplantation in Australia are now available for 2011:

The 2011 Organ Donation and Transplantation Performance Report is available at www.donatelife.gov.au/the-authority/performance-reports.
The 2011 Report from the Australian and New Zealand Organ Donation Registry is available at www.anzdata.org.au.


The first of those includes the following:

"The Australian Paired Kidney Exchange (AKX) Program commenced in late 2010. The AKX Program complements existing living kidney donor programs, and provides an opportunity for transplant to those patients who are unlikely to receive a transplant through standard programs, due to their highly sensitised antibody status.

"2011 saw a significant expansion of the AKX Program, resulting in 23 additional kidney transplants. Eight (35%) of those Australians who received an AKX transplant had less than a 1 in 10 chance to receive a kidney as part of standard donation/transplantation programs.

"The success rate of 23 actual transplants, from the initial 39 possible transplants in Australia, was one of the highest in the world in 2011.

"The 16 individuals who did not progress to transplant did not proceed for clinical reasons."

Saturday, February 4, 2012

Matching, mate choice, and...speciation

Perspective: Matching, Mate Choice, and Speciation
Author(s): Puebla, O., Bermingham, E., Guichard, F.
Source: INTEGRATIVE AND COMPARATIVE BIOLOGY  Volume: 51   Issue: 3   Pages: 485-491     SEP 2011

Abstract: Matching was developed in the 1960s to match such entities as residents and hospitals, colleges and students, or employers and employees. This approach is based on "preference lists," whereby each participant ranks potential partners according to his/her preferences and tries to match with the highest-ranking partner available. Here, we discuss the implications of matching for the study of mate choice and speciation. Matching differs from classic approaches in several respects, most notably because under this theoretical framework, the formation of mating pairs is context-dependant (i.e., it depends on the configuration of pairings in the entire population), because the stability of mating pairs is considered explicitly, and because mate choice is mutual. The use of matching to study mate choice and speciation is not merely a theoretical curiosity; its application can generate counter-intuitive predictions and lead to conclusions that differ fundamentally from classic theories about sexual selection and speciation. For example, it predicts that when mate choice is mutual and the stability of mating pairs is critical for successful reproduction, sympatric speciation is a robust evolutionary outcome. Yet the application of matching to the study of mate choice and speciation has been largely dominated by theoretical studies. We present the hamlets, a group of brightly colored Caribbean coral reef fishes in the genus Hypoplectrus (Serranidae), as a particularly apt system to test empirically specific predictions generated by the application of matching to mate choice and speciation.

Friday, February 3, 2012

Individual Rationality (now also in Romanian)

I'll be lecturing on models of individual choice today, which reminds me that not too long ago I received the following email from Alexandra Seremina:

"I've made a translation of 'Individual Rationality as a Useful Approximation: 
Comments on Tversky's "Rational Theory and Constructive Choice"
'
page to Romanian. It is available at:
http://www.azoft.com/people/seremina/edu/individual-rationality.html

" Profesorul Tversky prezintă o scurtă descriere a a creterii permanente de  dovezi experimentale, la care el a fost unul dintre cei mai influenţi contribuabili... "

And here are the opening paragraphs (in English):


"Professor Tversky presents a quick overview of an ever growing body of experimental evidence, to which he has been one of the most influential contributors. This evidence demonstrates that human behavior deviates in systematic ways from the idealized behavior attributed to expected utility maximizers in particular, and to "rational economic man" in general. One of the most striking things about this substantial body of evidence is that, starting at least as early as the work of Allais [1953] and May [1954], it has been collected over the same period of years in which expected utility theory has come to be the dominant model of individual behavior in the economics literature. This adds force to the question Tversky raises in his concluding remarks: what accounts for economists' "reluctance to depart from the rational model, despite considerable contradictory evidence"?

"I'll attempt to outline a two-track answer to this question.

"First, I'll argue that there are quite defensible reasons for a reluctance to abandon theories of rationality in favor of psychological theories. In particular, I think most economists view the rational model as a useful approximation, rather than as a precise description of human behavior. Experimental demonstrations that people deviate from the model do not strike at the heart of the belief that the approximation is a useful one, since all approximations are false at some level of detail. In view of this, some kinds of evidence, and alternative models, are likely to be more successful than others in attacking the central role of rationality assumptions in the economic literature.

