Tom Payzant, Boston schools superintendent who reformed school choice, dies at 80

 Tom Payzant played a critical role in transforming Boston's school choice from an immediate acceptance algorithm that exposed students and families to complex strategic risk when navigating the system, to a deferred acceptance algorithm that simplified their participation. As Superintendent of Boston Public Schools, Tom came to understand those issues well, and acted on them.

Here's his obit in the Boston Globe.

Thomas Payzant, whose education vision lifted Boston’s schools, dies at 80, By Bryan Marquard

and here's the statement from Boston Public Schools:

SUPERINTENDENT'S STATEMENT ON THE PASSING OF TOM PAYZANT

Here's a pic I took of Atila Abdulkadiroglu, Parag Pathak, and Tayfun Sonmez when we met with Payzant and his colleagues at Boston Public School headquarters, during the years we worked with BPS, starting around 2003.

Atila Abdulkadiroglu, Parag Pathak and Tayfun Sonmez at Boston Public School headquarters

Here's a paper that came out of those meetings, describing the deliberations that ultimately led BPS to adopt a deferred acceptance algorithm design for it's school choice system.

• Abdulkadiroglu, Atila, Parag A. Pathak, Alvin E. Roth, and Tayfun Sonmez, The Boston Public School Match," American Economic Review, Papers and Proceedings, 95,2, May, 2005, 368-371.

Over the course of those years, I was privileged to watch Parag evolve from a super smart young grad student to being a leader in the design of school choice.

I'll post tomorrow about some of Parag's latest efforts to bring the work associated with the design and evaluation of school choice, and market design more generally, into the world of startup companies and big university labs.

The Art of Experimental Economics: Twenty Top Papers Reviewed , edited by Gary Charness and Mark Pingle

 Here's a forthcoming book that provides a unique and entertaining review of twenty influential papers in experimental economics. Katie Coffman and I wrote the review of the classic 2007 paper on gender and competition by Niederle and Vesterlund.

The Art of Experimental Economics: Twenty Top Papers Reviewed  Edited By Gary Charness, Mark Pingle  Forthcoming by Routledge

Item will ship after August 27, 2021  ISBN 9780367894306

Chapter 1: Introducing 20 Top Papers and their Reviewers  Gary Charness and Mark Pingle

Chapter 2: An Experimental Study of Competitive Market Behavior (by Vernon L. Smith)  Reviewed by Charles A. Holt

Chapter 3: The Strategy Method as an Instrument for the Exploration of Limited Rationality in Oligopoly Game Behavior (by Reinhard Selten)  Reviewed by Claudia Keser and Hartmut Kliemt

Chapter 4: An Experimental Analysis of Ultimatum Bargaining (by Werner Güth, Rolf Schmittberger and Bernd Schwarze)  Reviewed by Brit Grosskopf and Rosemarie Nagel

Chapter 5: The Winner’s Curse and Public Information in Common Value Auctions (by John H. Kagel and Dan Levin)  Reviewed by Gary Charness

Chapter 6: Group Size Effects in Public Goods Provision: The Voluntary Contributions Mechanism (by R. Mark Isaac and James M. Walker)  Reviewed by James Andreoni

Chapter 7:  Rational Expectations and the Aggregation of Diverse Information in Laboratory Security Markets (by Charles R. Plott and Shyam Sunder)    Reviewed by R. Mark Isaac

Chapter 8: Experimental Tests of the Endowment Effect and the Coase Theorem (by Daniel Kahneman, Jack L. Knetsch, Richard H. Thaler)   Reviewed by John A. List

Chapter 9: Bargaining and Market Behavior in Jerusalem, Ljubljana, Pittsburgh and Tokyo: An Experimental Study (by Alvin E. Roth, Vesna Prasnikar, Masahiro Okuno-Fujiwara and Shmuel Zamir) Reviewed by Armin Falk

Chapter 10: Unraveling in Guessing Games: An Experimental Study (by Rosemarie Nagel)  Reviewed by John H. Kagel and Antonio Penta

