A matching service run by the Atlanta JCC: Housemate Match
"Housemate Match (HMM) is a unique, nationally recognized, home sharing program that matches mature adult homeowners who have extra room in their homes with adults (tenants) seeking a roommate in a beautiful and safe place to live in the Atlanta area.
HMM provides rooms to rent for those who prefer to share a home rather than living alone and for those who choose to remain in their home and age in place.
International friends are welcome. "
Thursday, October 23, 2008
Pawn shops--high interest loans for the credit challenged
The Telegraph reports on the credit crisis in England: Financial crisis: hard-up consumers are selling jewellery for cash
Pawnbrokers make loans with goods as collateral, and mostly items are redeemed.
"Pawnbrokers are distinct from high street buy-back shops such as Cash Converters, where a customer will sell an item with the option to buy it back 28 days later. If the customer doesn't repurchase the item, it goes into the shop to be sold (items are not usually limited to gold and jewellery; they can be electrical goods, for example).
Pawnbrokers are regulated alongside banks and other lenders by the Consumer Credit Act 1974. Borrowing through a pawnbroker may not be suitable for everyone and high interest rates mean it is not a long-term solution, as they themselves acknowledge, but sometimes it can resolve short-term cash flow problems. "
Pawnbrokers make loans with goods as collateral, and mostly items are redeemed.
"Pawnbrokers are distinct from high street buy-back shops such as Cash Converters, where a customer will sell an item with the option to buy it back 28 days later. If the customer doesn't repurchase the item, it goes into the shop to be sold (items are not usually limited to gold and jewellery; they can be electrical goods, for example).
Pawnbrokers are regulated alongside banks and other lenders by the Consumer Credit Act 1974. Borrowing through a pawnbroker may not be suitable for everyone and high interest rates mean it is not a long-term solution, as they themselves acknowledge, but sometimes it can resolve short-term cash flow problems. "
Congestion in the supply chain for new doctors
A new doctor needs not only a place in medical school, but also some clinical rotations in hospitals while still a medical student, and a residency position after graduation. New medical schools, and medical schools that wish to increase their class size, need to find these for their students, which is one of the constraints on increasing the size of US medical school output. The Chronicle of Higher Education describes the situation in Arizona: Shortage of Training Slots Threatens to Stall Influx of New Doctors. (An ungated version will be available for five days at http://chronicle.com/temp/email2.php?id=hVntG8hqVPcppSXRz6qmdkfdQtSZNB5V )
Wednesday, October 22, 2008
Britain votes to allow human-animal hybrids
On the repugnant transaction front, the Telegraph reports that after considerable debate, MPs vote to allow human-animal hybrids
"Following a landmark Commons vote, Britain will become one of a handful of countries in the world to encourage ground-breaking research by implanting human cells into an egg taken from an animal, usually a rabbit.
Pro-life MPs warned that the step could lead to the creation of half-human, half-ape "humanzees" or "minotaurs" - a claim denied by the Department of Health.
Hybrids - called "admixed embryos" by the scientific community - are banned in at least 21 countries, but scientists believe that they could be used to find cures for dozens of serious conditions, from heart disease to dementia.
MPs voted overwhelmingly in favour of the Human Fertilisation and Embryology Bill after being told that it could revolutionise the lives of hundreds of thousands of people, bringing to a close one of the most bitter Parliamentary wrangles of recent years. "
"Following a landmark Commons vote, Britain will become one of a handful of countries in the world to encourage ground-breaking research by implanting human cells into an egg taken from an animal, usually a rabbit.
Pro-life MPs warned that the step could lead to the creation of half-human, half-ape "humanzees" or "minotaurs" - a claim denied by the Department of Health.
Hybrids - called "admixed embryos" by the scientific community - are banned in at least 21 countries, but scientists believe that they could be used to find cures for dozens of serious conditions, from heart disease to dementia.
MPs voted overwhelmingly in favour of the Human Fertilisation and Embryology Bill after being told that it could revolutionise the lives of hundreds of thousands of people, bringing to a close one of the most bitter Parliamentary wrangles of recent years. "
Emergency Economic Stabilization Act of 2008 --market mechanisms
The bailout bill is pretty terse on the details of market design: here's the relevant section of H.R.1424, part b,SEC. 113. MINIMIZATION OF LONG-TERM COSTS AND MAXIMIZATION OF BENEFITS FOR TAXPAYERS
"(b) Use of Market Mechanisms- In making purchases under this Act , the Secretary shall--
(1) make such purchases at the lowest price that the Secretary determines to be consistent with the purposes of this Act ; and
(2) maximize the efficiency of the use of taxpayer resources by using market mechanisms, including auctions or reverse auctions, where appropriate.
(c) Direct Purchases- If the Secretary determines that use of a market mechanism under subsection (b) is not feasible or appropriate, and the purposes of the Act are best met through direct purchases from an individual financial institution, the Secretary shall pursue additional measures to ensure that prices paid for assets are reasonable and reflect the underlying value of the asset."
HT to Guhan Subramanian
"(b) Use of Market Mechanisms- In making purchases under this Act , the Secretary shall--
(1) make such purchases at the lowest price that the Secretary determines to be consistent with the purposes of this Act ; and
(2) maximize the efficiency of the use of taxpayer resources by using market mechanisms, including auctions or reverse auctions, where appropriate.
(c) Direct Purchases- If the Secretary determines that use of a market mechanism under subsection (b) is not feasible or appropriate, and the purposes of the Act are best met through direct purchases from an individual financial institution, the Secretary shall pursue additional measures to ensure that prices paid for assets are reasonable and reflect the underlying value of the asset."
HT to Guhan Subramanian
Tuesday, October 21, 2008
Market for books in translation
The Frankfurt book fair sounds like it's a lot of fun for publishing professionals, but it also sounds like the market for books to translate hasn't been changed much by technology: Wheeling and Dealing and Finding Books to Translate Into Dutch. Much of the information seems to be passed between people who know each other.
