A recent article about the policies adopted by American stores regarding returns, particularly of gifts, has gotten me thinking about the different equilbria which (I am under the impression) exist in Europe and the U.S.
Most U.S. stores have a no questions asked return policy. Subject to some limitations, you can return an item, for any reason, i.e. it doesn't have to be broken. The limitations may include things like time elapsed since purchase, whether the item has been used, etc. But policies are more lenient on items received as Christmas gifts (and here's the story that made me think of all this: Navigating Retail Holiday Return Policies. In many cases you can get your money back, in some cases you might just get credit for another purchase.
My impression is that in Europe you can return items for repair, but not for exchange.
Why are the policies different? It seems to me that they may both be in equilibrium, so that it is hard to switch from one to another.
If an American store were to adopt a no return policy, that might seem to signal something about the unobserved quality of their goods, and it would shift sales to competitors who maintained easy return policies. And easy returns promote sales, since there is less risk in buying something, bringing it home, and seeing how it looks.
But if a European store were to adopt an easy return policy, while its competitors did not, then it would invite adverse selection of shoppers who were planning to return things (e.g. returning a gown after wearing it once). These shoppers plague American stores too, but they are spread among all stores and are a cost of doing business. But a European store that was the first to adopt an easy return policy would attract all the bad apples...
Perhaps European readers can tell me if my impressions are correct about the differences in store policies across the water...
Thursday, December 27, 2012
Wednesday, December 26, 2012
Kidney exchange in Canada
Moving to chains in Canada too...
Heartbeat: A chain of faith, a gift of life: Revolutionary organ exchange program can involve a domino chain of up to 10 people across Canada, and it drastically reduces wait times for transplant recipients
"Nemeth was feeling increasingly ill and didn’t have that long to wait.
"Luckily, she didn’t have to. In early 2012, at her doctor’s urging, she joined the Living Donor Paired Exchange program.
"In the registry, donor-recipient pairs whose organs are incompatible with each other can be matched with others in the same situation and the organs swapped to complete transplants. There are Good Samaritans — non-directed anonymous donors — who simply donate a kidney out of altruism also entered in the registry. Algorithms determine matches to optimize use of rare blood and antibody types: swaps that result can involve up to five-pair chains — up to 10 people in cities across Canada all intricately linked in a complex “domino” transplant.
"The registry was founded as a pilot project in three provinces, including B.C., in 2009. It has since gone national and is overseen by Canadian Blood Services, which conducts three (formerly four) searches or “runs” a year.
"To date, there are about 145 registered pairs.
"More than 140 transplants have been performed, with the first cross-country multi-hospital swap in June 2009. Nemeth’s own chain involved three pairs: done at St. Paul’s and in Winnipeg.
"The program not only shortens waits and saves lives, but it also saves money: dialysis costs $60,000 a year while a kidney transplant is around $25,000 plus $6,000 a year for medication.
"Even before the national registry, provincial hospitals like St. Paul’s were doing ad hoc local swaps for just these reasons.
“We were basically doing these on the back of an envelope,” Dr. Landsberg said, adding St. Paul’s did its first regional domino transplant around 2006.
"But the national registry has been a true game-changer. Because of it, he said, “the number of difficult to match patients who were stacked on that wait-list and who I predicted would be on there forever have been able to get transplants.”
"And despite the tenuous nature of the chains, so far, he said, “We’ve never had a donor back out.”
Heartbeat: A chain of faith, a gift of life: Revolutionary organ exchange program can involve a domino chain of up to 10 people across Canada, and it drastically reduces wait times for transplant recipients
"Nemeth was feeling increasingly ill and didn’t have that long to wait.
"Luckily, she didn’t have to. In early 2012, at her doctor’s urging, she joined the Living Donor Paired Exchange program.
"In the registry, donor-recipient pairs whose organs are incompatible with each other can be matched with others in the same situation and the organs swapped to complete transplants. There are Good Samaritans — non-directed anonymous donors — who simply donate a kidney out of altruism also entered in the registry. Algorithms determine matches to optimize use of rare blood and antibody types: swaps that result can involve up to five-pair chains — up to 10 people in cities across Canada all intricately linked in a complex “domino” transplant.
