Monday, August 19, 2019

Paternalism as a motivation for repugnance: Ambuehl, Bernheim and Ockenfels

When I talk about repugnant transactions, I mean transactions that some people would like to engage in, but others don't think they should be allowed to, even if those others don't suffer themselves when the transactions take place.  In this recent NBER working paper, Sandro Ambuehl (one of the leaders in the study of these things) teams up with Doug Bernheim and Axel Ockenfels to study paternalism, which is closely related and often a primary cause of a transaction being repugnant (e.g. you might not think I should chew tobacco, because you think it would be bad for me...)

by Sandro Ambuehl, B.Douglas Bernheim, and Axel Ockenfels
NBER Working Paper 26119

Abstract: "We study experimentally when, why, and how people intervene in others' choices. Choice Architects (CAs) construct opportunity sets containing bundles of time-indexed payments for Choosers. CAs frequently prevent impatient choices despite opportunities to provide advice, believing Choosers benefit. We consider several hypotheses concerning CAs' motives. A conventional behavioral welfarist acts as a correctly informed social planner; a mistakes-projective paternalist removes options she wishes she could reject when choosing for herself; an ideals-projective paternalist seeks to align others' choices with her own aspirations. Ideals-projective paternalism provides the best explanation for interventions in the laboratory and rationalizes support for actual paternalistic policies."

From the conclusion:

"This  paper  examines  when,  why,  and  how  people  intervene  in  others’  choices.   In  a  setting  involvingintertemporal tradeoffs, we find that Choice Architects frequently remove options that are attractive toimpatient decision makers.  Choice Architects believe their interventions benefit the Chooser, and are thusacting paternalistically.  How do Choice Architects judge what is good for others?  This is a difficult taskbecause, by definition, paternalists are hesitant to rely on the judgments implicit in Choosers’ decisions,and indeed may even question whether Choosers are aware of their own best interests.  Ideals-projectivepaternalism  emerges  from  our  empirical  analysis  as  the  key  organizing  principle.   An  ideals-projectivepaternalist acts as if she believes other share, or ought to share, the ideals to which she aspires for herself."

I think of paternalism as being one cause of a lot of repugnance to certain transactions, but certainly not the only cause. For example, I don't think that repugnance to same-sex marriage was intended to help those who wanted to marry...

Sunday, August 18, 2019

Steve Leider celebrated for experimental economics

This cheerful email came in yesterday:

Dear ESA Colleagues,

We are pleased to announce that Stephen Leider has been selected as the 2019 recipient of the Vernon L. Smith Ascending Scholar Prize for his research on behavioral operations management.

This $50,000 prize is presented by the International Foundation for Research in Experimental Economics (IFREE).  You can learn more about IFREE, including its small grants program and workshops, at        
The Vernon L. Smith Ascending Scholar Prize is given to an exceptional scholar in the field of experimental economics whose work embodies IFREE’s mission to Promote Human Betterment through Experimental Economics to Improve the Understanding of Exchange Systems. Eligibility is limited to Assistant and Associate Professors (or equivalent). Dr. Leider was selected through a nomination process which identified many promising and highly-productive scholars in experimental economics who were then screened through peer review. Here is a link to the Prize announcement.

Please join us in congratulating Dr. Leider for his outstanding work and accomplishments!

Finally, mark your calendars, we will be sending out the call for nominations for next year's award in the Spring.

Jim Murphy & Cary Deck
IFREE Board Members

Here's a picture of Steve (wearing a tie) after his dissertation defense ten years ago:

Saturday, August 17, 2019

Poll: majority of Canadians approve of paying plasma donors

New survey results from Peter Jaworski
Canadians think that pay-for-plasma is “morally appropriate.”

"A significant majority of Canadians (63%) believed that paying Canadians for plasma donations was “morally appropriate.”

By age, 18-34 year-olds were most likely to think that pay-for-plasma was “morally appropriate,” with 75% saying so. 70% of 35-54 year-olds, and 49% of those 55 or older thought pay-for-plasma was morally appropriate.

By region, 64% of Atlantic Canada, 69% in Quebec, 61% in Ontario, 70% in the Prairies, 65% in Alberta, and 56% in British Columbia held that opinion.

The provinces of Ontario (2014), Alberta (2017), and British Columbia (2018) have all recently banned pay-for-plasma citing moral objections as part of the motivation behind the prohibitions"

Friday, August 16, 2019

Waitlists in NYC school choice--early reflections on yesterday's initial announcements

Yesterday the New York City Department of Education announced a change in the school choice assignment process--I gather that after one round of deferred acceptance, they will do something else, involving interim assignments  and wait lists.  (The original design included a subsequent round of deferred acceptance, after disseminating to unmatched students a list of schools with vacancies, and eliciting new preference lists for this second round.)
The details of the new plan for the second round aren't yet clear (at least to me).