Market for Ivory
Ebay to Ban Sales of Ivory Products in January
There are lots of reasons that transactions can become repugnant: "EBay is banning the sale of ivory products to help protect African and Asian elephants."
''EBay's decision to wash its hands of the uncontrollable, bloody ivory trade is commendable and should set an example for others,'' said Teresa Telecky, policy director for Humane Society International.
There are lots of reasons that transactions can become repugnant: "EBay is banning the sale of ivory products to help protect African and Asian elephants."
''EBay's decision to wash its hands of the uncontrollable, bloody ivory trade is commendable and should set an example for others,'' said Teresa Telecky, policy director for Humane Society International.
Monday, October 20, 2008
Academic job market during a recession
The Chronicle of Higher Ed informally surveys supply and demand across academic disciplines: Job Market: Optimism, Tempered by Worries--Prospects for Ph.D.'s in some fields are decent, despite economic woes
(ungated version here for five days: http://chronicle.com/temp/email2.php?id=28qCgnMR5vznkhvXJdjPyXrMks4NssKk)
In a recession following a stock market decline, more professors may delay retirement, state universities may freeze hiring, non-academic hiring may slow down, all of which could potentially affect academic hiring, both by changing demand and by changing the nature of demand (e.g. changing the mix of tenure track versus other positions).
(ungated version here for five days: http://chronicle.com/temp/email2.php?id=28qCgnMR5vznkhvXJdjPyXrMks4NssKk)
In a recession following a stock market decline, more professors may delay retirement, state universities may freeze hiring, non-academic hiring may slow down, all of which could potentially affect academic hiring, both by changing demand and by changing the nature of demand (e.g. changing the mix of tenure track versus other positions).
Sunday, October 19, 2008
Market for drugs in Naples
The Times of London writes of the drug market in Naples, where market norms are breaking down.
Apparently the proverbial honor among thieves has its limits:
"The viciousness appalled even high-ranking crime bosses. Targeting innocent relatives of clan members is supposedly against the unwritten rules of Italy’s mafias. The Camorra syndicates of the area, however, had little time for niceties when they saw their status as rulers of Europe’s single biggest drugs market threatened. "
One of the bosses reflects "“There is a big difference between now and then, between my generation and the one coming of age now,” he says, drawing heavily on a cigarette. “There is too much money at stake. As a result there are no more values, no more rules or principles. Before, people kept their word and answered for their actions. We called them men of consequence. But now everyone wants to become a boss. Any young punk wants to have power, wants to be someone. They make a mess of things and don’t want to carry responsibility. "
Apparently the proverbial honor among thieves has its limits:
"The viciousness appalled even high-ranking crime bosses. Targeting innocent relatives of clan members is supposedly against the unwritten rules of Italy’s mafias. The Camorra syndicates of the area, however, had little time for niceties when they saw their status as rulers of Europe’s single biggest drugs market threatened. "
One of the bosses reflects "“There is a big difference between now and then, between my generation and the one coming of age now,” he says, drawing heavily on a cigarette. “There is too much money at stake. As a result there are no more values, no more rules or principles. Before, people kept their word and answered for their actions. We called them men of consequence. But now everyone wants to become a boss. Any young punk wants to have power, wants to be someone. They make a mess of things and don’t want to carry responsibility. "
Black market in poverty--fraudulent ration cards
The Hindu reports: Hi-tech foodgrains rationing system introduced for below poverty line families
"Bangalore: The State Government has introduced a hi-tech rationing system which will ensure the timely supply of foodgrains to people living below the poverty line and simultaneously prevent black-marketing and circulation of bogus ration cards. ...
"Governments in the State over the past three decades have found it difficult to check the rampant black-marketing in foodgrains and circulation of bogus ration cards, although it is evident that politicians have been behind the large-scale issue of below poverty line cards in exchange for votes. "
"Bangalore: The State Government has introduced a hi-tech rationing system which will ensure the timely supply of foodgrains to people living below the poverty line and simultaneously prevent black-marketing and circulation of bogus ration cards. ...
"Governments in the State over the past three decades have found it difficult to check the rampant black-marketing in foodgrains and circulation of bogus ration cards, although it is evident that politicians have been behind the large-scale issue of below poverty line cards in exchange for votes. "
Assisted suicide in England, continued
The recent case of an Englishman whose family travelled with him to Switzerland to end his life has led to renewed debate on English laws against assisted suicide. The Telegraph quotes the British philosopher Mary (Baroness) Warnock:
""We have a moral obligation to other people to take their seriously reached decisions with regard to their own lives equally seriously," she said.
Her comments came after Mr James' parents were questioned by West Mercia Police after travelling with him to Switzerland. "
""We have a moral obligation to other people to take their seriously reached decisions with regard to their own lives equally seriously," she said.
Her comments came after Mr James' parents were questioned by West Mercia Police after travelling with him to Switzerland. "
The spot market for manual labor
Market for Day Laborers Sours With the Economy
"As the economy has worsened, the number of laborers gathering at the Home Depot here has grown, making the competition for fewer jobs that much fiercer. The newcomers have arrived from other cities, thinking things would be better in New York. Or they have been laid off from semipermanent jobs in manufacturing and construction, either as a result of the economy or tougher crackdowns on illegal immigrants. "
"As the economy has worsened, the number of laborers gathering at the Home Depot here has grown, making the competition for fewer jobs that much fiercer. The newcomers have arrived from other cities, thinking things would be better in New York. Or they have been laid off from semipermanent jobs in manufacturing and construction, either as a result of the economy or tougher crackdowns on illegal immigrants. "
Incremental changes
It is often easier to make incremental changes in a marketplace, rather than big ones all at once. The NY Times has a story on Yahoo's painstaking process of changing its home page, a process apparently common to big web portals: Changing That Home Page? Take Baby Steps.
