Tuesday, November 17, 2015

Herb Scarf, RIP

Rakesh Vohra memorializes Herb Scarf (1930-2015) with a quote from Horace, and passes along the sad news that Scarf passed away two days ago, on November 15.

Scarf was, as Vohra says, a colossus at the intersection of economics and operations research.

In my small corner of the world, a very important paper was Shapley and Scarf (1974), "On Cores and Indivisibility," published in volume 1 number 1 of the Journal of Mathematical Economics. It built on Scarf's work on the core of games without sidepayments, and introduced a way of thinking about barter for indivisible goods, via the top trading cycle algorithm (which Shapley and Scarf attributed to David Gale).

***************
Update: see obituraries,
http://economics.yale.edu/news/memory-herbert-e-scarf-july-25-1930-november-15-2015 

http://www.legacy.com/obituaries/nytimes/obituary.aspx?page=lifestory&pid=176545873

Monday, November 16, 2015

Algorithmic Game Theory and Practice Nov. 16 – Nov. 20, 2015 at the Simons Institute

At Berkeley's Simons Institute for the Theory of Computing
  • Click on the titles of individual talks for abstract, slides and archived video (available approximately one week after the conclusion of the workshop).
  • Talks will also be streamed live on this page during the workshop.
Please note that this schedule is subject to change. All events take place in the Calvin Lab Auditorium.
Monday, November 16th, 2015
9:00 am – 9:20 am
Coffee & Check-In
9:20 am – 9:30 am
Opening Remarks
9:30 am – 10:10 am
10:10 am – 10:40 am
Break
10:40 am – 11:20 am
11:20 am – 12:00 pm
12:00 pm – 1:30 pm
Lunch
1:30 pm – 2:10 pm
2:10 pm – 2:50 pm
2:50 pm – 3:20 pm
Break
3:20 pm – 4:00 pm
4:00 pm – 5:00 pm
Reception
Tuesday, November 17th, 2015
9:00 am – 9:30 am
Coffee & Check-In
9:30 am – 10:10 am
10:10 am – 10:40 am
Break
10:40 am – 11:20 am
11:20 am – 12:00 pm
12:00 pm – 1:30 pm
Lunch
1:30 pm – 2:10 pm
2:10 pm – 2:40 pm
Break
2:40 pm – 4:00 pm
Wednesday, November 18th, 2015
9:00 am – 9:30 am
Coffee & Check-In
9:30 am – 10:10 am
10:10 am – 10:40 am
Break
10:40 am – 11:20 am
11:20 am – 12:00 pm
12:00 pm – 1:30 pm
Lunch
1:30 pm – 2:10 pm
2:10 pm – 2:50 pm
2:50 pm – 3:20 pm
Break
3:20 pm – 4:00 pm
Thursday, November 19th, 2015
9:00 am – 9:30 am
Coffee & Check-In
9:30 am – 10:10 am
10:10 am – 10:40 am
Break
10:40 am – 11:20 am
11:20 am – 12:00 pm
12:00 pm – 1:30 pm
Lunch
1:30 pm – 2:10 pm
2:10 pm – 2:50 pm
2:50 pm – 3:20 pm
Break
3:20 pm – 4:00 pm
Friday, November 20th, 2015
9:00 am – 9:30 am
Coffee & Check-In
9:30 am – 10:10 am
10:10 am – 10:40 am
Break
10:40 am – 11:20 am
11:20 am – 12:00 pm

Sunday, November 15, 2015

The legal marijuana market in Colorado

Colorado Amendment 64, legalizing recreational marijuana use, was passed in 2012 and went into full effect in January 2014. Legal sales are becoming big business, presumably not just at the expense of previously illegal sales in former black markets.
From http://www.thecannabist.co/2015/02/12/colorado-marijuana-sales-2014-700-million/27565/ 


This brings in tax revenues too: Colorado pot taxes: Over the first six months of 2015, the state has pulled in a total of $60.7 million in marijuana taxes, fees


Here are the regulations regarding retail marijuana use in the city of Denver.

