Tuesday, April 29, 2014

The market for affairs

Here's the latest on the growing 'infidelity economy', facilitated by the website Ashley Madison, about which I've blogged before.

Adultery is good for your marriage – if you don’t get caught, says infidelity website boss As global membership to the world’s biggest infidelity site soars to over 24 million, its founder explains the international appeal of adultery

"Famed for its catchy motto – “Life is short. Have an affair” – the dating service is free for women but paying for men.
...
"The website is currently in the throes of a rapid global expansion: since launching in Canada on Valentine’s Day in 2002, it has attracted more than 24 million members in 37 countries, with South Korea launched last week."

Monday, April 28, 2014

Repugnant transaction watch: New Hampshire Senate votes to repeal anti-adultery law

Here's the story, which comes with this map of states with anti-adultery laws:

"Adultery isn't just a crime in the eyes of your spouse. In 21 states, cheating in a marriage is against the law, punishable by a fine or even jail time.

The New Hampshire state Senate voted Thursday to repeal its anti-adultery law, sending the bill to Gov. Maggie Hassan, who says she's likely to sign it into law. Under the law the Legislature voted to repeal, adultery is a Class B misdemeanor and punishable by a fine of up to $1,200.

"I don't think there's any appetite in New Hampshire to use police powers to enforce a marriage," state Rep. Tim O'Flaherty, the bill's sponsor, said during a public hearing last month.

Last year, Colorado repealed its anti-adultery law.

States' anti-adultery laws are rarely enforced, a vestige of our country's Puritanical beginnings, says Naomi Cahn, a law professor at the George Washington University Law School."

Sunday, April 27, 2014

Law clerk hiring

Over at Concurring Opinions a little while ago was this :The Law Clerk Hiring Process – An Interview with Federal Judge Thomas Ambro

Question: How far in advance do you select your clerks?  Some federal judges are now hiring two years in advance?  What is your current practice?
Answer:  Right now (March 2014) I have all positions filled for the 2014-’15 and the 2015-’16 terms.  I also have two clerks committed for the 2016-’17 term. My typical lead time for a clerk is two years. That may mean that a clerk will be at least a year removed from law school when she or he begins working in my chambers. That time is usually spent in another clerkship (almost always a District Court clerkship, though on two occasions it has been another Circuit Court clerkship), with a law firm, or sometimes both another clerkship and work in a law firm.
....
"In addition to letters of recommendation, I welcome calls from recommenders. That tells me that the recommender is willing to put her or his reputation on the line for the applicant, something I value highly. It is also a great shortcut to my becoming aware of good applicants.
Question: Apart from typos or grammatical errors, what is the most common mistake that applicants make?
Answer: In addition to believing that a high-profile recommender is preferable to one who knows you better, the most common mistake I observe is when an applicant feigns interest in a particular judge. When the hiring plan was in place, you could discover that very quickly. If calls or emails by judges to an applicant were not to be made before a set time on a particular day and I got my calls or emails sent out timely, I could tell who was interested by how quickly they responded. If an applicant got back to me within half an hour, she or he was interested.  If that person got back to me hours later, I was “low on their totem pole.” Now that the hiring protocols are discontinued, it becomes harder to know who is interested. That is yet another reason why I try to get as much information as I can from persons who recommend applicants.
...
Question: I see that as of February 13, 2014, the Administrative Office of the Courts has discontinued the Federal Law Clerk Hiring Plan. How do you feel about that?
Answer: I wish that there would be a plan in place. The hiring plan that was in place had many flaws, including making hiring season a frenetic chase for information and significant gaming of the system. That said, there was at least some organization.  I wish judges would be willing to consider something akin to the match system that exists for those in the medical profession. There would be a period for interviewing applicants (preferably after the 2L grades are out), both the judges and the applicants would prioritize their preferences and submit them to a central place, and those preferences would be dealt with by an algorithm in a computer program. No doubt that system could be “gamed” as well—for example, by having a recommender or other school official gauge a judge’s interest in an applicant, and vice versa, before the preference picks are submitted. That is not bad, however, as it is a good way to determine which applicants are truly interested in clerking for me.

Saturday, April 26, 2014

NAS Research Briefings, 2014

 I'm in Washington DC today and will give a short talk at the National Academy of Sciences, along with several other new members.