"Second, I'll note that, in fact, there is a growing attempt by economists to move away from an overdependence on idealized models of hyper-rationality."


Thursday, February 2, 2012

School choice design in New Orleans Recovery School District

When it comes to design, not only do algorithms and procedures have to be designed (in this case with the assistance of  IIPSC), but also advertisements and logos. New Orleans Recovery School District has billboards going up that emphasize that the new centralized school choice procedure lets parents apply to multiple schools with just one application--{one App}--with, for emphasis, one cute kid playing all three roles in the billboard.



RSD hopes to primarily use a top trading cycle system (which is the second of two algorithms described in this short paper about the design of Boston's school choice system), which makes it safe for families to rank schools in the true order of their preferences. (Schools in RSD aren't strategic players; they don't rank students, who have priorities assigned by the district).

Here's my earlier post on New Orleans school choice, including an interview with John White, who was at that time the new RSD Superintendent, but is now the superintendent of schools for the State of Louisiana.

HT: Gabriela Fighetti

Wednesday, February 1, 2012

More interns and younger ones fuel the war for talent in Silicon Valley

Silicon Valley's talent wars are going younger


"Bay Area tech companies, already in a fierce fight for full-time hires, are now also battling to woo summer interns. Technology giants like Google Inc. have been expanding their summer-intern programs, while smaller tech companies are ramping up theirs in response—sometimes even luring candidates away from college.

"Dropbox Inc. plans to hire 30 engineering interns for next summer, up from nine this year, says engineering manager Rian Hunter, who adds the company wants interns to comprise one-third of its engineering team.
...

"More interns means more opportunities to bring people to the company," Mr. Hunter says, noting Dropbox is seeking people as young as college freshman.

"Interns allow you to "try before you buy," says Bump Technologies Inc. Chief Executive Dave Lieb, who plans to hire as many as 10 for next summer. He says the 30-person company pays intern engineers about $10,000 for a roughly 12-week stint, similar to what other tech start-ups say they pay.
...
"Ninety-three percent of early-stage Silicon Valley start-ups have hired or are hiring interns, according to InternMatch Inc., a website that helps college students find internships. The group surveyed companies that recently raised money from two Bay Area incubators, Y Combinator or 500 Startups.
...
""Competition for talent is so fierce," says Kleiner partner Juliet de Baubigny. She says the firm may expand the program, which is currently for juniors in college, to others, including possibly high-school students.

"Meanwhile, Facebook Inc. plans to hire 625 interns for next summer, up from 550 this year. Google hired 1,000 engineering interns this past summer, up 20% from the previous year. Yolanda Mangolini, Google's director of talent and outreach programs, says the company is still figuring out its target for 2012, based on its overall staffing plan.

"Google generally extends offers to the majority of its intern class, Ms. Mangolini says. "It is one of the primary ways we find full-time hires."

Tuesday, January 31, 2012

School choice in Denver: communication, communication, and communication

Shannon Fitzgerald, director of choice and enrollment services for Denver Public Schools, explains what parents need to know about a strategy proof system:

“All you have to put on the form is what you really want for your kid. There is no strategy that you can really employ … All parents needs to do is tell us is what they really want.”

Congestion is deadly in South Africa university admissions

We're accustomed to seeing market failures due to congestion, but seldom so clearly as in the last round of admissions at the University of Johannesburg, where the BBC reports