I haven't read reports of increases in traffic accidents or crime, although the New Republic has a story saying that all the additional marijuana is driving up real estate prices, as tourists and growers compete for residential and commercial real estate: The Housing Crisis Amid Denver’s Cannabis Boom

Saturday, November 14, 2015

Refugee resettlement, on Bloomberg Surveillance

Early yesterday morning, I was interviewd for 5 minutes about refugee resettlement on
Bloomberg Surveillance: Yergin, Alloway and Roth
Nov 13, 2015
Bloomberg Surveillance with Tom Keene and Michael McKee. GUESTS: Dan Yergin Vice Chairman IHS Inc joins Surveillance to discuss oil and commodities Tracy Alloway Executive Editor:Media Markets Bloomberg Editorial on What’s Moving Markets Alvin Roth Professor:Economics Stanford University Roth on matching markets and refugee resettlement.
Download

or here: http://media.bloomberg.com/bb/avfile/News/Surveillance/vwGKliX5qMZY.mp3

My five minutes are from minute 34:15 to 39:30.

All this happened hours before the terrorist attacks in Paris, which I fear will have a very chilling effect on refugee resettlment in Europe.

Friday, November 13, 2015

Canice Prendergast on The Allocation of Food to Food Banks

Market design has arrived at Chicago, here's a nice paper presented at the recent NBER market design conference.:

The Allocation of Food to Food Banks 
Canice Prendergast∗ Preliminary Draft August 13, 2015

Abstract Food banks throughout the U.S. provide nutrition to the needy. Yet the food that is distributed through food banks often originates with donors - large manufacturers or distributors - far from those needy clients. How that food is distributed to food banks across the country is the subject of this essay. An informal description is given of an innovation introduced in 2005 by Feeding America (at the time the organization was called America’s Second Harvest) that would better allow food bank preferences to be reflected in their allocations. Specifically, Feeding America transitioned from the centralized allocation process, where they would make decisions based on their perception of food bank need, to one where local affiliates would bid for food items. To do so, Feeding America constructed a specialized constructed currency called “shares” that are used to bid on loads of donated food. The process by which this change came about, its necessary idiosyncrasies, and its outcomes are described.
***********
Scott Kominers pointed me to an earlier news article on the paper
What happens when America's Soviet-style food banks embrace free-market economics?

"Initially, there was plenty of resistance. As one food bank director told Canice Prendergast, an economist advising Feeding America, "I am a socialist. That's why I run a food bank. I don't believe in markets. I'm not saying I won't listen, but I am against this." But the Chicago economists managed to design a market that worked even for participants who did not believe in it."

Thursday, November 12, 2015

Interview about market design by the National Association of Real Estate Investment Trusts

An interview about market design by the National Association of Real Estate Investment Trusts inevitably turned to the real estate market...

Nobel Prize Winner Alvin Roth Plays the Match Game  By Allen Kenney

Here's the final question and answer:

REIT: What about on a more discrete level? If you’re an executive in the real estate industry, for example, how might you know if you could get better results by changing how you engage in your own micro-markets for deals?
Roth: I’m a sometimes observer and participant in the residential real estate market. The large role still played by realtors is surprising to me as prices and searchability have gone up.
There was a time when the multiple listing service was a monopoly that made it hard to know what houses were on the market if you didn’t engage a realtor. Nowadays, it’s much easier to know what houses are on the market. You can even take virtual tours.
Still, realtors’ commissions have remained steadily at high rates around the country, even as prices have gone up. Of course, there’s more competition among realtors, so it’s not necessarily the case that realtors are all getting rich. But I’m surprised by the high commissions that are still extracted in cases when it’s not clear to me that the realtors are providing a big service.
If commercial real estate is similar, there might be ways to arrange more bilateral transactions. There might be ways to sell without so much assistance from realtors.

Wednesday, November 11, 2015

The singularity is not as near as you thought...

Artificial intelligence may not be poised to take over the world just yet, or at least there will be a distribution of intelligence even among the artificial kind.

I received an email from a biomedical literature service that would like me to sign up to keep track of articles related to one of mine, specifically

Roth AE: The art of designing markets. Harv Bus Rev; 2007 Oct;85(10):118-26, 166, PMID: 17972500

The top three related papers they suggest are (emphasis added)

1. The art of designing markets.
Roth AE.
Harv Bus Rev; 2007 Oct;85(10):118-26, 166.

2. [Art therapy and "art brut"].
Kovács E, Simon L.
Psychiatr Hung; 2010;25(4):323-32.