Saturday April 26 - Research Briefings
A Sampling of the Work of Members Elected in 2013: Gregory P. Asner, Terry A. Plank, Alvin E. Roth, Robert D. Schreiber, Kristi S. Anseth and Stephen R. Quake.

Later in the day will be the induction ceremony, which I gather will be webcast live at www.nasonline.org beginning at 8:00 pm (Eastern Daylight Time--5pm Pacific for you Californians...).

Sadly, Dale Mortensen, the other economist elected to the NAS in 2013, passed away on January 9, 2014.

Friday, April 25, 2014

Iranian blog with ads for selling kidneys

Here's a website (in Persian) in which prospective kidney sellers advertise.

Google translate worked well enough to give me an idea of what the ads say; here are some of them translated by Afshin Nikzad...

The first line of each ad is bold, and has the following format:

Name (gender), Age, Blood type, Price.

Manizhe (female), 22, AB, $14.5K
single, athlete, bachelors in psychology.
Due to financial needs, I'm selling my kidney.

Massoume (female), 45, A+, negotiable price
Hello. I am a 45 year old woman, bachelors in business administration,
fluent in English, can work with computers, experience of work in a
real estate agency. I migrated from Tehran to a village in Mazandaran
6 month ago. I can't find any job fitting my work experience, and have
spent all my savings in the past 6 month. I am willing to sell an organ
(to save my dignity).
contact: 09376606455, http://zh32329292.blogfa.com

Sarah (female), 30, A+, negotiable price
urgent, urgent, urgent, urgent, urgent, urgent
I need to sell my kidney because I am in a lot of debts, and I am
broke [bankrupt].
Contact: 09385786869

unknown, 23, B+
I am in serious need of money, I am getting homeless; soon please.
please text your offered price. I really need money. Can travel to any
where, the buyer is responsible for all the expenses.
Contact: 09306890335

vahid (male), 28, A+, $20K
from Tehran. completely healthy. doesn't smoke or drink.
want to sell my kidney for financial problems.

Shahin (male), 24
Hello. I am in charge of the family since my father is ill. It has been
very difficult to go at work and study at the same time, I have quit
university since a few months ago. I'm really tired of this situation.
Please offer a fair price, cause I am in need; I am doing this cause I
see no other way.

? (female), 22, A+, negotiable price
Hello, I am a 22 year old woman, and I need to sell my kidney for my
college expenses. athlete. Can travel to any where in Iran. Price is
negotiable.
Contact: 09308665458.

Maryam (female), 25, AB+, $26K
healthy. need the money to pay debts.
The buyer is responsible for all other expenses.
contact: 09189978478

Amin (male), unknown, unknown, $8K
Hello. express sale. My child had eye-surgery and is in hospital right
now. I need to pay the expenses before the surgery. The price is $8K.
Sorry that I am writing like the dealers.
With best wishes for kidney patients.

Ali (male), 22, A+, negotiable price
For serious financial problems, and for my father's surgery, I need to
sell my kidney.
Contact: 09359818234

Amir (male), 41, A+
in urgent need to sell my kidney. I have two families and 8 children, I
am in debt because of my housing rents.
Contact: 09335751908

Milad (male), 19, O+, $40K
I have been under a lot of pressure in life, and it made me do such a
thing [selling his kidney] in this age. I hope no one would ever
experience a similar situation.
Very healthy. If you are determined to buy, the price is negotiable.
contact: 09337339240, http://miladmadise@yahoo.com

mojtaba (male), 31, O+, $8K.
very healthy.
Blood type: o+
Price: $8K"

Thursday, April 24, 2014

X-STEM symposium: Promoting STEM fields to K-12 Students, April 24

Getting more American kids interested in Science, Technology, Engineering and Mathematics (STEM) fields seems like a worthwhile endeavor.

X-STEM Extreme STEM Symposium - Top Scientists and Inspiring Engineers Speak to K-12 Students - Thursday, April 24, 2014 / Walter E. Washington Convention Center, Washington DC -
Here's an article that initially brought it to my attention, since it used market design as an example:
What This Life-Saving Innovation in Mathematics and Economics Can Teach Students About STEM

It's connected to the US Science and Engineering Festival held this weekend in the same venue.