Chapter 11: Trust, Reciprocity, and Social History (by Joyce Berg, John Dickhaut, and Kevin McCabe) Reviewed by Vernon L. Smith

Chapter 12: Cooperation and Punishment in Public Goods Experiments (by Ernst Fehr and Simon Gachter)  Reviewed by Yan Chen

Chapter 13: A Fine is a Price (by Uri Gneezy and Aldo Rustichini)  Reviewed by Alex Imas

Chapter 14: Giving according to GARP: An Experimental Test of the Consistency of Preferences for Altruism (by James Andreoni and John Miller)  Reviewed by Catherine Eckel

Chapter 15: Risk Aversion and Incentive Effects (by Charles Holt and Susan Laury)  Reviewed by Kevin McCabe

Chapter 16: Does market experience eliminate market anomalies? (by John A. List) Reviewed by Matthias Sutter

Chapter 17: Promises and Partnership (by Gary Charness and Martin Dufwenberg)  Reviewed by Urs Fischbacher and Franziska Föllmi-Heusi

Chapter 18: The Hidden Costs of Control (by Armin Falk and Michael Kosfeld)  Reviewed by Laura Razzolini and Rachel Croson

Chapter 19: Do Women Shy Away from Competition? Do Men Compete Too Much? (by Muriel Niederle and Lise Vesterlund)  Reviewed by Katherine B. Coffman and Alvin E. Roth 

Chapter 20: Group Identity and Social Preferences (by Yan Chen and Sherry X. Li)  Reviewed by Marie Claire Villeval 

Chapter 21: Lies in Disguise—An Experimental Study on Cheating (by Urs Fischbacher and Franziska Föllmi-Heusi)  Reviewed by Uri Gneezy and Marta Serra-Garcia

***************

Here's my Foreword to the book:

 Twenty carefully chosen papers in experimental economics, reviewed and put in context by veteran experimenters, provide an excellent, close-up introduction to the richness and diversity of the field, and where it is coming from. These twenty papers appeared over a period of half a century, from 1962 to 2013, during which economic experiments went from being quite rare to taking their place among the standard tools of economics.

When John Kagel and I edited the Handbook of Experimental Economics, volumes 1 and 2 (1995 and 2016), we encouraged the chapter authors not to try to tell readers how to do good experiments, but to show them. And so it is with these papers: there are lots of ways to do good experiments, and here is a collection of twenty that have been influential. The reviews make clear that a successful, influential experiment is part of a scientific conversation that began well before the experiment was designed and conducted, and continued well after it was published and replicated. These conversations aren’t only among experimenters, nor are they only among economists: experiments add to scientific conversations of all sorts, answering some questions and raising others, often questions that couldn’t even be posed with equal precision in naturally occurring environments.   

Reader, beware. After reading this volume, you will want to read more, and, your curiosity aroused, may find yourself on the slippery slope of designing and conducting your own experiments.

Alvin E. Roth, Stanford University, December 2020.

Bibliography:

Kagel, J.H. and A.E. Roth (editors) Handbook of Experimental Economics, Princeton University Press, 1995.

Kagel, J.H. and A.E. Roth (editors) Handbook of Experimental Economics, Volume 2, Princeton University Press, 2016.

Uterus transplants considered in Japan

 Here's the story from the Asahi Shimbun, including some background. For the time being, only living-donor organs seem to be allowed under Japanese law:

Medical group allows for uterus transplants to give birth

"A Japanese Association of Medical Sciences committee released a report on July 14 clearing the way for uterus transplants, a rare procedure that faces obstacles. 

...

"The biggest issue facing the committee was that the transplant objective would be to allow the woman to give birth.

"That differs greatly from other transplants in which the main objective is to save the recipient’s life. In addition, committee members had to consider allowing a transplant operation that held major health risks for both the donor and recipient.

"According to a report, there have been 85 cases of uterus transplants in 16 nations overseas as of March and 40 have led to the delivery of a baby.