"The registry was founded as a pilot project in three provinces, including B.C., in 2009. It has since gone national and is overseen by Canadian Blood Services, which conducts three (formerly four) searches or “runs” a year.
"To date, there are about 145 registered pairs.
"More than 140 transplants have been performed, with the first cross-country multi-hospital swap in June 2009. Nemeth’s own chain involved three pairs: done at St. Paul’s and in Winnipeg.
"The program not only shortens waits and saves lives, but it also saves money: dialysis costs $60,000 a year while a kidney transplant is around $25,000 plus $6,000 a year for medication.
"Even before the national registry, provincial hospitals like St. Paul’s were doing ad hoc local swaps for just these reasons.
“We were basically doing these on the back of an envelope,” Dr. Landsberg said, adding St. Paul’s did its first regional domino transplant around 2006.
"But the national registry has been a true game-changer. Because of it, he said, “the number of difficult to match patients who were stacked on that wait-list and who I predicted would be on there forever have been able to get transplants.”
"And despite the tenuous nature of the chains, so far, he said, “We’ve never had a donor back out.”
Tuesday, December 25, 2012
The global strategic maple syrup reserve
The global strategic maple syrup reserve has been breached, here's the NY Times story: In $18 Million Theft, Victim Was a Canadian Maple Syrup Cartel
And here is the site of the Federation of Quebec Maple Syrup Producers
I used to bring small bottles of New England maple syrup with me as American themed house gifts when I traveled overseas...but it turns out that Canada is the big producer (I guess the Canadian flag is a clue...)
And here is the site of the Federation of Quebec Maple Syrup Producers
I used to bring small bottles of New England maple syrup with me as American themed house gifts when I traveled overseas...but it turns out that Canada is the big producer (I guess the Canadian flag is a clue...)
Monday, December 24, 2012
Sunday, December 23, 2012
Same sex marriage in France: protest and counterprotest
Protests erupt in France over same-sex marriage
"More than 100,000 protesters organized by Catholic groups staged separate demonstrations in French cities over the weekend to protest against government plans to legalize same-sex marriage next year.
Topless activists clash with an anti-gay marriage protest in France
"More than 100,000 protesters organized by Catholic groups staged separate demonstrations in French cities over the weekend to protest against government plans to legalize same-sex marriage next year.
"Most of them took to the streets on Saturday, backed by the French Catholic Church and joined by several senior clerics, and several thousand more paraded with ultra-traditionalist Catholics in Paris on Sunday."
************Topless activists clash with an anti-gay marriage protest in France
Saturday, December 22, 2012
Market designers at Yahoo!, Google, eBay and Microsoft
The Economist recently celebrated the contributions of Preston McAfee, Hal Varian, Steve Tadelis and Susan Athey: Micro stars, macro effects: Meet the economists who are making markets work better
Friday, December 21, 2012
Video of Nobel prize awards ceremony
I'm almost recovered from my trip to Stockholm:) Here is the video of the Nobel presentation ceremonies. Economics starts around 1:12. with intro in Swedish by Thorsten Persson, and 1:16 in English
http://www.svtplay.se/video/892980/prisutdelningen-i-konserhuset
And here are the iconic pictures from the Nobel website:
Update: the Nobel Foundation website now has short video clips of both me and Lloyd receiving our prizes:
Alvin Roth receives his prize
Lloyd Shapley receives his prize
http://www.svtplay.se/video/892980/prisutdelningen-i-konserhuset
And here are the iconic pictures from the Nobel website:
Update: the Nobel Foundation website now has short video clips of both me and Lloyd receiving our prizes:
Alvin Roth receives his prize
Lloyd Shapley receives his prize
Thursday, December 20, 2012
Martin Shubik
The celebration of Lloyd Shapley at the recent Nobel week naturally makes people think of his long term collaborator Martin Shubik. There's a nice discussion of his work by the archivists at the Duke University libraries, which houses his papers: The Martin Shubik Papers: From Early Game Theory to the Strategic Analysis of War
"While Shubik was born in New York City in 1926, he received his early education in England. After moving to Canada, he graduated with a B.A. in mathematics and subsequently with an M.A. in political economy from the University of Toronto in 1947. Equipped with this background, Shubik arrived at Princeton University in 1949, where the archival record begins. He received a Ph.D. in economics in 1953 under the supervision of Oskar Morgenstern, one of the founding fathers of game theory. The influence of his supervisor becomes apparent in Shubik’s collection, not only through the class notes Shubik took of Morgenstern’s lectures and in the correspondence with him throughout the years, but also indirectly through Shubik’s life-long contributions to game theory and its application to economic problems. And, like Morgenstern, Shubik frequently voiced a critical attitude towards purely theoretical work.