Wednesday, April 23, 2014

"What have we learned from market design?" now freely available from the EJ

My 2008 paper What have we learned from market design? is now out from behind the subscription wall and freely available from the EJ. (It may have been available for some time, but I just noticed it...)  Here's the pdf version.

Abstract

This article discusses some things we have learned about markets, in the process of designing marketplaces to fix market failures. To work well, marketplaces have to provide thickness, i.e. they need to attract a large enough proportion of the potential participants in the market; they have to overcome the congestion that thickness can bring, by making it possible to consider enough alternative transactions to arrive at good ones; and they need to make it safe and sufficiently simple to participate in the market, as opposed to transacting outside of the market, or having to engage in costly and risky strategic behaviour. I will draw on recent examples of market design ranging from labour markets for doctors and new economists, to kidney exchange, and school choice in New York City and Boston.
The Economic Journal Volume 118, Issue 527, pages 285–310, March 2008

Tuesday, April 22, 2014

More on circumcision

Circumcision is a medical procedure that is also a traditional religious ritual for Jews and Muslims. There are also those who regard it as a repugnant transaction that should be banned, either because of questions about whether it serves a medical purpose, concern about elective procedures on children (an issue of consent, or in some readings, abuse), and antipathy to Jews and Muslims. (In California, a potential coalition to ban circumcision came apart when some of the organizers revealed strong anti-semitic inclinations, and in fact a 2011 law put a stop to the movement: New California law prohibits circumcision bans)
************
In Israel the anti-semitic component of proposed European bans is regarded as a political issue.

Knesset produces film defending circumcision
http://www.ynetnews.com/articles/0,7340,L-4485174,00.html 

"After Council of Europe uses Jewish director's documentary to specify risks of religious ritual, Israeli parliament creates film featuring Jewish and Arab hospital directors voicing their support for medical advantages of circumcision"
**************

Recently some new medical evidence suggests that circumcision should be regarded as akin to child vaccination: Circumcision Benefits Outweigh Risks, Study Reports

"The authors conclude that the benefits — among them reduced risks of urinary tract infection, prostate cancer, sexually transmitted diseases and, in female partners, cervical cancer — outweigh the risks of local infection or bleeding. Several studies, including two randomized clinical trials, found no long-term adverse effects of circumcision on sexual performance or pleasure.
...
“Male circumcision is in principle equivalent to childhood vaccination,” said the lead author, Brian J. Morris, emeritus professor of medical sciences at the University of Sydney. “Just as there are opponents of vaccination, there are opponents of circumcision. But their arguments are emotional and unscientific, and should be disregarded.” ******

Prior posts on efforts to ban circumcision here.

Monday, April 21, 2014

The FCC's upcoming incentive auction, and I propose a new adjective (Milgromesque)

I've blogged before (here) about the FCC's incentive auction being designed by Paul Milgrom and the team he's assembled at Auctionomics. Now it's on the FCC blog, in a post that makes me think we may need to introduce a new adjective into market design. But first, here's the FCC post:

 Getting the Incentive Auction Right, by: Tom Wheeler, FCC Chairman

"Few FCC policies have generated more attention than the Incentive Auction. “Groundbreaking,” “revolutionary,” and “first-in-the-world” are just a few common descriptions of this innovative approach to making efficient, market-driven use of our spectrum resources.

Such attention is warranted. The Incentive Auction is a once-in-a-lifetime opportunity to expand the benefits of mobile wireless coverage and competition to consumers across the Nation – particularly consumers in rural areas – offering more choices of wireless providers, lower prices, and higher quality mobile services.

Spectrum is a finite public resource, and refers to the public airwaves that carry all forms of wireless communication Americans use every day. Twenty-first century consumers in both rural and urban areas of our country have a seemingly insatiable appetite for wireless services, and thus, for spectrum.

Getting the Incentive Auction right will revolutionize how spectrum is allocated. By marrying the economics of demand (think wireless providers) with the economics of current spectrum holders (think television broadcasters), the Incentive Auction will allow market forces to determine the highest and best use of spectrum.

More immediately, the Incentive Auction will deliver tremendous benefits for U.S. consumers across the country.