"In many of those cases, an in-vitro fertilized embryo is placed in the transplanted uterus. But the uterus is removed after childbirth because of the need to continue using immunosuppressant agents to prevent the body from rejecting the transplanted organ.

"In Japan, there are an estimated 60,000 to 70,000 women between the ages of 20 and 50 who were born without uteruses or have had their uteruses surgically removed due to tumors or other causes.

...

"There are also legal hurdles that have to be cleared.

"Japan’s organ transplant law does not include uteruses as an organ that can be removed for transplantation from a brain-dead individual.

"For that reason, the report allowed for transplants from live donors in only a very few cases to conduct clinical research.

"The report also called for revising the organ transplant law to allow for uterus transplants from brain-dead women.

"But even if the law was revised, organ donations from brain-dead individuals are still not widespread in Japan, meaning it would be almost impossible to plan for a uterus transplant operation.

"Experts were divided in their views about the latest report.

"Nobuhiko Suganuma, a professor of reproductive medicine at Nagoya University of Arts and Sciences who heads the Japan Society for Uterus Transplantation, said providing an alternative for women who want to give birth was a positive development.

"But Yukiko Saito, an associate professor of medical ethics at Kitasato University, raised concerns about approving an available technology just because there may be people who want to utilize it."

Redistribution through markets, in Econometrica, by Dworczak, Kominers, and Akbarpour

 Market designs involving taxes, or rationing, in the latest Econometrica, Vol. 89, No. 4 (July, 2021), 1665–1698:

REDISTRIBUTION THROUGH MARKETS by PIOTR DWORCZAK, SCOTT DUKE KOMINERS,  and MOHAMMAD AKBARPOUR

Abstract: "Policymakers frequently use price regulations as a response to inequality in the markets they control. In this paper, we examine the optimal structure of such policies from the perspective of mechanism design. We study a buyer-seller market in which agents have private information about both their valuations for an indivisible object and their marginal utilities for money. The planner seeks a mechanism that maximizes agents’ total utilities, subject to incentive and market-clearing constraints. We uncover the constrained Pareto frontier by identifying the optimal trade-off between allocative efficiency and redistribution. We find that competitive-equilibrium allocation is not always optimal. Instead, when there is inequality across sides of the market, the optimal design uses a tax-like mechanism, introducing a wedge between the buyer and seller prices, and redistributing the resulting surplus to the poorer side of the market via lump-sum payments. When there is significant same-side inequality that can be uncovered by market behavior, it may be optimal to impose price controls even though doing so induces rationing."

****************

" the classic idea that competitive-equilibrium pricing maximizes welfare relies on an implicit assumption that the designer places the same welfare weight on all agents in the market. Thus, the standard economic intuitions in support of competitive equilibrium pricing become unreliable as the dispersion of wealth in a society expands."

Emergency decision making and medical ethics for breakfast

 Saturday morning breakfast cereal (SMBC) has hidden a message for us here:

Does legal marijuana lead to the use of more dangerous drugs, or increase crime?

 It appears that the short answer is "No," according to this recent NBER working paper

Is Recreational Marijuana a Gateway to Harder Drug Use and Crime?  by Joseph J. Sabia, Dhaval M. Dave, Fawaz Alotaibi & Daniel I. Rees

WORKING PAPER 29038, DOI 10.3386/w29038,  July 2021

Recreational marijuana laws (RMLs), which legalize the possession of small quantities of marijuana for recreational use, have been adopted by 18 states and the District of Columbia. Opponents argue that RML-induced increases in marijuana consumption will serve as a “gateway” to harder drug use and crime. Using data covering the period 2000-2019 from a variety of national sources (the National Survey of Drug Use and Health, the Uniform Crime Reports, the National Vital Statistics System, and the Treatment Episode Data Set) this study is the first to comprehensively examine the effects of legalizing recreational marijuana on hard drug use, arrests, drug overdose deaths, suicides, and treatment admissions. Our analyses show that RMLs increase adult marijuana use and reduce drug-related arrests over an average post-legalization window of three to four years. There is little evidence to suggest that RML-induced increases in marijuana consumption encourage the use of harder substances or violent criminal activity.