3. [Multiple pregnancies after ART: problems and possible solutions].
Shebl O, Ebner T, Sommergruber M, Sir A, Urdl W, Tews G.
Gynakol Geburtshilfliche Rundsch; 2007;47(1):3-8.




Tuesday, November 10, 2015

A plea for kidney sales in the Atlantic, from an Orthodox rabbi

Writing in the Atlantic, kidney donor Shmuly Yanklowitz argues that it would be easier for more people to do as he did if kidney donors could be paid.

Give a Kidney, Get a Check
Some people in poorer countries are compelled to sell their organs on the black market. Why not build a regulated system that compensates them fairly and ensures their safety? 

Yanklowitz is an Orthodox rabbi: here's a bit of his bio:

Rabbi Dr. Shmuly Yanklowitz is the Founder and President of Uri L’Tzedek. In 2012 and 2013, Newsweek rated Rav Shmuly one of the top 50 rabbis in America. Rav Shmuly is the author of 7 books on Jewish Ethics. He studied at the University of Texas as an undergraduate and Harvard University for a Masters in Leadership and Psychology, and he completed a second Masters degree in Jewish Philosophy at Yeshiva University. He completed his doctorate at Columbia University in Moral Development and Epistemology, and has taught as an instructor of moral philosophy at Barnard College and at the UCLA Law School. Shmuly was ordained as a Rabbi by Yeshivat Chovevei Torah (the YCT Rabbinical School) as a Wexner Graduate Fellow prior to which he studied Talmud and Jewish law at Yeshivat Hamivtar in Efrat, Israel for two years.

Monday, November 9, 2015

Assisted suicide legislation is clarified in Germany (family members won't be prosecuted, but professional assistance is forbidden)

Timo Mennle writes  from Zurich:

"the German parliament ("Bundestag") passed a new law concerning assisted suicide. The law generally forbids aiding others in their own suicide. However, it has two important points: first, it imposes a penalty of up to 3 years imprisonment if assistance for suicide is provided in a "business-like" fashion. This explicitly rules out the provision of such services for profit but also the professional provision by organization. Second, relatives and persons with a close relationships are exempt from punishment if they assist in a suicide out
of “altruistic motives.” The same is true for medical doctors in case of
decisions on a by-case basis. The new law closes a legal gap that previously left medial doctors and relatives in an ambiguous situation.

The express purpose of the new law is to "prevent a habituation of society to assisted suicide and to prevent the pressuring of old or sick persons into killing themselves." The vote in parliament was taken anonymously; the usual obligation of the members of parliament to vote according to their respective party's recommendation was explicitly suspended and they were asked to follow only their own conscience in this decision.

This and more information can be found in the following news articles
(unfortunately in German):

An English article about the topic can be found here:

Sunday, November 8, 2015

More on (third party) litigation financing, including a medieval word, "champerty"

In the NY Times: Should You Be Allowed to Invest in a Lawsuit?
In recent years, investors have started buying shares in other people’s
litigation proceedings. Are they warping the legal system in the process?
By MATTATHIAS SCHWARTZ

"Despite the hypercapitalist spirit of its rise, litigation finance actually has its roots in antiquity. According to Max Radin, a historian of ancient city-states, members of Athenian political clubs would back each other in lawsuits against their rivals. Apollodorus, a wealthy banker’s son, bought shares of lawsuits and hired professional orators — some of the earliest lawyers in Western history — to write his court speeches. The Romans tolerated the practice in some cases until the sixth century, when it was banned by Emperor Anastasius. The Roman taboo on litigation finance, Radin writes, sprang from the idea that ‘‘a controversy properly concerned only the persons actually involved in the original transaction,’’ not self-interested meddlers. In medieval England, litigants could hire ‘‘champions’’ to represent them in ‘‘trial by battle.’’ By the late 13th century, these strongmen were being compared to prostitutes, and their prevalence hastened the movement of dispute resolution to the courtroom. During the Middle Ages, this concept of ‘‘champerty’’ — assisting another person’s lawsuit in exchange for a share of the proceeds — emerged as part of the larger ecclesiastical taboo against usury. Though the word was associated with feudal land grabs, Radin notes that in practice, champerty was used by rich lawyers ‘‘on behalf of propertied defendants.’’ In 1787, Jeremy Bentham, the political philosopher, mocked prohibitions on champerty as a holdover from feudal days, where courts were beholden to ‘‘the sword of a baron, stalking into court with a rabble of retainers at his heels.’’
Nevertheless, a vestigial squeamishness about investing in lawsuits made its way across the Atlantic. The first such disputes, early in the 20th century, were over contingency fees, the practice, now common, of lawyers taking on a case in exchange for a percentage of future damages. Unlike England, which still caps fees for winning solicitors, America was open to this kind of payment structure, in keeping with its frontier ethic toward credit and speculation. Twenty-eight states now explicitly permit champerty, as long as funders do not act out of malice, back frivolous lawsuits or exert too much control over trial strategy."
****************