"You could call it stealth innovation. The company’s goal is to end up several months from now with a completely different, and presumably better, front page — with its audience intact. The effort is as much art as science and seeks to balance the company’s desire to innovate with its fear of alienating users. And it offers an example of how online services are designed and improved in a world where a rival’s offering is just a click away.
The challenges are not unique to Yahoo. All kinds of Web sites, big and small, face similar issues as they leap from version 1.0 to version 2.0 and beyond. But the largest, most successful sites have the most to lose by springing sudden changes on their users, so they often exercise particular caution. Google, for instance, has said it tries to make changes to its search engine that, on their own, are imperceptible, but that taken together result in a better product over time. With the same goal in mind, eBay once took 30 days to gradually change the background color of its home page from gray to white. "
"You could call it stealth innovation. The company’s goal is to end up several months from now with a completely different, and presumably better, front page — with its audience intact. The effort is as much art as science and seeks to balance the company’s desire to innovate with its fear of alienating users. And it offers an example of how online services are designed and improved in a world where a rival’s offering is just a click away.
The challenges are not unique to Yahoo. All kinds of Web sites, big and small, face similar issues as they leap from version 1.0 to version 2.0 and beyond. But the largest, most successful sites have the most to lose by springing sudden changes on their users, so they often exercise particular caution. Google, for instance, has said it tries to make changes to its search engine that, on their own, are imperceptible, but that taken together result in a better product over time. With the same goal in mind, eBay once took 30 days to gradually change the background color of its home page from gray to white. "
Saturday, October 18, 2008
Financial Fraud, and law enforcement
Some parts of market design involve criminal law, and these depend for their effectiveness on law enforcement. The NY Times reports that the
F.B.I. Struggles to Handle Wave of Financial Fraud Cases
"The bureau slashed its criminal investigative work force to expand its national security role after the Sept. 11 attacks, shifting more than 1,800 agents, or nearly one-third of all agents in criminal programs, to terrorism and intelligence duties. Current and former officials say the cutbacks have left the bureau seriously exposed in investigating areas like white-collar crime...
"So depleted are the ranks of the F.B.I.’s white-collar investigators that executives in the private sector say they have had difficulty attracting the bureau’s attention in cases involving possible frauds of millions of dollars."
F.B.I. Struggles to Handle Wave of Financial Fraud Cases
"The bureau slashed its criminal investigative work force to expand its national security role after the Sept. 11 attacks, shifting more than 1,800 agents, or nearly one-third of all agents in criminal programs, to terrorism and intelligence duties. Current and former officials say the cutbacks have left the bureau seriously exposed in investigating areas like white-collar crime...
"So depleted are the ranks of the F.B.I.’s white-collar investigators that executives in the private sector say they have had difficulty attracting the bureau’s attention in cases involving possible frauds of millions of dollars."
Incentives in (British) medicine, continued
Doctors paid thousands not to send patients to hospital for treatment
The Telegraph reports "Family doctors are being paid thousands of pounds not to send their patients to hospital for specialist treatment, sparking fears over standards of care.
...Dozens of incentive schemes have been uncovered which allow GPs to profit by slashing the number of patients they refer for hospital care.
Under one scheme, GPs stand to gain £59 for every patient not referred to hospital, if they cut an average referral rate by between two and eight per cent. "
Recall my earlier post on a different but related issue.
The Telegraph reports "Family doctors are being paid thousands of pounds not to send their patients to hospital for specialist treatment, sparking fears over standards of care.
...Dozens of incentive schemes have been uncovered which allow GPs to profit by slashing the number of patients they refer for hospital care.
Under one scheme, GPs stand to gain £59 for every patient not referred to hospital, if they cut an average referral rate by between two and eight per cent. "
Recall my earlier post on a different but related issue.
More on Darkmarket, the Craigslist of Crime
It was always the case that if you wanted to strike up a conversation with an undercover policeman, you could walk into a bar and whisper that you were looking to hire a hitman. It turns out that this is true in cyberspace as well: Cybercrime Supersite 'DarkMarket' Was FBI Sting, Documents Confirm
"Like earlier crime sites, DarkMarket allowed buyers and sellers of stolen identities and credit card data to meet and do business in an entrepreneurial, peer-reviewed environment. Products for sale ran the gamut from specialized hardware, to electronic banking logins collected from phishing attacks, stolen personal data needed to assume a consumer's identity ("full infos") and credit card magstripe swipes ("dumps), which are used to produce counterfeit cards. Vendors were encouraged to submit their goods for review before offering them for sale.
...the FBI used DarkMarket to build "intelligence briefs" on its members, complete with their internet IP addresses and details of their activities on the site. In at least some cases, the bureau matched the information with transaction records provided by the electronic currency service E-Gold."
In any event, the FBI went out in character. You can read the final closedown message here: 56 Arrested in DarkMarket Sting, Says FBI
HT to Steve Leider (who is on the market this year)
"Like earlier crime sites, DarkMarket allowed buyers and sellers of stolen identities and credit card data to meet and do business in an entrepreneurial, peer-reviewed environment. Products for sale ran the gamut from specialized hardware, to electronic banking logins collected from phishing attacks, stolen personal data needed to assume a consumer's identity ("full infos") and credit card magstripe swipes ("dumps), which are used to produce counterfeit cards. Vendors were encouraged to submit their goods for review before offering them for sale.
...the FBI used DarkMarket to build "intelligence briefs" on its members, complete with their internet IP addresses and details of their activities on the site. In at least some cases, the bureau matched the information with transaction records provided by the electronic currency service E-Gold."
