Preston McAfee peers into the future (and sees market design)

Microsoft offers predictions from some of its futurists (and apparently economics fits somewhere between AI and data science...:

From AI and data science to cryptography: Microsoft researchers offer 16 predictions for ’16> 

Preston McAfee

Chief Economist, Microsoft

What will be the key breakthrough or advance in economics in 2016?Economists are struggling to understand why the current recovery involves low-productivity increases, in comparison to past recoveries, and whether low productivity is a new normal. I expect this conundrum will be answered in 2016, and the answer could have important implications for government policies to boost growth. Of course, it may turn out that the problem is measurement error, and that we are growing normally.

Looking forward 10 years to 2026, what will be the major advance in economics?Over the next 10 years, the major breakthrough of economics will be in applications of market design, which improves the efficiency of markets using a combination of game theory, economics and algorithm design. We’ve already seen fruitful application in search auctions, spectrum auctions, kidney exchange and school assignment.

How would you complete this sentence: 2016 will be the year that…Silicon Valley recognizes that the value of Uber is its marketplace, not the data, but that is probably too optimistic. The big data bubble has longer to run.

Improving Schools in MA: conference in Boston tomorrow

The conference in Boston tomorrow looks like a nice mix of academic researchers and education officials:
 Leveraging Research and Policy to Improve K-12 Education in Massachusetts

December 7, 2015, 8:00am - 5:30pm

Overview:

A num­ber of impor­tant issues are now on the state K-12 edu­ca­tion pol­icy agenda. In the past few years, schol­ars have pro­duced a wide range of results highly rel­e­vant for this agenda. The con­fer­ence is meant to bring mul­ti­ple stake­hold­ers together for a dis­cus­sion of research find­ings and future work that will be help­ful at this vital time.

Audience:

Policymakers, researchers, non-profit lead­ers and edu­ca­tion jour­nal­ists will be invited.

Agenda:

Click here for the agenda.

Registration:

Registration is now closed. Any jour­nal­ists who wish to attend should con­tact Annice Correia Gabel (acorreia@mit.edu).

Location:Federal Reserve Bank of Boston
600 Atlantic Ave #100
Boston, MA 02210

Keynote Speaker:Roland Fryer, Henry Lee Professor of Economics at Harvard University and fac­ulty direc­tor of the Education Innovation Laboratory.

Conference Organizers:

Katharine Bradbury, Federal Reserve Bank of Boston
Mary Burke, Federal Reserve Bank of Boston
Robert Triest, Federal Reserve Bank of Boston
Joshua Angrist, MIT and SEII
Parag Pathak, MIT and SEII

Contact:Please address any ques­tions to acorreia@mit.edu.

Among the talks are some that touch on school choice: 

Charters Without Lotteries: Testing Takeovers in New Orleans and Boston Atila Abdulkadiroğlu, Duke University Joshua Angrist, Massachusetts Institute of Technology and NBER Peter Hull, Massachusetts Institute of Technology* Parag A. Pathak, Massachusetts Institute of Technology and NBER

Leveraging Lotteries for School Value-Added: Testing and Estimation Joshua Angrist, Massachusetts Institute of Technology and NBER* Peter Hull, Massachusetts Institute of Technology Parag A. Pathak, Massachusetts Institute of Technology and NBER Christopher Walters, University of California, Berkeley and NBER

Overview of Unified Enrollment in American Cities Parag A. Pathak, Massachusetts Institute of Technology and NBER

The Handbook of Market Design--now in paperback

The Handbook of Market Design is now available in paperback: here's what the publisher (Oxford U Press) has to say about it.

New in Paperback

The Handbook of Market Design

Edited by Nir Vulkan, Alvin E. Roth, and Zvika Neeman

• Includes chapters by Alvin Roth, winner of the Nobel Prize in Economics 2012, including research for which he was awarded the prize
• A comprehensive overview that presents the latest research in applied market design
• Brings together all major researchers in the area, across disciplines- economics, engineering, computer science
• Chapters on matching markets where there is a need to match large two-sided populations of agents such as medical residents and hospitals, law clerks and judges, patients and kidney donors, to one another
• Active and fast-growing area of economics, lots of research, theory, and applications
• No other book on this subject

and here's a recent book review...