In developing such an auction, we must also be guided by the rules of physics. Not all spectrum frequencies are created equal. Spectrum below 1 GHz – such as the Incentive Auction spectrum – has physical properties that increase the reach of mobile networks over long distances. The effect of such properties is that fewer base stations and other infrastructure are required to build out a mobile network. This makes low-band particularly important in rural areas. A legacy of earlier spectrum assignments, however, is that two national carriers control the vast majority of low-band spectrum. As a result, rural consumers are denied the competition and choice that would be available if more wireless competitors also had access to low-band spectrum.

Low-band physics also makes this slice of spectrum essential in urban areas, since it permeates into buildings better than does high-band spectrum. With more and more Americans opting for wireless-only connectivity, they should not run the risk of being unable to place a 911 call from the interior of a building just because their wireless company has the wrong spectrum.

While many factors go into determining the quality of wireless service, access to a sufficient amount of low-band spectrum is a threshold requirement for extending and improving service in both rural and urban areas.

As part of the Incentive Auction process, we will also make available on a nationwide basis spectrum for unlicensed use (think Wi-Fi). With the increased use of Wi-Fi, this spectrum has also become congested. Opening up more spectrum for unlicensed use provides economic value to businesses and consumers alike.

Whether television broadcasters participate in the Incentive Auction will be purely voluntary, but participation in the Incentive Auction does not mean they have to leave the TV business. New channel-sharing technologies offer broadcasters a once-in-a-lifetime opportunity for an infusion of cash to expand their business model and explore new innovations, while continuing to provide their traditional services to consumers. We will ensure that broadcasters have all of the information they need to make informed business decisions about whether and how to participate.

Yesterday, I provided my fellow Commissioners a draft Report and Order that will determine many significant issues and policy decisions related to the Incentive Auction. The Commission will also make additional decisions to implement details pertaining to the Incentive Auction in the coming months.

Reaching this stage is a major accomplishment, and was only possible thanks to outstanding work of public servants from across the FCC.

A policy that has never been tried before comes with the perception of risk. We all know, however, that risk is the partner of reward. I will continue working with my fellow Commissioners, FCC staff, and all other interested parties to minimize the risk and maximize the reward of the Incentive Auction. I am confident we will get this right, and the rewards will be great for all Americans."
*********

Now for that new adjective, prompted by the first sentence of chairman Wheeler's post:

Mil·grom·esque: adjective. of or related to market design. “Groundbreaking,” “revolutionary,” and “first-in-the-world.”

First Known Use of MILGROMESQE

2014

Rhymes with MILGROMESQE

*****************
Update: Paul Milgrom writes (in an email whose subject line is "Evan Kwerel"):

Hi Al:
Thanks for your friendly review of the incentive auction, but while I am excited about my role as the consulting team leader, you give me far too big a share of the credit. And, I don't even mean the contributions of the amazing professors on my Auctionomics team -- Jon Levin, Ilya Segal and Kevin Leyton-Brown -- without their huge contributions, our part of this project would not be possible. What they have done is very important, but among the many folks in and out of the FCC who have contributed to this enormous project, the biggest economics hero is Evan Kwerel, who not only had the vision and chutzpah to push for a full market solution to the problem of spectrum reallocation, but also the insight to get the property rights settled in a way that enables competition among broadcasters who offer to relinquish their their broadcast licenses for cash.
The property rights are an absolutely essential and widely under-appreciated part of this story! Until 2012, there was disagreement and confusion about what rights the broadcasters had to their licenses: Did they own them? Could the FCC cancel the licenses or allow them to expire? What rights did the licensees have? In that situation, endless legal and political battles could have delayed the urgently needed spectrum reallocation for years or even decades. Instead, Evan Kwerel's vision included a political solution by which broadcasters would get the right to SOME channel in their home band (UHF or VHF), but not to their particular channel. That way, if the FCC eventually clears channels from Y to Z nationwide for wireless broadband, it can do so either by buying those rights or by buying broadcast rights from broadcasters in lower numbered channel from X to Y-1 and and retuning the broadcasters in the higher channels to use the newly available lower channels. There are lots more details to this because the engineering problems are hard ones, but the core fact is that this definition of rights makes an auction possible, and creates the possibility of a Pareto improvement with voluntary transfers of licenses. Nothing in the whole design is more important than this!
Incidentally, the political deal built into the 2012 legislation also provides a retuning fund of up to $1.75 billion to pay broadcasters who must change to another channel, plus protection to ensure that the new channel is as good for reaching viewers as the old one. The whole structure sets the stage for a Pareto improvement. If we can solve the challenges that this auction poses, I'm hopeful that it may eventually live up to the hype it is getting.