Here's the press release from the city:

Mayor de Blasio, Chancellor Carranza Announce Easier and More Transparent Middle and High School Admissions Process
August 15, 2019
Families will now have one form and one deadline for middle and high school admissions

"“We are changing the middle and high school application processes so families don’t have to go through the gauntlet just to get a placement. There will be one application round and one deadline to make everyone’s lives easier.”
“We’ve heard from families and educators that they want a simpler, more transparent, and more accessible system of school choice, and today we’re taking a step forward,” said Schools Chancellor Richard A. Carranza. “This common-sense change will make a real difference for families across the five boroughs, and improve our middle and high school choice process for years to come.”
The DOE is eliminating the second application rounds for middle and high school. The main round application process and timeline will remain the same, with middle and high school applications opening in October with a December deadline. Students will receive their offer in March. Families can still appeal for travel, safety, or medical hardships; if families have any hardship, they will be able to access in-person support at Family Welcome Centers, rather than wait to participate in a second process. The waitlists will open after offers are released and will be a simpler, clearer process for families, increasing:
  • Transparency:  By knowing their waitlist position, families have a better understanding of their chances of getting into a preferred school option in the event that seats become available.
  • Ease: This is a shorter process that requires less paperwork. Rather than having to complete a second application and wait weeks—often into May or June—for a second decision or offer, families will complete one process, receive one offer, and receive any additional offers based on waitlist position.
  • Consistency:  Families will now have one admissions system at all grade levels, with the changes to the middle and high school process making it more similar to the elementary school admissions process. Currently the elementary school process has one round, and the middle and high school processes have two rounds with different names; now, families will not need to learn a different process each time a child applies to a new school—allowing them to focus on school options and not process."
From the WSJ:

New York City Introduces Wait Lists for Students Unhappy With School Placements
City’s complex school-choice system, in which students hope to be assigned to a top pick, has long been daunting for many families
By Leslie Brody

"In recent years, applicants who didn’t like their middle school assignments—given in spring for entry the next September—would have to go through an appeals process. High school applicants who didn’t like their offers would have to try a second round of applications and then appeal if need be.

"Under the new Department of Education system for fall 2020, students will be placed on wait lists for each school listed higher on their applications than the schools they were admitted to. They will be informed of their positions on wait lists and may be offered seats if they open up."

I got some emails about this. Here's my reply to a reporter...

"at this point I’m only an observer of NYC schools from a distance—I haven’t been involved in advising them for over a decade, and even then I worked only on the high school match, not anything involving middle schools.

So I don’t know anything about the current plans besides what I’ve read today ...

So I don’t have comments so much as questions.

  1. How is the NYCDOE going to handle the timing of moving waitlists?  Many vacancies don’t become visible until just before (or just after) the official start of school, which means that there could be some complications right around that time, for families and schools.
  2. How will students on multiple waitlists be dealt with?  Suppose a student waitlisted at multiple schools is admitted off one of them in the summer—if he or she accepts that new assignment, do his/her other waitlist positions remain?  
    1. (If other waitlists have to be given up, this could be a complicated decision whether to accept a somewhat preferred school, or wait for an even more preferred one…  If other waitlist positions can be maintained, then the process may move slowly, as some students accept for one waitlisted position, and then a better one when it becomes available, and maybe another…)
  3. How long will a student have to consider whether to accept a given waitlist position?

As with many questions of market design, the devil is in the details…"

and I added this in replies to followup emails asking for my thoughts on waitlists:

"I’ve always been cautious about waitlists, because some of the questions I asked you just don’t have good answers.  There’s a tension between wanting waitlists to move early and fast—to make planning easy for families and schools, and avoid disruption of the first week(s) of school, and wanting to give students the best chance at the schools they like best…"

"my colleagues and I never recommended waitlists to nyc, back at the turn of the century.:)
We thought it was important to reduce the number of “unmatched” students who had to be assigned to a school over which they  hadn’t had an opportunity to express preferences. This is why we had a second stage of the matching algorithm, in which lists of schools with still available places were disseminated to students unmatched in the first round, so that they could express preferences over these.

Another question about the new system is, how will such students now be assigned?  E.g. they might be assigned to the closest school to their home that has unfilled places.  In what order?  i.e. after some students are assigned this way, some schools will no longer have unfilled places, and students will have to be assigned to other schools.  The things I read today didn’t address that issue, but I gather that these interim assignments of unmatched students, which will turn out to be final assignments for students whose waitlists don’t move enough, will be made without having the students express preferences.

Another question about the waitlists: how will they be ordered?  According to the school priority/preferences that were used in the first round of matching?  Or perhaps unmatched students will be given preference? (that might sound attractive but I think it would be a bad idea, because it might make it seem desirable to be unmatched after the first round, which would interfere with eliciting student preferences altogether….)

My point is not to try to guess what design decisions have been made, but rather that there are lots of important decisions that have to be made to have a working system, and the initial announcements and news reports don’t reveal these. And they will have consequences.  So I hope that the system has been carefully designed."

Thursday, August 15, 2019

European Job Market for Economists, 2019 (in Rotterdam, Dec. 18-19)

The European Economic Association has announced that a unified European job market will take place in Rotterdam December 18 and 19.

"The EEA is pleased to announce that the 2019 European Job Market for economists will take place on Wednesday, December 18 and Thursday December 19, in Rotterdam, Netherlands. The format will be the same as that of the inaugural 2018 European Job Market: it will take place immediately after the Econometric Society Winter Meetings and will feature, alongside job interviews, an educational session and an invited lecture by Thomas Piketty.