Book Review: The Handbook of Market Design

 

Mark S. Rzepczynski

Categories: Economics, Equity Investments, Standards, Ethics & Regulations (SER)

The Handbook of Market Design. 2013. Nir Vulkan, Alvin E. Roth, and Zvika Neeman.

SIEPR Policy Forum, Powerful Tools: Innovation Challenges for the Next President,

I'll be speaking at lunch today at the SIEPR Policy Forum, 
Powerful Tools:  Innovation Challenges for the Next President

About the Forum

Innovation is moving beyond information to the physical world.   For this Policy Forum, we consider three innovation areas with great promise and risk - tools powerful enough to change the world around us.  

The first panel is on using market force to accomplish good - especially in areas such as energy use and climate.   Al Roth will follow with a related theme - some of his Nobel winning work on matching markets.  The second panel is on the power fo advanced genetics - especially the implications of the new "CRISPR" technology.  The third panel is on the economics and policy issues surrounding end-to-end encryption, and especially whether firms and product designers can and should provide "exceptional access" to governments.  This affects not only our communication devices, but increasing the "Internet of Things."

Agenda

11:00am
Using Markets for Good

Smart Markets for Energy Conservation -  Zach Gentry (Enlighted Inc.)
From Worst Case to Smart Launches- Tom Colvin (Stanford)

12:00 pm Lunch Speaker:  Al Roth (Stanford Economics, 2012 Nobel Prize Winner in Economics)

Who Gets What – and Why

(Lunch following speaker, provided to all registered attendees)

1:00 pm
Designing Life

CRISPR-CAS9: Designer DNA - Hank Greely (Stanford)
Intellectual Property and DNA - Mark Lemley (Stanford) 

2:00 Economics and End-to-End Encryption:  The Cost and Benefits of "Exceptional Access"
(The economics of secure online communications versus government backdoors for the Internet and Internet of Things)

John Mitchell (Stanford Vice Provost, Computer Science)
Herbert Lin (Stanford, CISAC)
(Additional panel members TBD)

3:00 Innovation and Jobs
Enrico Moretti (U.C. Berkeley Economics)

 Reception to follow.

REGISTER HERE:  PLEASE RSVP HERE

Masahiko Aoki Memorial Conference

Masahiko Aoki Memorial Conference

The Shorenstein Asia-Pacific Research Center (APARC) Japan Program with the Freeman Spogli Institute of International Studies (FSI) as well as the Stanford Graduate School of Business, the Stanford Institute for Economic Policy Research (SIEPR), and the Stanford Department of Economics will be hosting a memorial conference and service on December 4th and 5th in honor of the late Masahiko Aoki. December 4th will be a full day conference featuring topics within Masa's extensive field of study and research including theoretical and applied economics, theory of institutions, corporate architecture and governance, and the Japanese and Chinese economies. The day will culminate with a cocktail reception. The Celebration of Life on December 5th will be a gathering for family and friends in remembrance of Masa with a light lunch reception to follow.

December 4, 2015

Memorial Conference

Bechtel Conference Center, 616 Serra Street

Stanford University

Agenda

8:30am - 8:50am            Breakfast & Registration

8:50am - 9:00am            Welcome Remarks: Takeo Hoshi (Stanford University)

9:00am - 9:30am            Kenneth Arrow (Stanford University), “The Role of Organizational Structure in the Economy”

9:30am - 10:00am          Paul Milgrom (Stanford University), "Designing the US Incentive Auction"

10:00am - 10:30am        Break

10:30am - 11:00am        Koichi Hamada, Yale University, “Masahiko Aoki: A Social Scientist"

11:00am - 11:30am        Kotaro Suzumura (Hitotsubashi University), “Masahiko Aoki (1938-2015): Recollections of his Pilgrimage and Legacy in Japan”

11:30am - 12:00pm       Yingyi Qian (Tsinghua University), "Masahiko Aoki and China"

12:00pm - 1:15pm          Lunch

1:15pm - 1:45pm            Jiahua Che (Chinese University of Hong Kong) presenting Masahiko Aoki's

                                            "Three-person game of institutional resilience vc transition: A model and

                                              China-Japan comparative history"

1:45pm - 2:15pm           Miguel Angel Garcia Cestona (Universitat Autonoma de Barcelona), "Corporate Governance and Employee Participation: some lessons from Mondragon"

2:15pm - 2:45pm           Herbert Gintis (Santa Fe Institute), "General Social Equilibrium and its Dynamics"