"Shubik’s collection is a treasure-house of primary resources on economics, especially for researchers interested in the early years of game theory. Shubik was part of an inspiring group of students during his stay at Princeton, including Harold Kuhn, John McCarthy, John Milnor, John Nash (Nobel Prize, 1994), Norman Shapiro, and Lloyd Shapley (Nobel Prize, 2012), who were pioneers in the field of game theory and would continue to shape the history of American mathematical economics during the second half of the 20th century. Innumerable drafts of Shubik’s collaborative works, often accompanied by correspondence and research notes by his co-authors, afford an inspiring set of resources evoking that historical period. The collection contains Shubik’s and Shapley’s drafts and notes on their joint works on game theory, from their early papers in the 1950s to their collaboration during the 1970s at the RAND corporation. The collection also allows for personal glimpses into Shubik’s life. For example, Shubik’s life-long friendship and professional collaboration with Shapley is reflected in the extensive correspondence throughout their academic careers. Similarly, Shubik’s exchanges with Nash (sometimes through humorous cards and joke letters) offer a unique source for historians interested in the early years of game theory and the history of modern economics."
"While Shubik was born in New York City in 1926, he received his early education in England. After moving to Canada, he graduated with a B.A. in mathematics and subsequently with an M.A. in political economy from the University of Toronto in 1947. Equipped with this background, Shubik arrived at Princeton University in 1949, where the archival record begins. He received a Ph.D. in economics in 1953 under the supervision of Oskar Morgenstern, one of the founding fathers of game theory. The influence of his supervisor becomes apparent in Shubik’s collection, not only through the class notes Shubik took of Morgenstern’s lectures and in the correspondence with him throughout the years, but also indirectly through Shubik’s life-long contributions to game theory and its application to economic problems. And, like Morgenstern, Shubik frequently voiced a critical attitude towards purely theoretical work.
"Shubik’s collection is a treasure-house of primary resources on economics, especially for researchers interested in the early years of game theory. Shubik was part of an inspiring group of students during his stay at Princeton, including Harold Kuhn, John McCarthy, John Milnor, John Nash (Nobel Prize, 1994), Norman Shapiro, and Lloyd Shapley (Nobel Prize, 2012), who were pioneers in the field of game theory and would continue to shape the history of American mathematical economics during the second half of the 20th century. Innumerable drafts of Shubik’s collaborative works, often accompanied by correspondence and research notes by his co-authors, afford an inspiring set of resources evoking that historical period. The collection contains Shubik’s and Shapley’s drafts and notes on their joint works on game theory, from their early papers in the 1950s to their collaboration during the 1970s at the RAND corporation. The collection also allows for personal glimpses into Shubik’s life. For example, Shubik’s life-long friendship and professional collaboration with Shapley is reflected in the extensive correspondence throughout their academic careers. Similarly, Shubik’s exchanges with Nash (sometimes through humorous cards and joke letters) offer a unique source for historians interested in the early years of game theory and the history of modern economics."
Wednesday, December 19, 2012
Market design is a team sport
Muriel Niederle has been posting some pictures from Stockholm, and here are some of mine...
First, the final slide from my Nobel lecture:
It turns out that parts of the teams for kidney exchange, school choice and medical matches made it to Stockholm, and those folks look a little different in tails and gowns:
First, the final slide from my Nobel lecture:
It turns out that parts of the teams for kidney exchange, school choice and medical matches made it to Stockholm, and those folks look a little different in tails and gowns:
 |
| School choice: Parag Pathak, Al Roth, Atila Abdulkadiroglu, Neil Dorosin |
 |
| Medical matches: Elliott Peranson, Al Roth, Muriel Niederle |
 |
| Kidney Exchange: Frank Delmonico, Al Roth, Mike Rees, Itai Ashlagi |
Tuesday, December 18, 2012
David Warsh on Lloyd Shapley and his colleagues
After a head feint towards another topic, David Warsh writes about Lloyd Shapley and his colleagues David Gale, Herb Scarf, and Martin Shubik.