In any event, the FBI went out in character. You can read the final closedown message here: 56 Arrested in DarkMarket Sting, Says FBI
HT to Steve Leider (who is on the market this year)
Friday, October 17, 2008
DarkMarket
The London Times reports: Online crime marketplace DarkMarket closed following UK police raids
"DarkMarket was used to swap information about fraud techniques and to sell credit card details. In December, The Times revealed that websites such as DarkMarket were selling financial details of tens of thousands of Britons for less than £1. "
"DarkMarket was used to swap information about fraud techniques and to sell credit card details. In December, The Times revealed that websites such as DarkMarket were selling financial details of tens of thousands of Britons for less than £1. "
Assisted suicide: Switzerland and England
The London Times reports that prosecutors are looking into the case of a British citizen whose family helped him travel to a Swiss clinic to die: 'Second-class life' not enough for injured rugby star Daniel James
"More than 100 Britons are claimed to have travelled to Swiss clinic where Daniel died to make use of laws that allow assisted suicide. Most are in the final stages of a terminal illness.
Although assisted suicide is illegal in Britain and carries a sentence of up to 14 years in jail no one has been prosecuted for taking someone to Dignitas. The figure on assisted dying, was released by the clinic at the start of a High Court test challenge to the laws that ban aiding and abetting suicide. "
"More than 100 Britons are claimed to have travelled to Swiss clinic where Daniel died to make use of laws that allow assisted suicide. Most are in the final stages of a terminal illness.
Although assisted suicide is illegal in Britain and carries a sentence of up to 14 years in jail no one has been prosecuted for taking someone to Dignitas. The figure on assisted dying, was released by the clinic at the start of a High Court test challenge to the laws that ban aiding and abetting suicide. "
Black market for body parts
Former UCLA Exec Pleads Guilty to Body Trafficking
"The former chief of UCLA's cadaver program pleaded guilty Friday for his role in selling donated body parts to medical, drug and research companies in a scheme that netted up to $1 million, prosecutors said.
Henry Reid, 58, pleaded guilty in Los Angeles County Superior Court to one count of conspiracy to commit grand theft, with a special allegation that he damaged or destroyed more than $1 million worth of school property, which refers to the donated bodies."
"The former chief of UCLA's cadaver program pleaded guilty Friday for his role in selling donated body parts to medical, drug and research companies in a scheme that netted up to $1 million, prosecutors said.
Henry Reid, 58, pleaded guilty in Los Angeles County Superior Court to one count of conspiracy to commit grand theft, with a special allegation that he damaged or destroyed more than $1 million worth of school property, which refers to the donated bodies."
New survey of matching by Sonmez and Unver
Allocation and Exchange of Discrete Resources: Matching Market Design for House Allocation, Kidney Exchange, and School Choice by Tayfun Sonmez and Utku Unver, forthcoming in the Handbook of Social Economics edited by Jess Benhabib, Alberto Bisin, and Matthew Jackson.
Thursday, October 16, 2008
Arrow in the Guardian on the financial crisis
Economists are accustomed to think of markets as being public goods, but Ken Arrow writes that they may have negative externalities if they increase asymmetric information, and generally make reliable understanding harder to come by:
"the root is this conflict between the genuine social value of increased variety and spread of risk-bearing securities and the limits imposed by the growing difficulty of understanding the underlying risks imposed by growing complexity."
"the root is this conflict between the genuine social value of increased variety and spread of risk-bearing securities and the limits imposed by the growing difficulty of understanding the underlying risks imposed by growing complexity."
Experiments in market design: financial bailout
NPR has followed up their earlier coverage of the Ausubel-Cramton reverse auction proposal with a brief story reporting on some experiments they are running with it: Can the Banks Cheat?
Hat tip to Steve Leider (an innovative experimenter and behavioral economist on the market this year:)
Hat tip to Steve Leider (an innovative experimenter and behavioral economist on the market this year:)
Wednesday, October 15, 2008
Market design that you can't refuse: Treasury switches to equity
The NY Times reports that the latest change of direction in the financial bailout was presented as an ultimatum by the Treasury to big banks: Drama Behind a $250 Billion Banking Deal
Tuesday, October 14, 2008
Peer to peer lending in the credit crunch
Alan Krueger, writing in the NY Times blog, notes that even borrowers with good credit are being moved by circumstance to some of the peer to peer lenders: In Credit Crisis, Some Turn to Online Peers for Cash
Sunday, October 12, 2008
Congestion fees: "Lexus lanes" considered in UK
The Telegraph reports that British traffic authorities are considering allowing motorists driving alone to pay to be allowed to drive in less crowded lanes previously reserved for high occupancy vehicles: 'Lexus lanes' could be trialled within two years .
The automobile association finds this repugnant:
"The plans were condemned by the AA.
"Our members oppose them, they don't want to pay to use hot lanes," a spokesman said. "Why should people have to fork out to avoid congestion?" "
The automobile association finds this repugnant:
"The plans were condemned by the AA.
"Our members oppose them, they don't want to pay to use hot lanes," a spokesman said. "Why should people have to fork out to avoid congestion?" "
Tipping--in restaurants
The NY Times reports on the history of how that aristocratic European institution became an American custom: Why Tip?
It was once widely regarded as a repugnant transaction:
"Ultimately, even those who in principle opposed the practice found themselves unable to stiff their servers. Samuel Gompers, who was president of the American Federation of Labor and a leading figure of the anti-tipping movement, admitted that he “followed the usual custom of giving tips.” "
Ben Franklin worried about it: "“To overtip is to appear an ass: to undertip is to appear an even greater ass,” Benjamin Franklin reportedly noted during his stint in Paris, and his quandary continues to vex American diners."
But eventually the custom caught on in America even as it waned it Europe.
It was once widely regarded as a repugnant transaction:
"Ultimately, even those who in principle opposed the practice found themselves unable to stiff their servers. Samuel Gompers, who was president of the American Federation of Labor and a leading figure of the anti-tipping movement, admitted that he “followed the usual custom of giving tips.” "
Ben Franklin worried about it: "“To overtip is to appear an ass: to undertip is to appear an even greater ass,” Benjamin Franklin reportedly noted during his stint in Paris, and his quandary continues to vex American diners."
But eventually the custom caught on in America even as it waned it Europe.
Kol Nidre: Contract law when your counterparty is omnipotent
Michael Weiss recounts in Slate how the Kol Nidre prayer , has changed over time.