2:45pm - 3:15pm           Break

3:15pm - 3:45pm           Dale Jorgenson (Harvard University), "A Half Century of Trans-Pacific Competition"

3:45pm - 4:15pm           Avner Greif (Stanford University), "Comparative Institutional Analysis: China and Europe Compared"

4:15pm - 4:45pm           Francis Fukuyama (Stanford University), "Asian Kinship, Industrial Structure, and Trust in Government"

4:45pm - 5:00pm           Closing, Takeo Hoshi (Stanford University)

5:00pm - 6:00pm           Cocktail Reception

*Agenda is subject to change and will be updated as speakers are confirmed

December 5, 2015

Celebration of Life

Bechtel Conference Center, 616 Serra Street

Stanford University

Agenda

10:30am - 11:00am          Registration

11:00am - 12:00pm          Celebration of Life

12:00pm - 1:30pm            Lunch Reception

J.P. Morgan’s Holiday Reading List

J.P. Morgan’s Holiday Reading List

"The bank just released internally its ninth-annual holiday reading list, continuing a tradition of offering its private bank and investment-management clients a year-end roster of book suggestions. The list is focused on celebrating, giving and sharing, said Darin Oduyoye, who crafted the bank’s reading list idea and leads communications for J.P. Morgan’s asset management division.

"This year’s list of seven titles range from Jimmy Carter’s latest autobiography to the economics of matchmaking. It even includes a musical interlude: the cast recording of the hit Broadway show “Hamilton.” J.P. Morgan asset management executives from Dubai, Milan, Sao Paulo and New York, among other cities, met several times – and did a lot of reading — to narrow down the list from 516 titles, Mr. Oduyoye added.

"Here’s a look at this season’s picks:

A Full Life: Reflections at Ninety by Jimmy Carter

America’s Bank: The Epic Struggle to Create the Federal Reserve by Roger Lowenstein

Hamilton: An American Musical (Original Cast Recording) by Lin-Manuel Miranda

I Am Because You Are: How the Spirit of Ubuntu Inspired an Unlikely Friendship and Transformed a Community by Jacob Lief and Andrea Thompson

Life is Good: The Book by Bert Jacobs and John Jacobs

Maya Lin: Topologies by Maya Lin, text by Michael Brenson, William L. Fox and Paul Goldberger

Who Gets What — and Why: The New Economics of Matchmaking and Market Design by Alvin E. Roth

Could the Swiss apprenticeship market use some market design?

A review of Who Gets What and Why from Switzerland suggests that the Swiss apprenticeship market is unraveled and could use some market design: Ökonomie als Ingenieurskunst, by David Staubli.

Google Translate: "With these findings, perhaps could also improve the design of the Swiss apprenticeship market. The current system suffers from the same problems as before the American job market for junior doctors. A mandatory cut-off date to Submit quotations from the part of the company would preserve the future trainees from having to be set too early and then lose the motivation for the school routine. The coordinated timing to Submit apprenticeships contracts would also increase market depth and the "matching" improve."

Remembering Douglass North with a photo

I hardly knew North, but here is a picture of him, still vigorous at 94, at dinner in California in June 2014, with Ken Arrow and me.

North, Roth, and Arrow, June 2014

Douglass C. North, Maverick Economist and Nobel Laureate, Dies at 95

Obituary: Douglass C. North, Nobel Prize-winning economist, 95

Remembering Douglass North

An attempt to stem the uncontrolled flow of migrants to Europe

The NY Times has the story: E.U. Offers Turkey 3 Billion Euros to Stem Migrant Flow

"Prime Minister Ahmet Davutoglu, according to diplomats, will be promised 3 billion euros, or about $3.2 billion, in European aid and other inducements in exchange for Turkish action to stop migrants, most of them from the Middle East and Afghanistan, from reaching Greece and other countries on Europe’s outer fringe.
...
"Speaking to reporters in Brussels before the meeting, Ms. Merkel said Europe had many reasons to work closely with Turkey but that the essential part of the negotiations was the need to “replace illegal migration with legal migration.”
...
"Europe wants Turkey’s help in identifying genuine refugees, notably Syrians, who would be allowed entry in an orderly fashion, and in halting people fleeing poverty who do not have an obvious right to protection under international law.