"The book I yearn to read some day is a deep examination about the way that psychology and strategic behavior came to economics in the twentieth century, in the guise of game theory. So far its leading characters pop up as individuals, either the subjects of biographies (John von Neumann in books by Steve Heims and Norman Macrae) or recipients of Nobel Prizes – John Nash eighteen years ago (not long thereafter the subject of Sylvia Nasar’s A Beautiful Mind), and now Lloyd Shapley. If you had gotten up early yesterday morning, you could have seen, streaming live from Stockholm, via the Internet, the 89-year-old Shapley, an old man grasping a sheaf of notes, attempting to deliver a stripped-down talk about one aspect of his work, intermittently puzzled and confident, until a wave of applause relieved him of the need to persevere.
"The book I yearn to read some day is a deep examination about the way that psychology and strategic behavior came to economics in the twentieth century, in the guise of game theory. So far its leading characters pop up as individuals, either the subjects of biographies (John von Neumann in books by Steve Heims and Norman Macrae) or recipients of Nobel Prizes – John Nash eighteen years ago (not long thereafter the subject of Sylvia Nasar’s A Beautiful Mind), and now Lloyd Shapley. If you had gotten up early yesterday morning, you could have seen, streaming live from Stockholm, via the Internet, the 89-year-old Shapley, an old man grasping a sheaf of notes, attempting to deliver a stripped-down talk about one aspect of his work, intermittently puzzled and confident, until a wave of applause relieved him of the need to persevere.
Against long odds, Shapley won the game that senior players sometimes call “Beat the Reaper.” Considering that he and Nash met as young men in the extraordinary hothouse that was the Princeton University Department of Mathematics in the days soon after World War II he is fortunate indeed. In a setting dominated by the polymath von Neumann, he and Nash quickly shouldered aside the founding father and divided up among themselves and their friends the competing programs that game theorists have pursued ever since.
You have to admire the alacrity with which the committee of the Royal Swedish Academy of Sciences acted, pairing Shapley, of the University of California at Los Angeles, with the vigorous, young Alvin Roth, who just left Harvard for Stanford University (a stripling at 60.) They did much the same in 1996, with William Vickrey, 82, of Columbia University; and, in 2007, with Leo Hurwicz, 90 of the University of Minnesota, pairing them in each case with much younger men. In Hurwicz’s case they beat the Reaper by less than a year; Vickrey died a few days after learning of his award, his heart burst from the renewed excitement of the chase. "
...
"The problem with the prizes is that they obscure the networks that have led to them, with countless others left out. Characteristically, the last slide of Roth’s lecture yesterday contained the photographs of fifteen or twenty collaborators who helped turn market design into one of the most exciting fields in economics: surgeons, medical administrators, educators, junior colleagues. Such a slide, had it been prepared to accompany Shapley’s lecture, would have included a very different dozen or two collaborators, beginning with the mathematician’s famous father, the Harvard astronomer Harlow Shapley, who was a story in his own right, having successfully described in 1918 the size of the Milky Way galaxy and determined our sun’s position in it, only then to fight and lose a lifelong battle with Edwin Hubble about what lay beyond the boundaries of our galactic home (nothing, Shapley said). Three other contemporaries whom the younger Shapley met first atPrinceton, back in the day, would stand out.
There would be David Gale, who died in 2008. at 86, Shapley’s mathematician collaborator on the 1962 paper “College Admissions and the Stability of Marriage,” which was the beginning of the skein of work for which this year’s prize was given. Had he lived a little longer, Gale might well have shared in the award. But there seemed nothing unfulfilled about Gale’s life, which was described inthis excellent article by the University of California at Berkeley (where he taught for forty years), as a passionate father, puzzle-monger, avid skier, tennis player, traveler and jazz aficionado. (He kept an office in the Ecole Polytechnique inParis as well.)
