Thursday, November 26, 2020

Madhav Raghavan on transparency (and on the European job market)

Madhav Raghavan is completing a postdoc at the University of Lausanne this year (working with Bettina Klaus), and is on the job market, primarily in Europe.  I got to know him when he visited us briefly at Stanford this year (in person, before having to retreat back to Switzerland, as Covid surged...)

His job market paper concerns the verifiability of the algorithms that run centralized clearinghouses, and how that can be improved by changing the kinds of feedback that participants receive.

Transparency in Centralised Allocation: Theory and Experiment  by Rustamdjan Hakimov and Madhav Raghavan

Abstract: Many algorithmic allocation mechanisms suffer from a verifiability problem: participants cannot check if their assignments are correct. This problem is compounded if there are suspicions that the designer has deviated from the true allocation. We formalise these concerns and propose solutions in an information-based framework. A participant's assignment is `verifiable' by her if any other assignment contradicts her information. A stronger requirement is `transparency', where the designer cannot deviate from the true allocation without being detected. We show how the communication of `terminal-cutoffs' and the use of `predictable' multi-stage mechanisms each provide information to participants that verifies their assignments. Even though the information from predictable mechanisms and terminal-cutoffs can each be manipulated by a dishonest designer without detection, in our main result we show that they nevertheless achieve transparency if used together. We suggest transparent environments for use in school admissions, single-object auctions and house allocation. We support the effectiveness of our solutions via a school admissions laboratory experiment.


The paper develops the theory in some generality, and also focuses on the particular case of the deferred acceptance algorithm, which is the subject of the experiment they report.  

If you're hiring, he's worth a close look.

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