"One person has died after a stampede broke out among crowds of people trying to enrol at a university in the South African city of Johannesburg."
...
"Tuesday's incident occurred as students queued for last-minute places at the university, registrar Marie Muller told eNews channel.
...
"We rushed the gates and people fell. We couldn't stop," said Mr Matiba, who was trying to enrol for a BSc degree in Zoology.
Mr Matiba said prospective students were desperate and felt left without any alternative other than storming the entrance.
"We need education. We need to register. We needed to get inside," he said.
An eyewitness who spoke to BBC News said the numbers queuing were especially high because the queue combined new applicants and students returning for further study.
The eyewitness - who did not want to be named - said people had travelled to the university from around the country, many making overnight journeys.
She said there had been a similar crush on Monday, and that when it started to happen again on Tuesday "we just ran away because we knew we we were going to get hurt".
The University of Johannesburg, which describes itself as "one of the largest, multi-campus, residential universities in South Africa", was created when several institutions merged in 2005.
It is reported to be one of few which accept last-minute applications in January, after high-school final exams are released and some students realise they are eligible for university.
It used an SMS campaign to alert students to the possibility of last-minute places and on Monday, the normally quiet streets around the university's Bunting Road campus entrance were packed with traffic and a kilometre-long line of applicants had formed at the main gate."

HT: Sven Seuken

Monday, January 30, 2012

Parking

I always knew that parking is a sexy topic*, but it takes a first rate journalist like Leon Neyfakh at the Boston Globe to explain clearly the kinds of things that excite economists: The case for the $6 parking meter

"For many people, what’s disconcerting about demand-based parking is the same thing that excites economists: It introduces market forces to an aspect of public life that historically has been largely protected from them. Like highway tolls that go up during rush hour, or the “congestion fees” some crowded cities have imposed, the Shoup model of street parking is part of a broader conversation about the trade-off between efficiency and equal access — and about what aspects of our lives should be treated as commodities as opposed to inalienable civic resources."


The late Clark Kerr on the subject: "The three purposes of the University?--To provide sex for the students, sports for the alumni, and parking for the faculty."

Sunday, January 29, 2012

Repugnance creates arbitrage opportunities

I was recently party to an email conversation with Judd Kessler and Luke Coffman, about the   NY Times articles about working conditions at Chinese plants that manufacture Apple (and other) products: In China, Human Costs Are Built Into an iPad.

Judd pointed to the line
“If Apple was warned, and didn’t act, that’s reprehensible,” said Nicholas Ashford, a former chairman of the National Advisory Committee on Occupational Safety and Health, a group that advises the United States Labor Department. “But what’s morally repugnant in one country is accepted business practices in another, and companies take advantage of that.”

To which Luke responded
"...differences in repugnance create arbitrage opportunities. This is very obvious in things like organ sales (people fly to Asia to get a kidney), but I hadn't thought about it in business before... It's a compelling thought."

Saturday, January 28, 2012

We pay for dialysis but not for transplants...

The NY Times headlines one more inconsistency in health policy: For Illegal Immigrant, Line Is Drawn at Transplant

"He was also an illegal immigrant. So when his younger brother volunteered to donate a kidney to restore him to normal life, they encountered a health care paradox: the government would pay for a lifetime of dialysis, costing $75,000 a year, but not for the $100,000 transplant that would make it unnecessary."

Friday, January 27, 2012

German university admissions

I'll be teaching the first class of the semester of Experimental Economics today, so readers of this blog may see more of the intersection between market design and experiments, like the following paper on the university admission system in Germany, and how it might be redesigned...





Sebastian Braun



Nadja Dwenger



Dorothea Kübler



Alexander Westkamp

 

Abstract:     
Quotas for special groups of students often apply in school or university admission procedures. This paper studies the performance of two mechanisms to implement such quotas in a lab experiment. The first mechanism is a simplified version of the mechanism currently employed by the German central clearinghouse for university admissions, which first allocates seats in the quota for top-grade students before allocating all other seats among remaining applicants. The second is a modified version of the student-proposing deferred acceptance (SDA) algorithm, which simultaneously allocates seats in all quotas. Our main result is that the current procedure, designed to give top-grade students an advantage, actually harms them, as students often fail to grasp the strategic issues involved. The modified SDA algorithm significantly improves the matching for top-grade students and could thus be a valuable tool for redesigning university admissions in Germany.