U.S, drug overdose deaths at 93,000 in 2020

Fentanyl infused opioids are epidemic on the street. Here's the story from the Washington Post:

Drug overdose deaths soared to a record 93,000 last year By Lenny Bernstein  and Joel Achenbach

 The death toll jumped by more than 21,000, or nearly 30 percent, from 2019, according to provisional data released by the National Center for Health Statistics, eclipsing the record set that year.

...

"The estimated number of overdose deaths reached 93,331 in 2020, according to the new data. Annual final numbers usually differ little from the provisional figures released Wednesday. More than 900,000 people have died of overdoses since the U.S. drug epidemic began about 1999, according to the Centers for Disease Control and Prevention. The National Center for Health Statistics is part of the CDC.

"Opioids, primarily illegal fentanyl, continued to drive the death toll, as they have for years. Overdose deaths involving opioids reached 69,710 in 2020, up from 50,963 in 2019, according to the data. Deaths from methamphetamine and cocaine also rose.Nora Volkow, head of the National Institute on Drug Abuse, said in an interview that fentanyl has so thoroughly infiltrated the illegal drug supply that 70 percent of cocaine overdose deaths and 50 percent of methamphetamine overdose deaths also involved fentanyl."

Marketplace for supplies to produce vaccines: COVAX

 Scott Kominers sends me the following link, of a marketplace intended to notify vaccine makers of supplies that may be available:

The COVAX Marketplace

"The COVAX Marketplace aims to accelerate the global production of COVID-19 vaccine doses for COVAX by matching existing suppliers of critical inputs with vaccine manufacturers who urgently need them to produce vaccines for fair and equitable distribution through COVAX

...

"The COVAX Marketplace is a key deliverable of the COVAX Manufacturing Task Force. It aims to respond quickly to immediate market needs and bottlenecks and improve the free flow of critical COVID-19 vaccine supplies by:

– Providing suppliers with a platform to allocate and reallocate unused materials.

– Mobilising idle stock from vaccines and candidates that fail prior to gaining regulatory approval – as well as from those that might scale down their production in the future.

– Mobilising potential surplus stock from manufacturers with non-vaccine activities.

...

"The initial version of the Marketplace will include COVAX vaccine manufacturers and suppliers of the key materials that have been identified as being most urgently needed.

"Participants in the COVAX Marketplace will be able to offer and request any materials required for vaccine production through the Marketplace, but it will initially focus on six categories of supplies that have been identified as critical: bioreactor bags, single use assemblies, cell culture media, filters, lipids, vials, and stoppers.

...

"Matches negotiate and conclude the transaction between themselves, independently of the Marketplace. Pairs notify CEPI on successful closure."

**************

Other posts on supply chains.

Matching Foreign Service officers to positions: the labor market at the State Department

 Many public servants became discouraged during the Trump administration, and those who serve in U.S. Embassies and consulates, and at the State Department in Washington, are no exception.  But the demands of overseas assignments make their internal labor market a matching market with many specific requirements.

Here's a new report:

Retention Issues at the State Department

"In a new report published by the Institute for the Study of Diplomacy, Constanza Castro Zúñiga, Mojib Ghaznawi, and Caroline Kim highlight the retention crisis at the State Department. The Harvard Kennedy School Master in Public Policy (MPP) graduates surveyed 2,853 Foreign Service Officers (FSOs) and Foreign Service Specialists (FSSs) on their experiences at State.

"Their report finds that “31.42% (797) of current officers surveyed are seriously considering leaving the Foreign Service and are actively exploring their options. Of these officers, 31.27% (247) plan to leave in the next year and 56.58% (447) plan to leave in the next five years. This indicates a clear discontent within the Foreign Service that will increase attrition above the Department’s historical averages” (p.11).