"Donald Tusk, the president of the European Council, the body representing European leaders, set out Europe’s objective in blunt terms: “Our main goal is to stem the flow of migrants to Europe,” he said, describing Turkey as a “key partner” on issues including counterterrorism and the civil war in Syria.

"But he stressed that Europe itself needed to do more to secure its external borders and that it could not “outsource this obligation to any third country,” like Turkey. Failing to protect the Continent’s outer borders, he warned, would mean that one of Europe’s most important achievements, the 26-nation visa-free zone known as Schengen, “will become history.”

"Later, as the meeting got underway, Mr. Tusk told the summit that 1.5 million migrants had entered the European Union this year."

Incentives change how we think--Tyler Cowen on Sandro Ambuehl

Incentives change how we think is Tyler Cowen's post at MR this morning, on Sandro Ambuehl's job market paper.  (Now is the time to schedule an interview with him at the AEA meetings:)

Read the paper here: An Offer You Can't Refuse? Incentives Change How We Think 

Peter Cramton on Market Design (video)

Hedge fund manager Peter Pham interviews me about Who Gets What and Why

Not really a video (the first image is the only image:), just a recorded 35 minute conversation, focusing more than usual on financial markets :

@iTunes https://itunes.apple.com/us/podcast/who-gets-what-why-ft.-professor/id952345306?i=354665107&mt=2

@Podomatic http://thebigtrade.podomatic.com/entry/2015-10-13T02_24_40-07_00

@Youtube https://www.youtube.com/watch?v=9ef3bYYVSiY&index=41&list=PLXVUUPqHYjzFuJQyk2hUzXF4aYa1nazSs
**************

Pham also writes about our conversation in Forbes:  http://www.forbes.com/sites/peterpham/2015/10/27/who-gets-what-and-why/

Econ Job market: send two signals by this weekend!

If you are a new Ph.D. economist on the job market, Happy Thanksgiving weekend, and now is the time to send two signals through the AEA. (The deadline is Monday, but if you wait til then you might forget to get your signal in in time: it's 5pm Eastern Standard Time.) The idea is that you can help break through the congestion for interviews at the AEA meetings, by sending signals to two employers who might otherwise think you were unlikely to be interested enough in them for them to devote one of their interview slots to you.

Don't over-think this (it's not that big a deal), but do send two signals to places at which you'd be glad to get an interview but which might not realize that about you.

Here's the link:

Signaling for Interviews in the Economics Job Market

The AEA coordinates a mechanism through which applicants can signal their interest in receiving an interview at the January meetings. In mid-November, each registered JOE candidate on the economics job market will have the opportunity to register and designate no more than two departments (or other employers) to whom to send a signal of particular interest. The AEA will transmit these signals to the departments the candidates choose. (Signals will not be made public.) Employers do not need to do anything to register to receive signals; signals will be sent automatically to the email address provided at the time the JOE listing was submitted.

Please see Signaling for Interviews in the Economics Job Market for a detailed description as well as theTerms of Use and Privacy Policy.

2015 Signaling Timeline:

-2015 Signaling Registration & Signal Selection is now open.

-2015 Signaling Registration & Signal Selection will close on Monday, November 30, 2015 at 5:00 p.m. EST.

-2015 Signals will be sent to employers on December 2, 2015.

Please contact aea_signals "at" aeaweb.org with any questions or problems.

You must be logged in as a candidate to participate in signaling.

A deportation delayed, to allow for a kidney exchange.

Here's a complicated story:

KIDNEY TRANSPLANT: Brother gets reprieve before deportation to Cambodia

"A life-and-death fight by two Stockton brothers to delay the deportation of one of them for humanitarian reasons appears headed toward a positive outcome for the men, who came to the United States from Cambodia as refugees in 1985.

"A recent ruling by U.S. Immigration and Customs Enforcement will allow Touch Hak, 38, to remain in this country for three more years before his deportation for a past drug offense.

"Those three years will allow Hak to participate in a paired kidney-donation program intended to help his brother, 50-year-old Puthy Hak, receive the transplant he needs to remain alive.

“I did my (prison time) for nine years,” Touch Hak said Monday. “I tried to really rehabilitate myself. It’s a lot of weight lifted from our shoulders. All I want to do is give my brother another chance. This will open another door for him.”

Speaking about market design in Moscow (2 photos)

Where the red star is not a Christmas ornament...