Thursday, January 26, 2012

Experiments and market design in Switzerland in April

Institutions and Behavior
April 19-21, 2012 in Kreuzlingen (CH)
Organized by the Thurgau Institute of Economics at the University of Konstanz
Organizers: Urs Fischbacher, Lisa Bruttel, Gerald Eisenkopf, Ulrich Wacker
Institutions are designed in order to create incentives for people to behave in a way desired by the designer of the institution. For example, legally enforced contracts allow interacting parties to rely on each other when trust alone is not a sufficiently solid foundation. However, we frequently observe that institutions do not induce the desired behavior. People question the fairness or legitimacy of an institution, or they exploit deficits in the design of institutions in an opportunistic way. Not knowing how people respond to institutional incentives creates also a difficult problem for the designer of institutions. This conference invites contributions investigating how institutions shape behavior and vice versa how institutions are actually designed. We welcome experimental, theoretical and empirical research from economics and other related disciplines.
Keynote speakers at the workshop:
Rebecca B. Morton Rebecca B. Morton is professor of politics at the New York University. She is a leading researcher in experimental political sciences, in particular voting behavior and electoral processes. She has published in the best journals in both economics and political sciences. Her most recent publications focus, inter alia, on the decision making of swing voters and the behavior in standing expert committees. (http://politics.as.nyu.edu/object/RebeccaBMorton)
Frans van Winden Frans van Winden is professor of economics at the Amsterdam School of Economics and at the Cognitive Science Center Amsterdam. Excellent publications document his main research interests in the fields of political economy, behavioral economics, neuroeconomics and experimental economics. In his recent projects he investigates, for example, the behavioral economics of crime and of social ties or compares tax regimes experimentally. (http://www.creedexperiment.nl/creed/people/winden)
If you would like to present your research at this meeting please submit a paper or an extended abstract here.
Here you can additionally register for the conference. The registration fee for the conference is 150 CHF including meals, coffee breaks, the conference dinner on Thursday evening and a social event on Friday evening.
February 1, 2012 Submission deadline
March 1, 2012 Notification of acceptance
March 15, 2012 Registration deadline for presenters
April 2, 2012 Registration deadline for non-presenting participants
 
theem is kindly supported by

Wednesday, January 25, 2012

Is economic repugnance closely related to biological disgust?

Colleagues often send me articles related to this blog, but the one I have received the most copies of recently is yesterday's NY Times article: Survival’s Ick Factor, about recent studies related to the emotion of disgust, and its possible evolutionary significance in e.g. keeping people away from sources of infection such as feces.

Many people have sent me the article because of my own interest in ickonomics, aka repugnant markets and transactions. A repugnant transaction is one that some people want to engage in, and others think they shouldn't be allowed to. I'm willing to exclude the case of ordinary, pecuniary negative externalities. The issue that initially made all of this very salient to me is the ban, almost everywhere, on buying and selling kidneys (which generated my interest in kidney exchange). But I quickly realized that there are lots of repugnant transactions, and I began a 2007 article on the subject by asking why you can't eat horse meat in California. (It's against the law, passed by popular referendum in 1998.)

Which brings me to the point of this post.

I don’t think the kind of repugnance I study is fundamentally related to biological/evolutionary disgust. The reason there are laws against eating horsemeat, for example, is that it isn’t innately disgusting, so some people want to do it, and others don’t want them to. But there aren’t any laws against eating feces…(sorry, yuck).

Now, I bet that your brain is economical, and that you might recruit some of the same neurons you use to feel disgust to remind you of things you don't like. So I'm not surprised that there are correlates between propensity to feel disgust and some political opinions, for example.

But, to come back to kidney sales, I can't see that the repugnance to selling transplant kidneys for money can be closely related to the disgust that may be inspired by transplantation itself (and the associated blood and guts), since transplantation itself is almost universally regarded as a good thing. That is, the part of the transaction that involves bodily fluids, and might inspire the kind of disgust that would keep you from contamination in other people's innards, isn't regarded as repugnant. Nor is kidney donation, which involves the surgical removal of a kidney. It's only the introduction of money into the transplant transaction that makes it repugnant. (And as we've recently seen with bone marrow, this repugnance to introducing money is alive and well, and crosses party lines.)

And I'm pretty sure there's no evolutionary disgust aroused by money (if only because money was invented pretty late in the evolutionary game...).