Happy Hour
This story, from the Times of London, seems to combine at least two themes commonly encountered in legislation limiting repugnant transactions: Ministers to ban free drinks for women
E-retailing
The NY Times reviews some of the history of eBay and Amazon: Amid the Gloom, an E-Commerce War
Friday, October 10, 2008
Marriage Market--gay marriage legalized in CT
Conn. High Court Rules Gay Couples Can Marry
We are witnessing a transaction widely regarded as repugnant since Biblical antiquity being reassessed in light of modern ideas about equal protection under the law.
We are witnessing a transaction widely regarded as repugnant since Biblical antiquity being reassessed in light of modern ideas about equal protection under the law.
Market for economic advice (market failure)
This morning Peter Cramton and Larry Ausubel were on NPR talking about their reverse auction proposal, and The Chronicle of Higher Education writes about how little advice Congress got from economists on the financial rescue plans (i.e. not only how but what to buy, etc):
In Dismal Times, Economists Try to Shape Financial Debates (a permanent link for subscribers here)
Some quotes:
"Legislation drafted in haste and negotiated with recalcitrant partners is going to be bad legislation"
"Despite his frustrations with Congress, Mr. Galbraith says that he learned from watching his father for many years that it is important never to condescend to policy makers. “These are serious people, and you need to speak to them in a candid and serious way,” he says. “The question is not so much what economists need to say to policy makers, but what kind of policy education economists need in order to be able to intelligently understand the constraints that policy makers operate under.”
But one of the professors who joined Mr. Zingales in writing the anti-bailout petition takes a dimmer view of economists' efforts to speak directly into lawmakers' ears.
“The business of advice remains what it was,” says John H. Cochrane, a professor of finance at the University of Chicago. “You have to be willing become a sort of media person. You have to tailor your advice to what people want to hear, and then shade it a bit in the direction of common sense.” "
In Dismal Times, Economists Try to Shape Financial Debates (a permanent link for subscribers here)
Some quotes:
"Legislation drafted in haste and negotiated with recalcitrant partners is going to be bad legislation"
"Despite his frustrations with Congress, Mr. Galbraith says that he learned from watching his father for many years that it is important never to condescend to policy makers. “These are serious people, and you need to speak to them in a candid and serious way,” he says. “The question is not so much what economists need to say to policy makers, but what kind of policy education economists need in order to be able to intelligently understand the constraints that policy makers operate under.”
But one of the professors who joined Mr. Zingales in writing the anti-bailout petition takes a dimmer view of economists' efforts to speak directly into lawmakers' ears.
“The business of advice remains what it was,” says John H. Cochrane, a professor of finance at the University of Chicago. “You have to be willing become a sort of media person. You have to tailor your advice to what people want to hear, and then shade it a bit in the direction of common sense.” "
Online advertising--Ben Edelman
Securing Online Advertising: Rustlers and Sheriffs in the New Wild West
There's a lot of fraud in online advertising, in all the directions you can think of and some you probably haven't. Here's the paper.
I nominate Ben Edelman for Sheriff.
There's a lot of fraud in online advertising, in all the directions you can think of and some you probably haven't. Here's the paper.
I nominate Ben Edelman for Sheriff.
Thursday, October 9, 2008
Electric Car Stations in Hawaii
How can you enact a move from a gas station based fueling grid to an electric charging station based grid? Easy - start on an island. Behind this effort is Better Place, a California based start up with a vision of creating a network of charging stations for electric cars.
"California-based company Better Place will operate the stations on a subscription-based system. Owners could sign-up for a monthly plan or choose to pay as they use. The company will own the batteries, which can run upwards to $11,000, and loan them out to drivers."
http://gas2.org/2008/10/07/hawaii-to-get-electric-car-battery-sharing-program/
"California-based company Better Place will operate the stations on a subscription-based system. Owners could sign-up for a monthly plan or choose to pay as they use. The company will own the batteries, which can run upwards to $11,000, and loan them out to drivers."
http://gas2.org/2008/10/07/hawaii-to-get-electric-car-battery-sharing-program/
Organs for transplantation
The Economist has a good article summarizing The gap between supply and demand for transplantable organs around the world, and the various ways in which organs are and have been obtained, and some of the factors that get in the way of increasing supply.
The article has a table that makes the often overlooked point that the U.S. has very high donation rates of both live and deceased donor organs compared to most other countries*, despite having an opt-in system (you aren't a donor unless you (or your next of kin) says you are). But the shortage persists...
*The U.S. has the second highest live donor rate after Iran, which has a market for kidneys, and second highest deceased donor rate after Spain. When I spoke about kidney exchange at the Barcelona Clinic in 2004, the transplant coordinators there attributed their success to the professionalization of the job of acquiring deceased donor organs.
hat tip to Juan Camilo Cardenas
The article has a table that makes the often overlooked point that the U.S. has very high donation rates of both live and deceased donor organs compared to most other countries*, despite having an opt-in system (you aren't a donor unless you (or your next of kin) says you are). But the shortage persists...
*The U.S. has the second highest live donor rate after Iran, which has a market for kidneys, and second highest deceased donor rate after Spain. When I spoke about kidney exchange at the Barcelona Clinic in 2004, the transplant coordinators there attributed their success to the professionalization of the job of acquiring deceased donor organs.
hat tip to Juan Camilo Cardenas
Auctions for airline takeoff and landing slots, continued
Feds Go Forward With NYC Airport Experiment
Plans for slot auctions at LaGuardia, Kennedy, and Newark continue, but it sounds like the fight is far from over.
"Federal transportation officials say much of the reason for nationwide flight delays is that airlines have tried to cram too many planes -- and too many small planes -- onto New York runways, and the overscheduling just isn't realistic.
To fix that, they have capped the number of flights coming into or out of those airports, and now intend to auction off a fraction of those coveted slots to airline bidders. An auction, they say, will use market forces of supply and demand to make the flight schedule more efficient."