"The authors conclude that “FSOs and FSSs feel lost in a workplace that lacks accountability and transparency, to the point where our data suggests a coming exodus on the horizon. While it is impossible to design the perfect system, the Department can strive to create a Foreign Service that feels fair, equitable, and inclusive. However, that can only happen if the Department understands what is driving people away. By surveying over one-fifth of the State Department’s officer corps, we discovered the four biggest drivers that motivate members to leave the Department. By targeting structural and cultural changes to address families, assignments, promotions, and bias, the Department can begin a proactive approach to address retention. However, this will require leadership to listen from the bottom-up and implement from the topdown. If the State Department can begin implementing the recommendations that we have suggested here, it will be on its way to having a Foreign Service that is truly talented and representative” (p. 41).

"Recommendations include extension of Leave Without Pay (LWOP) for Department employees; updated and more flexible remote work policies; a centralized preference matching system to streamline, standardize, and increase transparency in the assignments process; and that the State Department should consider conducting an annual Organizational Climate Survey."

***********

The report itself is here:  https://georgetown.app.box.com/s/vu5gk9qfh6vd0uc6feagqu1u6o7mmawc 

Here's part of the discussion of the matching market: 

"The  current  assignments  process  at  State  is  broken.  Bidders  and  hiring  managers  waste  considerable  time and energy under the current system trying to extract commitments from each other. Rules related to  bidding  prevent  commitments  and  formal  offers  before  imposed  deadlines,  relying  on  informal “handshakes”  of  mutual  interest.  Pressure  on  both  sides  to  secure  desirable  positions  or  candidates  leads to suboptimal outcomes in a process that is growing increasingly non-transparent, stressful, time-consuming, and inequitable.

...

" The Bureau of Global Talent Management’s Office of Career Development and Assignments (GTM/CDA) is collaborating with the National Resident Matching Program (NRMP)58 to design, execute, and evaluate a pilot use of a preference-matching algorithm in bidding and assignments. NRMP will adapt its ranking process to account for CDA bidding rules on eligibility.  NRMP will provide a software platform for collecting rank ordered preferences from bidders, hiring-managers, and bureaus.  CDA  and  NRMP  will  develop  training  and  communication  materials  for  bidders,  hiring  managers, and bureau decision-makers on the use of the algorithm during one or more regular bidding cycles, as well as provide customer support on using NRMP’s proprietary software. Using the collected preferences, NRMP will run the algorithm to produce matches for bureaus to use as the basis for handshake offers for assignments."

Simone Biles in the WSJ. News, sports, ads, endorsements: the money trail is varied and complex:

 Sports, accomplishment, celebrity, endorsements, modeling: The WSJ published last week a long article about Simone Biles, the gymnast who is one of the most dominant athletes in any sport.  It's an article that touches on her past Olympic and other victories, on how she trained during Covid, on her work ethic and ability to concentrate even during the Covid pandemic. It also covers her business ventures and endorsements, and the training facility her family runs.  

The story also addresses darker issues in her family and her sport, including that she was a victim of sex abuse by the now imprisoned USA Gymnastics national team doctor, who was convicted of abusing many young gymnasts.

The article comes with photos, and in many of them she is modeling clothes, which are described by producer and price in the captions, which also refer back to the larger story.  Here is one caption which made me blink as it juxtaposed the story about sex abuse with the price of the clothes she was modeling:

"Biles says that by competing and remaining in the public eye, she is forcing the world to continue to address the Larry Nassar scandal and the many failures that allowed him to prey on gymnasts for years. Kwaidan Editions dress, $990, ssense.com, Mateo earrings, $650, mateonewyork.com, and Completedworks necklace, $240, completedworks.com."

Here's the whole article:

Simone Biles Will Not Be Denied.  "At 24, the most powerful gymnast in history has defied expectations to become even stronger—after surviving abuse, enduring a family ordeal and overcoming her own doubts."    By Louise Radnofsky | Photography by Rahim Fortune for WSJ. Magazine | Styling by Jessica Willis

INFORMS Workshop on Market Design, July 23-24, 2021

 Here's the announcement:

INFORMS Workshop on Market Design 2021.  July 23-24, 2021

"(in conjunction with the ACM EC 2021 conference)

"The 3rd INFORMS workshop on market design is organized by the INFORMS Section on Auctions and Market Design in conjunction with the ACM EC 2021 conference. The workshop brings together researchers and also practitioners designing markets, developing algorithms and theory for multi-object markets with or without money. 