Then there is Herbert Scarf, 82, ofYale University, Shapley’s co-author on a key paper in 1974, “On Cores and Indivisibility.” Scarf’s contribution to the study of traditional one-sided markets, which is the way the process of kidney exchange is understood, was discussed at some length in the long citation that accompanied the Nobel award. Unexamined, however, was Scarf’s forty-year quest to achieve a satisfying mathematical description of economies in which increasing returns, meaning falling costs, play a prominent role. Such increasing returns, or economies of scale, exist everywhere in the modern world, at least up to a point. Yet a satisfying framework for examining them so far had eluded mathematical economists, including Scarf. The editor of his collected papers quotes a Chinese poem in this connection: “An old war-horse may be stabled, yet still it longs to gallop a thousand miles; and a noble-hearted man, though advanced in years, never abandons his proud aspirations.”
Finally there is Martin Shubik, 86. Shubik, too, collaborated with Shapley often over the years; their 1971 paper on the “assignment game” was a key step in the clear statement of the line of work for which the prize was given. “He was a superb mathematician, and I had a good economic intuition,” Shubik says of Shapley; “together we made a very good mathematical economist.” But Shubik has work of which he is more proud. His 1959 article, “Edgeworth Market Games,” was the first to relate a truly economic concept (the contract curve) to a game-theoretic concept (the core),according to Eric Gordon, and so formed a bridge which game theorists have been crossing ever since. By the time he and Shapley stated the connection formally ten years later, in “On Strategic Market Games,” Shubik’s future was assured. It was Shubik who apparently campaigned successfully for Shapley for this year’s prize."
Monday, December 17, 2012
Allocating top level domain names
While I was away, Peter Cramton has been busy with an interesting allocation problem: Update on Applicant Auction Conference.
He also includes the following links:
He also includes the following links:
"To better understand what the Applicant Auction is about please take a look at the following two posts on CircleID:
Applicant Auction for Top-Level-Domains: Resolving Contention Fairly, Efficiently, and Transparently
Finally if you want to get into the technical details of bidding incentives and bidding strategy take a look at our research paper on the topic:
Sunday, December 16, 2012
Saturday, December 15, 2012
Friday, December 14, 2012
Muriel Niederle is blogging about experimental and behavioral economics
Here's her first post, posted from Stockholm:
Experimental Economics Coming of Age
Interview by the Nobel foundation
Here's a 25 minute interview, which starts a bit slowly, but in which I get to talk about matching: Video interview with Alvin E. Roth
Around minute 19 I'm asked about free markets and I talk about how free markets have rules that let them operate freely. I suggest the metaphor of a wheel that can rotate freely, because it has well oiled bearings: "wheels don't occur naturally, they're human creations. And so are markets."
Around minute 19 I'm asked about free markets and I talk about how free markets have rules that let them operate freely. I suggest the metaphor of a wheel that can rotate freely, because it has well oiled bearings: "wheels don't occur naturally, they're human creations. And so are markets."
Thursday, December 13, 2012
Nobel lectures in Uppsala
Nobel lectures in Uppsala: many of the science lectures are heard again at Uppsala University on Dec 13.
Wednesday, December 12, 2012
Saint Lucia Day in Stockholm tomorrow.
It is St. Lucia day in Sweden tomorrow. What should I expect?
Here are some clues: Early in the morning,
It has become tradition to surprise the Nobel Prize winners early in the morning when they are still in bed at their hotel, with a singing Lucia procession. One year though, a winner got really angry and upset, so since then they all get to know about it in advance...
Late at night there's a dinner and a ball at Stockholm University, and, apparently, induction into the Order of the Frog
Perhaps there will be dancing at the Ball: Here's a story from an English language Swedish newspaper, interviewing one of the many student volunteers who are taking excellent care of us this week.
"When asked which of the recipients she would like to dance with, she smiles and answers “Alvin E. Roth.”
"He is the winner of the Nobel Prize in Economics.
"“He seems really laidback. Today, at the rehearsal, he showed up in torn jeans and a knitted cardigan. So, of the winners, I would actually like to dance with him the most.”
"If Dalman doesn’t get to dance with him tonight, she will get a second chance on Thursday.
"It may mark the end of her Nobel duties, but once she is done organizing the unofficial end of the Nobel Week, the Lucia Ball, she might end up taking a twirl with her favourite laureate.
"One winner always attends the event, and this year it's a Alvin E. Roth who will attend.
"So, that’s lucky."