"The EEA has joined forces with the 2 main national associations in Europe who until now have organised their own job market – the Royal Economic Society (UK) and the Spanish Economic Association (SAE) – and there will be ONE consolidated Job Market in Europe from now on."

Here's the web site: European Job Market for Economists, 2019

Wednesday, August 14, 2019

How is the U.S. opt in system of organ donation doing compared to an opt out system? Alex Glazier and Tom Mone in JAMA

Alex Glazier and Tom Mone run, respectively, the big Organ Procurement Organizations (OPOs) in New England and Southern California.

Success of Opt-In Organ Donation Policy in the United States
Alexandra Glazier, JD, MP1; Thomas Mone, MS
JAMA. Published online August 8, 2019. doi:10.1001/jama.2019.9187

"Over the past 5 years, the United States has experienced a 30% increase in deceased organ donors, from 8269 in 2013 to 10 722 in 2018,1 although the number or organs available for transplant still does not meet the increasing need.
"The US practice of opt-in donation presents 2 opportunities for organ donation. The primary path to donation in the United States is through donor registries and is uniquely successful compared with other countries, with more than 152 million registered donors, representing 54% of the US adult population.2 A registered individual provides legally binding permission for donation at the time of death, and family does not have the right to override this decision. Current US practice is to proceed with a registered donation if medically suitable, even over family objection.3 The ability to move forward based on the donor’s affirmative decision is ethically supported and consistent with autonomy as a central principle in US health care decision-making. It is also in alignment with successfully maximizing opt-in policy and the UAGA state laws. The second path to donation in the United States is surrogate authorization of organ donation from an unregistered individual (ie, who has not registered as an organ donor) at the time of that individual’s death. The successful implementation of US opt-in is thus accomplished by a legal framework that is well-aligned with donation practices.
"Proponents of an opt-out system for the United States may have some misunderstandings about the performance and utility of the current opt-in US system. Requiring an affirmative donation decision through opt-in policies is also aligned with the US cultural emphasis on individual rights and autonomy principles that is not achieved in the opt-out international experience. As identified below, the US opt-in system donation rates routinely exceed those of the best performing opt-out international countries.
"In 2018, the US overall organ donation rate was 38.1 donors per 10 000 deaths, second among reporting countries only to Spain (which has an opt-out donation policy). Six individual US states had rates that were higher than Spain, and US states comprised 43 of the top 50 jurisdictions. Furthermore, in the opt-in jurisdictions, the mean donation rate was 27% higher than rates in opt-out jurisdictions (32.6 vs 25.6 donors per 10 000 deaths, respectively). The data demonstrate that opt-in policies in the United States are associated with higher organ donation rates than some countries with opt-out policies as the legal default.
"If the United States moved to a similar opt-out policy, the percentage of potential donors opting out combined with family objections would need to be quite small to realize any gains in donation performance. There is also the real potential for the donation rate to decline, as evidenced in Wales, which continues to have below-average international levels and most recently in the Netherlands, where an increasing number of people (currently 31%) have opted out.
"The United States has experienced significant growth in deceased organ donors and continues to have one of the best donation rates in the world. Nevertheless, the critical need for organ transplant is not met. International data suggest that the most effective donation authorization strategy for the United States is to build on the current opt-in system that demonstrably works and to increase the number of registered donors from today’s 54% to 75% or higher. Doing so would be an accomplishment that would increase available organs for donation and save thousands of lives.

HT: Alex Chan

Tuesday, August 13, 2019

Contracts can be more than salaries: Hassidim, Romm, and Shorrer in EL

Not all matching with contracts is simple: here's a recent paper that helps put that in perspective.

Assaf Romm writes: "despite the insightful embedding results of Echenique (2012), Schlegel (2015) and Jagadeesan (2019), some real-life matching with contracts markets cannot be represented as markets with salaries. Specifically,  college admissions markets often contain schools that have preferences that do not satisfy unilateral substitutability, but do satisfy bilateral substitutability (Hatfield and Kojima, 2010) and/or hidden substitutes (Hatfield and Kominers, 2015). In this kind of markets the student-proposing deferred acceptance algorithm always concludes with a stable matching, but the existence of a student-optimal stable matching is not guaranteed, and this rules out any embedding into a Kelso-Crawford type of market (in which a student-optimal stable matching does exist)."

Economics Letters

Volume 181, August 2019, Pages 40-42

Contracts are not salaries in the hidden-substitutes domain


Real-life two-sided matching with contracts markets may not be embeddable into labor markets.
Hidden substitutes and bi-lateral substitutes preferences do not assure embeddability.
We provide examples of centralized college admissions markets that fall under this category.


We show that many-to-one matching markets with contracts where colleges’ preferences satisfy the hidden substitutes condition of Hatfield and Kominers (2015) may not be embedded, in the sense of Echenique (2012) into a Kelso and Crawford(1982) matching-with-salaries market. Our proof relies on a configurations of preferences that is observed in many college admissions markets.