...

"Keynote speakers

• Tommy Andersson, Lund University
• Wedad Elmaghraby, Univ. of Maryland
• Asu Ozdaglar, MIT

Organizers

• Martin Bichler, Technical University of Munich
• Sasa Pekec, Duke University
• Alex Teytelboym, University of Oxford

...

"To attend the workshop, please complete the registration here."

Are incentives for vaccination coercive, exploitative, or otherwise unethical? Persad and Emanuel think not, in JAMA

 Many jurisdictions and venues are now offering incentives for people to be vaccinated against Covid-19.  It will not surprise the readers of this blog to learn that some people have found incentives for vaccination to be repugnant, and perhaps to be immoral and unethical coercion or exploitation.  Here's an article rebutting those concerns, in JAMA

Ethical Considerations of Offering Benefits to COVID-19 Vaccine Recipients  by Govind Persad, JD, PhD1; Ezekiel J. Emanuel, MD, PhD, JAMA. Published online July 1, 2021. doi:10.1001/jama.2021.11045

"Entry into a million-dollar lottery for getting vaccinated against COVID-19 is Ohio’s offer to adults. Teens who get vaccinated receive a lottery ticket for state college tuition, room, board, and more. Other states are offering gift cards. Now many employers are offering rewards for COVID-19 vaccination. Businesses ranging from Krispy Kreme and Sam Adams beer to the Cincinnati Reds have announced discounts or prizes for vaccinated individuals. Are these benefit programs ethical? Are they useful? Are they better than mandates?

...

"The ethical case for instituting vaccine benefit programs is justified by 2 widely recognized values: (1) reducing overall harm from COVID-19 and (2) protecting disadvantaged individuals.1 If benefit programs increase vaccine uptake, they directly protect recipients. By reducing transmission, increased uptake also protects the population, including ineligible children and adults, unvaccinated adults, and individuals with conditions reducing vaccine efficacy (Table). Because transmission has been higher and outcomes worse in less-advantaged communities, stemming transmission especially protects those in disadvantaged communities. In addition, costs, such as time off work for getting a vaccine or dealing with vaccine-related adverse effects, finding daycare for children, and transportation to a vaccine site, hamper access for poorer and marginalized people. Benefit programs, especially in the form of guaranteed cash payments, could improve access and increase uptake by offsetting these costs."

Surrogacy in Israel: now available to same sex couples (and single fathers)

 Here's the story from the Washington Post:

Israel’s high court opens the way for same-sex couples to have children via surrogacy  By Claire Parker

"A decision by Israel’s supreme court Sunday paved the way for same-sex couples to have children through surrogacy, capping a decade-old legal battle in what activist groups hailed as a major advance for LGBTQ rights in Israel.

"Restrictions on surrogacy for same-sex couples and single fathers in Israel must be lifted within six months, the court ruled, giving authorities time to prepare for the change while making clear that it is a definitive one

...

"Surrogacy was already permitted for heterosexual couples and single women. The law excluded same-sex couples, however, and some who couldn’t have kids with surrogate mothers in Israel turned to surrogates overseas.

...

"Israel is considered a leader in the Middle East on LGBTQ rights: The state recognizes same-sex marriages performed abroad, and LGBTQ-identifying individuals serve openly in the military and the parliament. Same-sex couples cannot be married in Israel, however, and ultra-Orthodox communities and politicians remain hostile to LGBTQ rights"

Experiments touching on market design in the July AER

 The July AER has a number of experiments that speak to market design:

 Online,

How to Avoid Black Markets for Appointments with Online Booking Systems  By Rustamdjan Hakimov, C.-Philipp Heller, Dorothea Kübler, and Morimitsu Kurino*