Here are some clues: Early in the morning,
It has become tradition to surprise the Nobel Prize winners early in the morning when they are still in bed at their hotel, with a singing Lucia procession. One year though, a winner got really angry and upset, so since then they all get to know about it in advance...
Late at night there's a dinner and a ball at Stockholm University, and, apparently, induction into the Order of the Frog
Perhaps there will be dancing at the Ball: Here's a story from an English language Swedish newspaper, interviewing one of the many student volunteers who are taking excellent care of us this week.
"When asked which of the recipients she would like to dance with, she smiles and answers “Alvin E. Roth.”
"He is the winner of the Nobel Prize in Economics.
"“He seems really laidback. Today, at the rehearsal, he showed up in torn jeans and a knitted cardigan. So, of the winners, I would actually like to dance with him the most.”
"If Dalman doesn’t get to dance with him tonight, she will get a second chance on Thursday.
"It may mark the end of her Nobel duties, but once she is done organizing the unofficial end of the Nobel Week, the Lucia Ball, she might end up taking a twirl with her favourite laureate.
"One winner always attends the event, and this year it's a Alvin E. Roth who will attend.
"So, that’s lucky."
Tuesday, December 11, 2012
Nobel Economics Prize Lectures by Lloyd Shapley and Al Roth
The Nobel lectures for the Economics Prize were given on Saturday December 8, and are now available online. Lloyd lectured first, and I followed. We were both introduced by Tomas Sjostrom.
Lloyd Shapley's lecture: Play
My lecture (Al Roth) Play
Here's my banquet speech (although I deviated a little from the prepared text). and here are
Alvin E. Roth's Diploma
Lloyd S. Shapley's Diploma
Lloyd Shapley's lecture: Play
My lecture (Al Roth) Play
Here's my banquet speech (although I deviated a little from the prepared text). and here are
Alvin E. Roth's Diploma
Lloyd S. Shapley's Diploma
Monday, December 10, 2012
Where do Nobel laureates come from, and other statistics...
Some nonpartisan stats, and some more partisan ones...
http://visualizing.org/visualizations/how-much-did-you-know-about-nobel-prizes-and-nobel-laureates
http://www.thejournal.ie/chocolate-nobel-prizes-infographic-632579-Oct2012/
holykaw.alltop.com/nobel-prizes-by-country-infographic
New York Jews won’t stop winning Nobel Prizes
"On Monday in Stockholm, the Royal Academy of Sciences will present the Nobel Prize in chemistry to Bronx-reared Dr. Robert Lefkowitz, and the Nobel in economics to Queens-raised Alvin Roth. Lefkowitz, a graduate of the prestigious Bronx High School of Science, and Roth, soon to depart the faculty of Harvard for Stanford, are the 39th and 40th graduates of New York City public high schools to win a Nobel Prize."
http://visualizing.org/visualizations/how-much-did-you-know-about-nobel-prizes-and-nobel-laureates
http://www.thejournal.ie/chocolate-nobel-prizes-infographic-632579-Oct2012/
holykaw.alltop.com/nobel-prizes-by-country-infographic
New York Jews won’t stop winning Nobel Prizes
"On Monday in Stockholm, the Royal Academy of Sciences will present the Nobel Prize in chemistry to Bronx-reared Dr. Robert Lefkowitz, and the Nobel in economics to Queens-raised Alvin Roth. Lefkowitz, a graduate of the prestigious Bronx High School of Science, and Roth, soon to depart the faculty of Harvard for Stanford, are the 39th and 40th graduates of New York City public high schools to win a Nobel Prize."
Sunday, December 9, 2012
The Nobel Prize award ceremony: tomorrow, Monday
The Nobel Prize Award Ceremony 2012
The Nobel Prize Award Ceremony takes place at the Stockholm Concert Hall, Sweden, on 10 December every year – the anniversary of Alfred Nobel's death. At the ceremony, the Nobel Prize in Physics, Chemistry, Physiology or Medicine, Literature and the Prize in Economic Sciences are awarded to the Nobel Laureates.
Live Webcast from Stockholm!
atch the Nobel Prize Award Ceremony at the Stockholm Concert Hall, Sweden, 10 December 2012, 4:20 p.m. (CET) – 6:00 p.m. (CET).
That's 10:20am for you East Coast Americans, and 7:20am for you Californians...probably here: http://www.nobelprize.org/
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