...
" Critics of the plan are furious.
''It is simply shocking that the DOT is unabashedly continuing this ideological battle despite the staunch opposition from the entire aviation community and the independent finding that the DOT lacks the power under the law to implement the proposal in the first place,'' Sen. Charles Schumer, D-N.Y., said in a statement."
Plans for slot auctions at LaGuardia, Kennedy, and Newark continue, but it sounds like the fight is far from over.
"Federal transportation officials say much of the reason for nationwide flight delays is that airlines have tried to cram too many planes -- and too many small planes -- onto New York runways, and the overscheduling just isn't realistic.
To fix that, they have capped the number of flights coming into or out of those airports, and now intend to auction off a fraction of those coveted slots to airline bidders. An auction, they say, will use market forces of supply and demand to make the flight schedule more efficient."
...
" Critics of the plan are furious.
''It is simply shocking that the DOT is unabashedly continuing this ideological battle despite the staunch opposition from the entire aviation community and the independent finding that the DOT lacks the power under the law to implement the proposal in the first place,'' Sen. Charles Schumer, D-N.Y., said in a statement."
Adoption in Korea
Korea Aims to End Stigma of Adoption and Stop ‘Exporting’ Babies
"Daunted by the stigma surrounding adoption here, Cho Joong-bae and Kim In-soon delayed expanding their family for years. When they finally did six years ago, Mr. Cho chose to tell his elderly parents that the child was the result of an affair, rather than admit she was adopted."
"Daunted by the stigma surrounding adoption here, Cho Joong-bae and Kim In-soon delayed expanding their family for years. When they finally did six years ago, Mr. Cho chose to tell his elderly parents that the child was the result of an affair, rather than admit she was adopted."
Market for political ads
A NYT story about presidential political ads caught my eye with the following observation about the fact that ads also garner free media:
"The ad showcased another ad strategy employed by both campaigns -- it was running only on national cable, a relatively inexpensive way of drawing media attention to an issue."
"The ad showcased another ad strategy employed by both campaigns -- it was running only on national cable, a relatively inexpensive way of drawing media attention to an issue."
Tuesday, October 7, 2008
Prediction markets--history
Historical Political Futures Markets: An International Perspective by Paul W. Rhode, Koleman Strumpf - #14377 (DAE)
Abstract:
Political future markets, in which investors bet on election outcomes, are often thought a recent invention. Such markets in fact have a long history in many Western countries. This paper traces the operation of political futures markets back to 16th Century Italy, 18th Century Britain, and 19th Century United States. In the United States, election betting was a common part of political campaigns in the antebellum period, but became increasingly concentrated in the organized futures markets in New York City over the postbellum period.
http://papers.nber.org/papers/W14377
Abstract:
Political future markets, in which investors bet on election outcomes, are often thought a recent invention. Such markets in fact have a long history in many Western countries. This paper traces the operation of political futures markets back to 16th Century Italy, 18th Century Britain, and 19th Century United States. In the United States, election betting was a common part of political campaigns in the antebellum period, but became increasingly concentrated in the organized futures markets in New York City over the postbellum period.
http://papers.nber.org/papers/W14377
Monday, October 6, 2008
A rose by any other name: marriage market version
'Bride' and 'Groom' to Be Restored to Calif. Forms
"When same-sex marriage became legal in the state on June 16, new marriage forms were issued with ''Party A'' and ''Party B'' where ''bride'' and ''groom'' used to be.
The new paperwork, which county clerks must start using Nov. 17, will have space for applicants' names next to optional boxes for checking ''bride'' or ''groom.'' "
"When same-sex marriage became legal in the state on June 16, new marriage forms were issued with ''Party A'' and ''Party B'' where ''bride'' and ''groom'' used to be.
The new paperwork, which county clerks must start using Nov. 17, will have space for applicants' names next to optional boxes for checking ''bride'' or ''groom.'' "
Sunday, October 5, 2008
Gaming the system, changing the rules. Pro Football
Rules evolve, as changes are made in reaction to unwanted behavior that the old rules elicit. The NFL will now allow coaches to communicate by radio directly with defensive players, reducing the need for hand signals.
The NY Times reports:
"Maybe defensive coaches should thank New England Coach Bill Belichick for trying to steal their signals. The N.F.L. had discussed giving the communication system to defenses in previous years, but in 2006, the measure fell two votes short of approval.
"Last spring, after Belichick was found to be videotaping opponents’ defensive signals, teams approved the plan by two votes. The nays were cast mostly by teams with offensive-minded coaches. The decision largely minimized the need for the hand signals that Belichick had been trying to glean. The Patriots were among the teams that switched their vote, from opposed to in favor. "
The NY Times reports:
"Maybe defensive coaches should thank New England Coach Bill Belichick for trying to steal their signals. The N.F.L. had discussed giving the communication system to defenses in previous years, but in 2006, the measure fell two votes short of approval.
"Last spring, after Belichick was found to be videotaping opponents’ defensive signals, teams approved the plan by two votes. The nays were cast mostly by teams with offensive-minded coaches. The decision largely minimized the need for the hand signals that Belichick had been trying to glean. The Patriots were among the teams that switched their vote, from opposed to in favor. "
Market for Basketball Players
At 19, Plotting New Path to N.B.A., via Europe
The NY Times reports that "The N.B.A. changed its eligibility rules for the 2006 draft, requiring players to be at least a year past their high school graduating class before turning pro."
That has sent some high school stars to college, but another path is to play pro ball in Europe, while waiting for the NBA.
The NY Times reports that "The N.B.A. changed its eligibility rules for the 2006 draft, requiring players to be at least a year past their high school graduating class before turning pro."
That has sent some high school stars to college, but another path is to play pro ball in Europe, while waiting for the NBA.
Saturday, October 4, 2008
Market design by committee
In the NY Times, A Snarl of Regulation quotes Secretary Paulson:
"Few, if any, will defend our current Balkanized system as optimal"
It comes with a diagram of the current financial regulatory organizations.