For previous posts on litigation financing, see here, here, and here.

Saturday, November 7, 2015

What a review of Who Gets What and Why would look like if my name were Andy...

The Nation gives me a trendier first name in a review of Who Gets What and Why.

The challenge of designing Asia-proof markets:

"One positive consequence of the global financial crisis is a complete rethink of the foundations of economic analysis. Of the thousands of ideas that are beginning to challenge economic orthodoxy, two books stand out. The first is Nassim Taleb's "Anti-fragility", which challenged the whole basis of conventional risk management. The other is Nobel Laureate Andy Roth's "Who Gets What - and Why: The New Economics of Matchmaking and Market Design", which returns to the fundamentals of markets."

Thursday, November 5, 2015

Algorithmic economics at Microsoft Research NYC

A rose by any other name (and a postdoc position at Microsoft Research NYC): Algorithmic Economics at Microsoft Research

Here's their description of what they do.

"Research in the Algorithmic Economics group at MSR-NYC spans a wide variety of topics at the interface of economics and computation. Application areas include auctions, crowdsourcing, gaming, information aggregation, machine learning in markets, market interfaces, market makers, monetization, online advertising, optimization, polling, prediction engines, preference elicitation, scoring rules, and social media.

Increasingly, online service design teams require dual expertise in social science and computer science, adding competence in economics, sociology, and psychology to more traditionally recognized requirements like algorithms, interfaces, systems, machine learning, and optimization. Our researchers combine expertise in computer science and economics to bridge the gap between modeling human behavior and engineering web-scale systems."


Call for Postdocs in Algorithmic Economics. Deadline for full consideration: December 8, 2015
"Eligible applicants must hold a Ph.D. in computer science, economics, operations research, or a related field. More specifically, we seek applicants who embody a diverse mix of skills, including a background in computer science (e.g., artificial intelligence or theory), and knowledge of the theoretical and experimental economics literature."

Wednesday, November 4, 2015

Are Uber drivers contractors or employees? It's in the courts

The WSJ has the story: Meet the Boston Lawyer Who’s Putting Uber on Trial
"Ms. Liss-Riordan represents drivers who say the ride-service company has illegally classified them as freelancers and not employees, barring them from reimbursements for their expenses, among other protections. She is also suing Lyft, Postmates and others over the labor model on which they depend.
...
"The closely watched Uber case, which continues in federal court in San Francisco on Wednesday, won class-action status in September and could go to trial as early as next year. A final verdict against Uber in this case could change how the firm does business with its drivers and send shocks through the on-demand economy.

"Uber’s lawyers have argued that it is a software platform connecting car owners with people seeking rides, and not the manager of a fleet of drivers. The $51 billion venture-backed company has no plans to settle and is willing to fight the case to the Supreme Court if necessary, according to people familiar with its legal strategy."

Airbnb unbound: Prop F voted down in San Francisco

Airbnb has escaped the narrow limits on rentals (75 days a year per property) that Proposition F sought to impose: SFGate has the story.
Prop. F: S.F. voters reject measure to restrict Airbnb rentals
By Carolyn Said Updated 12:14 am, Wednesday, November 4, 2015

"San Francisco voters handed a victory Tuesday to Airbnb and city residents who want to turn their homes into vacation rentals. Proposition F, a measure that would have drastically curbed short-term rentals, lost by 55 percent to 45 percent, with all precincts reporting and most mail ballots counted.