Sunday, April 20, 2014

Saturday, April 19, 2014

Tanzverbot: dancing bans in Germany on Good Friday

Sven Seuken points out this story from last year related to the German ban on dancing--Tanzverbot--on Good Friday: Ban on Dancing on Good Friday Draws Protests; Conga Line in Cologne

"FRANKFURT—Every year on Good Friday, Germany becomes a little like the fictional town in the movie "Footloose"—dancing is verboten.

The decades old "Tanzverbot," or dance ban, applies to all clubs, discos and other forms of organized dancing in all German states."

Here is Wikipedia on dancing bans

Friday, April 18, 2014

School Choice: IIPSC gets a new website

The Institute for Innovation in Public School Choice has a new website. (They/we have been too busy designing school choice systems to update it in the last few years. I'm in that situation myself...)

One of its pages is on School Choice Research, which focuses on the ongoing investigations of Atila Abdulkadiroglu and Parag Pathak, with various colleagues, to assess the effects of school choice on student outcomes. The site presently lists the following representative papers:

 “Explaining Charter School Effectiveness.” American Economic Journal: Applied Economics, 5(4): 1-27, 2013.

Thursday, April 17, 2014

Did I ruin the medical labor market?

Students of economics are sometimes surprised that many of the things they know aren't known by everyone.

So a number of people have emailed me the blog post on the Forbes magazine web site that is headlined How A Nobel Economist Ruined The Residency Matching System For Newly Minted M.D.'s, and subtitled Match Magic: How One Economist Hurt Physicians and Patients.

In it, a graduating medical student who apparently just went through the Match a month ago argues that she would have done much better if there hadn't been a match, since then she could have picked a better job, in a nicer city, at a much higher wage. And she would have been spared the expense and inconvenience of interviewing. Because in a free market you are free to choose the job you want. That's the way economists get their jobs, she concludes.
******

A quick search of the web quickly reveals that other docs have a different view of the match and of markets more generally. Here's a post from a blog site called Skeptical Scalpel, which begins this way

"A blog post entitled "How a Nobel Economist Ruined the Residency Matching System for Newly Minted MDs" appeared on the Forbes website. In it, Amy Ho, the medical student author, lists all the things she considers wrong with the National Resident Matching Program (the "Match").

"I would have commented about this on the site itself except that I have a lot to say, and in order to post a comment, I would have had to agree to allow Forbes to post tweets in my name. No, thanks.

"The title of the post is misleading. As the author noted, the Match as been around since 1952. It was established to make the process of finding a residency position fair for all graduating medical students. Alvin Roth, the economist who shared a Nobel Prize based in part on his work with the Match algorithm, simply refined the process in the 1980s and 1990s to make it even more fair. Roth didn't ruin the Match; he made it better.

"Ms. Ho blames the Match for the fact that 25% of those enrolled in 2014 failed to obtain a residency position. But even if the Match did not exist, there would still have been more than 34,000 people seeking some 26,000 positions, and 8000 doctors would not have found jobs..."
************

The NRMP data are here: http://www.nrmp.org/wp-content/uploads/2014/03/2014-NRMP-Main-Residency-Match-Advance-Data-Tables-FINAL.pdf 
94.4% of seniors at U.S. medical schools were matched in the main match. (Table 4).

MobLab is free for academic use.

Moblab, the experimental software for using experiments to teach economics, is now free.  This should make it easier to adopt. 

I'm one of their advisors, and I'm very enthusiastic about bringing experiments into the classroom.

Wednesday, April 16, 2014

Long lasting effects of the window tax at Cambridge University


When I recently spoke at Cambridge, I took this photo at King's College.

Wikipedia has this to say, in general...
The window tax was a property tax based on the number of windows in a house. It was a significant social, cultural, and architectural force in England, France and Scotland during the 18th and 19th centuries. To avoid the tax some houses from the period can be seen to have bricked-up window-spaces (ready to be glazed or reglazed at a later date), as a result of the tax. It was introduced in 1696 and was repealed in 1851, 156 years after first being introduced. Spain and France both had window taxes as well for similar reasons.