Here I am at the Financial University

And here's a brief bio, in Russian:
Специалист по практическим приложения экономики
(Goog translate: Specialist in practical applications of the economy)

Alcott and Kessler on behavior and welfare changes from 'nudges"

An NBER working paper:

The Welfare Effects of Nudges: A Case Study of Energy Use Social Comparisons
Hunt Allcott, Judd B. Kessler
NBER Working Paper No. 21671
Issued in October 2015

Abstract:
"Nudge"-style interventions are typically evaluated on the basis of their effects on behavior, not social welfare. We use a field experiment to measure the welfare effects of one especially policy-relevant intervention, home energy conservation reports. We measure consumer welfare by sending introductory reports and using an incentive-compatible multiple price list to determine willingness-to-pay to continue the program. We combine this with estimates of implementation costs and externality reductions to carry out a comprehensive welfare evaluation. We find that this nudge increases social welfare, although traditional program evaluation approaches overstate welfare gains by a factor of five. To exploit significant individual-level heterogeneity in welfare gains, we develop a simple machine learning algorithm to optimally target the nudge; this would more than double the welfare gains. Our results highlight that nudges, even those that are highly effective at changing behavior, need to be evaluated based on their welfare implications.

In Search of the Missing Growth II: Social and Human Factors of Economic Development, in Moscow

I'll be giving a talk at Moscow's Financial University tomorrow:
Financial University under the Government of the Russian Federation In Search of the Missing Growth II International Economic Forum Panel Discussion on Social and Human Factors of Economic Development 

Kidney Exchange: Algorithms and Incentives: video of my lecture at the Simons Institute

Here's a video (about an hour, with Q&A) of the talk I gave at the Simons Institute for the Theory of Computing, at Berkeley, on Monday Nov 16.

Making the market for medical marijuana a little less medical

The NY Times has a story on how easy it is to get a prescription for marijuana in states like California, where medical marijuana is legal but recreational marijuana is  not supposed to be:
Silicon Valley Tries to Alter Your Perception of Cannabis

"One morning in September, I logged on to the website of HelloMD, a medical start-up that promises to connect patients with doctors instantly over the Internet. I filled out my personal details, explained my ailment — I often get heartburn — and entered in my credit card number to cover the $50 consultation fee.

"Within 10 minutes, a pediatrician based near Washington who is licensed to practice medicine in my home state of California popped up on my screen. ...

"The doctor asked about my medical history, current symptoms and familiarity with certain medicines. The interview lasted about three minutes, after which she announced what everyone who visits HelloMD expects to hear: According to her diagnosis, my heartburn made me a candidate for medical marijuana, which has been legal in California since 1996."
****************
Marijuana may eventually be legalized for recreational use in California (as it already is in Colorado, Oregon and the state of Washington). But the market isn't waiting for that:

Prescriptions: HelloMD: "Join and get a Doctor recommendation for medical marijuana. Fully Legal. 100% Online. Secure. Approved in 20 mins."

Find a medical dispensary: Weedmaps

Matchmaking among the Haredi

Ynet has a story: 
Ultra-orthodox matchmaking: everything it's best not to know

"Among the traditional Haredi public – not the modern stream, which has changed in recent years – pairing one's children is the exclusive responsibility of parents. No yeshiva boy is supposed to choose a girl himself. When parents think the time is right, the phase known as "starting to listen" begins – that is, taking suggestions and statements from matchmakers. For the Hasidim it happens around the age of 18, sometimes even younger. For Lithuanians and Sephardim, it's around the age of 20.

"During this stage parents approach matchmakers, tell them about their son or daughter and specify what they are seeking for their child. Finally, much like in the job market, they give the names of their relatives, neighbors and teachers who can provide those interested with "recommendations," or simply additional details.

"When the two sides feel that the stats are good, a meeting between the couple will be arranged. In most Haredi communities the couple will meet a maximum of three times before they become engaged. In the more devout Hasidic communities, the strict rules permit only one meeting, lasting about 20 minutes. The rationale: they will probably develop feelings, and feelings are bad for business.
...
"Haya, a neighbor of mine, got hitched to a match 38 years ago and is still married. To the same man. Eight out of her 15 children got married in the same way. "We aren't looking for love," she tells me. "We don't marry because I love you or you love me. We have a common goal – to build a home in Israel – and we work together in order to achieve that aim."