"Prop. F was one of the most contentious issues on the ballot and centered on whether vacation rentals divert scarce housing to lucrative illegal year-round hotels, as its backers claimed, or help middle-class people make ends meet, as Airbnb and other opponents of the measure said. Airbnb spent millions to defeat the measure, running the most expensive campaign in this city election."
...
"Prop. F sought to limit vacation rentals to 75 days a year; beef up enforcement and penalties; and establish big payoffs for neighbors and others who successfully sued violators. The measure’s backers, a coalition of housing activists, landlords, neighborhood groups and hotel workers’ unions, said the city’s existing regulations for short-term rentals, enacted in February, are toothless. They noted that only about 700 of Airbnb’s thousands of hosts complied with a requirement to register their homes as temporary rentals.

"Airbnb poured more than $8 million into the campaign to defeat Prop. F, dramatically outspending the measure’s backers, who raised $482,000, the bulk of it coming from Unite Here, the hotel workers’ union. Although Prop. F would have curbed all short-term rentals — including ones listed through other companies, such as HomeAway/VRBO, Flipkey or Craigslist — Airbnb clearly had the most at stake in its hometown and was the only company to fight the measure.
...
"Two weeks ago, Airbnb stumbled with an ill-advised corporate advertising campaign that used bus shelters and billboards to congratulate itself for remitting $12 million a year to San Francisco in hotel taxes. Social media exploded in outrage against the messages, which critics called snarky, passive-aggressive and tone-deaf. Airbnb apologized and removed the ads.

"Airbnb had a potent weapon besides its massive campaign war chest. A jaw-dropping 138,000 city residents stayed in Airbnb rentals or hosted guests themselves in the past year, the company said. It contacted all of them, urging them to vote against Prop. F. That compares with 446,841 registered voters in the whole city, about half of whom voted in 2014.

"Founded in San Francisco five years ago to provide temporary housing on airbeds, Airbnb is now one of the world’s most valuable startups, valued at $25.5 billion — more than the Marriott, Starwood or Wyndham hotel chains. It has more than 2 million listings in 190 countries. Its explosive success has set off struggles in cities worldwide as lawmakers and residents grapple with how to regulate the explosion of vacation rentals in their midst. But San Francisco is the first, and so far only, city where voters have weighed in."

***********
See yesterday's post for some more background.

Update: see this followup story, on the politics that come into play with a marketplace that has lots of users: Airbnb and Uber Mobilize Vast User Base to Sway Policy

Tuesday, November 3, 2015

Proposition F: does Airbnb have a repugnance problem?

The president won't get elected today, but it is an election day. And in San Francisco, the home of Airbnb, voters will vote on City of San Francisco Initiative to Restrict Short-Term Rentals, Proposition F (November 2015). It would restrict short term rentals to no more than 75 days a year.

Here's the story in the LA Times: San Francisco residents to vote on contentious Prop. F targeting Airbnb
"Proposition F supporters say it's about time tougher rules are created. Laws enacted by City Hall this year have been weak, and companies like Airbnb have been skirting the rules with impunity, according to attorney Joseph Tobener, who represents the San Francisco Tenants Union (also a supporter of Proposition F).

"I think they're having a heyday right now because there's no enforcement," Tobener said. "There is no enforcement in the city at all right now. It's do whatever you want. Rent out as much as you want. No one is going to enforce it."

To Tobener's point, enforcement of existing laws that require short-term rental hosts to be registered with the Planning Department seems lax. There are an estimated 10,000 short-term rental listings in San Francisco. As of Thursday, the recently created Office of Short-Term Rentals had issued only 728 registration certificates.

According to office director Kevin Guy, most San Francisco listings on Airbnb are probably in violation of current law."

Airbnb seems to have raised some visceral repugnance.
TechCrunch has the story: Housing Activists Swarm Airbnb On Day Before The Vote On Prop F
"A group of activists from the Coalition on Homelessness took over Airbnb headquarters in the SOMA neighborhood of San Francisco this afternoon to protest what they believe is a company at the root cause of evictions and homelessness in the city.

Airbnb has added the lion’s share (more than $8 million) into defeating Proposition F, a proposal some believe is hiking up the rent in SF and converting a bunch of needed housing into bed and breakfasts, instead. Prop F, which goes up for a vote tomorrow, would limit to 75 the amount of days Airbnb hosts could rent out their properties per year."

Monday, November 2, 2015

Who Gets What and Why in Dutch

Here is a book review in Dutch of the English version of Who Gets What and Why, by Burak Can. And here is his translation of his review in English: Book Review: “Who gets what and why?” by Al Roth