*****************
Update: Here's a recent paper on the window tax, brought to my attention by the authors.

The Window Tax (Working Paper) A Case Study in Excess Burden

Author(s): Schwab, Robert M. and Wallace E. Oates
Publication Date: April 2014

Tuesday, April 15, 2014

New currencies that are a natural for laundering

This post isn't about bitcoin, or about prison economies, although it's closer to the second then the first. Neal Becker points me to this article about the use of Tide detergent as a currency in which you can buy drugs...(the article is mostly about how Tide has become a target for professional shoplifters who can fence it without too much difficulty):

Suds for Drugs
Tide detergent: Works on tough stains. Can now also be traded for crack. A case study in American ingenuity, legal and otherwise.

Monday, April 14, 2014

Polygamy in Kenya

Polygamy is an ancient practice in Kenya, but proposed new legislation that codifies that existing wives need not be consulted about new wives is causing some controversy. Here are two headlines that give the picture even before you start reading the stories...

Kenya’s new marriage law legalises polygamy
Kenyan Christian leaders oppose polygamy bill

From the first story:
"Kenya’s male-dominated parliament passed a new controversial marriage law not only legalises polygamy, but allows men to marry without consulting their other spouses. A majority of lawmakers - all men - even agreed to drop a proposal to ban bride price payments (usually in the form of cows). 
According to local news reports, half of Kenya’s 69 female MPs refused to take part in the debate held in the 349-member parliament last week. The women who did attend parliament stormed out in protest. 
Traditionally, first wives are supposed to give prior approval for their husband’s second marriage. According to Samuel Chepkong’a, the MP who proposed the amendment to this custom, however, no consultation is necessary because a woman who gets married under customary law already knows the marriage is open to polygamy. 
“When you marry an African woman, she must know the second one is on the way and a third wife… this is Africa,” Chepkong’a was quoted as saying by Kenya’s Capital News website. "
And from the second story:
"NAIROBI, Kenya (RNS) Christian leaders are appealing to President Uhuru Kenyatta not to sign into law a proposed new marriage bill that legalizes polygamy.
...
"But the National Council of Churches of Kenya, the Kenya Conference of Catholic Bishops and the Evangelical Alliance of Kenya, have rejected it, saying the law will undermine Christian principles of marriage and family.
The Rev. Peter Karanja, general secretary the Kenyan church council, said the bill demeans women and fails to respect the principle of spouses’ equality in marriage."

Sunday, April 13, 2014

Videos of my Marshall Lectures at Cambridge

On February 18-19 I gave two Marshall Lectures at Cambridge:
I. Labor market clearinghouses for doctors in the U.S. and U.K.
II. Kidney exchange  (and repugnant transactions)

Three videos have now been posted at this link (both seminars, and the question and answer period): 


Both lectures are about an hour; the first lecture begins with me being introduced, I start speaking at 3:35. The Q&A is about 20 minutes.

Saturday, April 12, 2014

UNOS produces a video to inform hospitals about kidney paired donation (kidney exchange)

Video module explains features and benefits of the OPTN kidney paired donation pilot program

More than half of the eligible kidney transplant hospitals currently participate in the OPTN KPD Pilot Program, but for those that don’t, a video is now available to provide more information.  The video module (8:45) shows how staff members at a transplant hospital decide to join the program. The video overview was created by UNOS staff in close consultation with KPD Work Group leadership. It describes the mission and goals of the program, outlines the benefits of the program for hospitals, and explains how the program increases patient access to transplants.
Contact the KPD Program Manager with questions at kidneypaireddonation@unos.org.
- See more at: http://transplantpro.org/video-module-explains-features-benefits-optn-kidney-paired-donation-pilot-program/#sthash.DNbvVu8D.dpuf


"The module was created by UNOS Instructional Innovations with the goal to provide living kidney donor transplant hospitals, who are not yet participating in KPD, some information about the program.


http://transplantpro.org/video-module-explains-features-benefits-optn-kidney-paired-donation-pilot-program/ 

Friday, April 11, 2014

I talk to International Society for Heart and Lung Transplantation

Normally when I talk to transplant surgeons I talk about kidney exchange, and sometimes I talk about repugnant transactions as they relate to compensating live donors. But this weekend I'll be speaking to surgeons interested in organs that can't be exchanged, like hearts. So I'll be speaking about deceased organ donation, and what economists are starting to understand about that...

Here's their press release about my talk