"Few, if any, will defend our current Balkanized system as optimal"
It comes with a diagram of the current financial regulatory organizations.
Friday, October 3, 2008
Auctioneers and sellers: Sotheby's mixed role
The WSJ reports Sotheby's Faces Suit Over Disclosure
"Mr. Minor's attorneys say he purchased the work on advice from a Sotheby's specialist and didn't realize the auction house was selling the work to recoup money owed it by another collector. ...
Mr. Minor's suit highlights the increasingly blurred lines that can develop at auction houses between their traditional role as disinterested auctioneers and their emerging business as direct stakeholders or financiers of the work they auction. In their competition for market share and their battle to secure top art work, Sotheby's and Christie's are increasingly acquiring, trading and preselling stakes in works they auction."
...
"For buyers, deciphering the financial dealings behind a work of art has become increasingly difficult. In some cases, like Mr. Minor's, auction houses sell the work as collateral for loans. More commonly, they issue so-called "guarantees" -- promises to pay the seller a minimum price for the work sold through the auction house. The auction house has to pay the guarantee even if the work doesn't sell, so it becomes an effective stakeholder.
Guarantees have surged in recent years. Last year, Sotheby's issued $902 million in guarantees, double the amount in 2006, according to securities filings."
"Mr. Minor's attorneys say he purchased the work on advice from a Sotheby's specialist and didn't realize the auction house was selling the work to recoup money owed it by another collector. ...
Mr. Minor's suit highlights the increasingly blurred lines that can develop at auction houses between their traditional role as disinterested auctioneers and their emerging business as direct stakeholders or financiers of the work they auction. In their competition for market share and their battle to secure top art work, Sotheby's and Christie's are increasingly acquiring, trading and preselling stakes in works they auction."
...
"For buyers, deciphering the financial dealings behind a work of art has become increasingly difficult. In some cases, like Mr. Minor's, auction houses sell the work as collateral for loans. More commonly, they issue so-called "guarantees" -- promises to pay the seller a minimum price for the work sold through the auction house. The auction house has to pay the guarantee even if the work doesn't sell, so it becomes an effective stakeholder.
Guarantees have surged in recent years. Last year, Sotheby's issued $902 million in guarantees, double the amount in 2006, according to securities filings."
Slow liquidation of Wachovia Short Term Fund
The NY Times reports: Colleges Scramble as Investment Fund Freezes.
To avoid a run as it liquidates (with withdrawals outpacing the ability of the fund to sell its short term assets in an orderly way), Wachovia has limited the rate at which its investors (colleges) can withdraw.
To avoid a run as it liquidates (with withdrawals outpacing the ability of the fund to sell its short term assets in an orderly way), Wachovia has limited the rate at which its investors (colleges) can withdraw.
Prison economy
The WSJ writes about currency substitutes for trade among inmates in
American prisons (subscription required):
Mackerel Economics in Prison Leads to Appreciation for Oily Fillets
Packs of Fish Catch On as Currency, Former Inmates Say; Officials Carp
"Unlike those more expensive delicacies, former prisoners say, the mack is a good stand-in for the greenback because each can (or pouch) costs about $1 and few -- other than weight-lifters craving protein -- want to eat it."
American prisons (subscription required):
Mackerel Economics in Prison Leads to Appreciation for Oily Fillets
Packs of Fish Catch On as Currency, Former Inmates Say; Officials Carp
"Unlike those more expensive delicacies, former prisoners say, the mack is a good stand-in for the greenback because each can (or pouch) costs about $1 and few -- other than weight-lifters craving protein -- want to eat it."
Thursday, October 2, 2008
Prediction Markets at Best Buy
Best Buy is running one of the largest internal corporate prediction markets. The experiment raises interesting questions about incentives for managers whose projects are "listed" on the market, as well as questions about how to design simple interfaces that thousands of non-experts can use.
"When executives at electronics retailer Best Buy Co. want to know if a new product or idea is likely to succeed, they can seek the opinion of rank-and-file employees by turning to the company's "prediction market."
"When executives at electronics retailer Best Buy Co. want to know if a new product or idea is likely to succeed, they can seek the opinion of rank-and-file employees by turning to the company's "prediction market."
The market, called TagTrade, allows Best Buy's workers to trade imaginary stocks based on answers to managers' questions. The market's judgment has often proved to be more accurate than the company's official forecasts."
(subscription required to see full article)
The credit crisis: anatomy of a market failure
The NY Times reports on 36 Hours of Alarm and Action as Crisis Spiraled.
"...But contagion was already spreading. The problem posed by the Lehman bankruptcy was not the losses suffered by hedge funds and other investors who traded stocks or bonds with the firms. As federal officials had predicted, that turned out to be manageable. (That was one reason the government did not step in to save the firm.)
The real problem was that a handful of hedge funds that used the firm’s London office to handle their trades had billions of dollars in balances frozen in the bankruptcy. "
"...But contagion was already spreading. The problem posed by the Lehman bankruptcy was not the losses suffered by hedge funds and other investors who traded stocks or bonds with the firms. As federal officials had predicted, that turned out to be manageable. (That was one reason the government did not step in to save the firm.)
The real problem was that a handful of hedge funds that used the firm’s London office to handle their trades had billions of dollars in balances frozen in the bankruptcy. "
University tuition in England
Top universities are funded differently in the UK and the US:
Oxford's Chancellor Argues for Raising Tuition Fee .
Oxford would like to have more control over its tuition.
(Recall my earlier post: University tuition in Israel )
Oxford's Chancellor Argues for Raising Tuition Fee .
Oxford would like to have more control over its tuition.
(Recall my earlier post: University tuition in Israel )
Wednesday, October 1, 2008
Auction design for bailout by treasury--Ausubel and Cramton
Peter Cramton writes: Dear Al,
Here is the longer version of my paper with Larry Ausubel on possible details of a troubled asset reverse auction. It might even be a good topic for your market design class.
"A Troubled Asset Reverse Auction" (with Lawrence M. Ausubel), Working Paper, University of Maryland, September 2008. [Presentation]
A Troubled Asset Reverse Auction
Lawrence M. Ausubel and Peter Cramton
30 September 2008
Summary
The US Treasury has proposed purchasing $700 billion of troubled assets to restore liquidity and solve the current financial crisis, using market mechanisms such as reverse auctions where appropriate. This paper presents a high-level design for a troubled asset reverse auction and discusses the auction design issues. We assume that the key objectives of the auction are to:
· provide a quick and effective means to purchase troubled assets and increase liquidity;
· protect the taxpayer by yielding a price for assets related to their value; and
· offer a transparent rules-based process that minimizes discretion and favoritism.
We propose a two-part approach.
Part 1. Groups of related securities are purchased in simultaneous descending clock auctions. The auctions operate on a security-by-security basis to avoid adverse selection. To assure that the auction for each security is competitive, the demand for each security is capped at the total quantity offered by all but the largest three sellers. Demand bids from private buyers are also allowed. The simultaneous clock auctions protect the taxpayer by yielding a competitive price for each security and allow bidders to manage liquidity constraints and portfolio risk. The resulting price discovery also improves the liquidity of the securities that are not purchased in the auctions.
Part 2. Following Part 1, the remaining quantity is purchased in descending clock auctions in which many securities are pooled together. To minimize adverse selection, reference prices are calculated for each security from a model that includes all of the characteristics of each security including the market information revealed in the security-by-security auctions of Part 1. Bids in the pooled auctions are specified in terms of a percentage of the reference price for each security.
The two parts are complementary. Part 1 quickly adds liquidity and establishes competitive market prices for many securities. Additional assets are then purchased in Part 2, taking full advantage of the market information revealed in Part 1.
Clock auctions have been used successfully in the electricity and natural gas sectors for assets worth tens of billions of dollars over the last seven years. Related approaches have been used to auction emission allowances, radio spectrum, timber rights, and rough diamonds.
The approach is feasible even on an extremely tight timetable. The development of the reference price model and data will require the most time to complete, but fortunately this is not needed until Part 2. The auctions of Part 1 can begin in a matter of weeks.
We limit the scope of the paper to taking the legislation as given and providing an auction design within the requirements of the legislation.
The paper is organized as follows. We begin by explaining the adverse selection problem that arises when different securities are pooled together. Then we provide an overview of the two-part reverse auction plan. Next we develop details of Part 1, the security-by-security auctions. We then present the motivation for the simultaneous descending clock auction. Next we present further details of Part 2, the pooled auctions. Then we explore how stock warrants and senior debt can be usefully incorporated into the purchases of troubled assets. Next we discuss the feasibility of successful implementation on an expedited schedule. We conclude that the design achieves the key objectives and can be implemented with minimal risk in a short period of time.
Here is the longer version of my paper with Larry Ausubel on possible details of a troubled asset reverse auction. It might even be a good topic for your market design class.
"A Troubled Asset Reverse Auction" (with Lawrence M. Ausubel), Working Paper, University of Maryland, September 2008. [Presentation]
A Troubled Asset Reverse Auction
Lawrence M. Ausubel and Peter Cramton
30 September 2008
Summary
The US Treasury has proposed purchasing $700 billion of troubled assets to restore liquidity and solve the current financial crisis, using market mechanisms such as reverse auctions where appropriate. This paper presents a high-level design for a troubled asset reverse auction and discusses the auction design issues. We assume that the key objectives of the auction are to:
· provide a quick and effective means to purchase troubled assets and increase liquidity;
· protect the taxpayer by yielding a price for assets related to their value; and
· offer a transparent rules-based process that minimizes discretion and favoritism.
We propose a two-part approach.
Part 1. Groups of related securities are purchased in simultaneous descending clock auctions. The auctions operate on a security-by-security basis to avoid adverse selection. To assure that the auction for each security is competitive, the demand for each security is capped at the total quantity offered by all but the largest three sellers. Demand bids from private buyers are also allowed. The simultaneous clock auctions protect the taxpayer by yielding a competitive price for each security and allow bidders to manage liquidity constraints and portfolio risk. The resulting price discovery also improves the liquidity of the securities that are not purchased in the auctions.
Part 2. Following Part 1, the remaining quantity is purchased in descending clock auctions in which many securities are pooled together. To minimize adverse selection, reference prices are calculated for each security from a model that includes all of the characteristics of each security including the market information revealed in the security-by-security auctions of Part 1. Bids in the pooled auctions are specified in terms of a percentage of the reference price for each security.
The two parts are complementary. Part 1 quickly adds liquidity and establishes competitive market prices for many securities. Additional assets are then purchased in Part 2, taking full advantage of the market information revealed in Part 1.
Clock auctions have been used successfully in the electricity and natural gas sectors for assets worth tens of billions of dollars over the last seven years. Related approaches have been used to auction emission allowances, radio spectrum, timber rights, and rough diamonds.
The approach is feasible even on an extremely tight timetable. The development of the reference price model and data will require the most time to complete, but fortunately this is not needed until Part 2. The auctions of Part 1 can begin in a matter of weeks.
We limit the scope of the paper to taking the legislation as given and providing an auction design within the requirements of the legislation.
The paper is organized as follows. We begin by explaining the adverse selection problem that arises when different securities are pooled together. Then we provide an overview of the two-part reverse auction plan. Next we develop details of Part 1, the security-by-security auctions. We then present the motivation for the simultaneous descending clock auction. Next we present further details of Part 2, the pooled auctions. Then we explore how stock warrants and senior debt can be usefully incorporated into the purchases of troubled assets. Next we discuss the feasibility of successful implementation on an expedited schedule. We conclude that the design achieves the key objectives and can be implemented with minimal risk in a short period of time.
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