Abstract: Allocating appointment slots is presented as a new application for market design. Online booking systems are commonly used by public authorities to allocate appointments for visa interviews, driver’s licenses, passport renewals, etc. We document that black markets for appointments have developed in many parts of the world. Scalpers book the appointments that are offered for free and sell the slots to appointment seekers. We model the existing first-come-first-served booking system and propose an alternative batch system. The batch system collects applications for slots over a certain time period and then randomly allocates slots to applicants. The theory predicts and lab experiments confirm that scalpers profitably book and sell slots under the current system with sufficiently high demand, but that they are not active in the proposed batch system. We discuss practical issues for the implementation of the batch system and its applicability to other markets with scalping.

***********

In rural Malawi,

Pay Me Later: Savings Constraints and the Demand for Deferred Payments  By Lasse Brune, Eric Chyn, and Jason Kerwin*

Abrstract: We study a simple savings scheme that allows workers to defer receipt of part of their wages for three months at zero interest. The scheme significantly increases savings during the deferral period, leading to higher postdisbursement spending on lumpy goods. Two years later, after two additional rounds of the savings scheme, we find that treated workers have made permanent improvements to their homes. The popularity of the scheme implies a lack of good alternative savings options. The results of a follow-up experiment suggest that demand for the scheme is partly due to its ability to address self-control issues.

************

In Rwanda,

Recruitment, Effort, and Retention Effects of Performance Contracts for Civil Servants: Experimental Evidence from Rwandan Primary Schools  by Clare Leaver, Owen Ozier, Pieter Serneels and Andrew Zeitlin

Abstract: This paper reports on a two-tiered experiment designed to separately identify the selection and effort margins of pay for performance (P4P). At the recruitment stage, teacher labor markets were randomly assigned to a "pay-for-percentile" or fixed-wage contract. Once recruits were placed, an unexpected, incentive-compatible, school-level re-randomization was performed so that some teachers who applied for a fixed-wage contract ended up being paid by P4P, and vice versa. By the second year of the study, the within-year effort effect of P4P was 0.16 standard deviations of pupil learning, with the total effect rising to 0.20 standard deviations after allowing for selection. 

*************

and in India,

On Her Own Account: How Strengthening Women's Financial Control Impacts Labor Supply and Gender Norms  By Erica Field, Rohini Pande, Natalia Rigol, Simone Schaner and Charity Troyer Moore

Abstract: Can increasing control over earnings incentivize a woman to work, and thereby influence norms around gender roles? We randomly varied whether rural Indian women received bank accounts, training in account use, and direct deposit of public sector wages into their own (versus husbands') accounts. Relative to the accounts only group, women who also received direct deposit and training worked more in public and private sector jobs. The private sector result suggests gender norms initially constrained female employment. Three years later, direct deposit and training broadly liberalized women's own work-related norms, and shifted perceptions of community norms. 

The race to transact in high frequency trading by Aquilina, Budish, and O'Neill

 High frequency traders are constantly involved in races to trade on existing bids and asks or to cancel those bids and asks as they become stale.  Here's an NBER working paper that let's us look in on the action.

Quantifying the High-Frequency Trading "Arms Race"  by Matteo Aquilina, Eric Budish & Peter O'Neill  NBER WORKING PAPER 29011 DOI 10.3386/w29011  July 2021

Abstract: "We use stock exchange message data to quantify the negative aspect of high-frequency trading, known as “latency arbitrage.” The key difference between message data and widely-familiar limit order book data is that message data contain attempts to trade or cancel that fail. This allows the researcher to observe both winners and losers in a race, whereas in limit order book data you cannot see the losers, so you cannot directly see the races. We find that latency-arbitrage races are very frequent (about one per minute per symbol for FTSE 100 stocks), extremely fast (the modal race lasts 5-10 millionths of a second), and account for a remarkably large portion of overall trading volume (about 20%). Race participation is concentrated, with the top 6 firms accounting for over 80% of all race wins and losses. The average race is worth just a small amount (about half a price tick), but because of the large volumes the stakes add up. Our main estimates suggest that races constitute roughly one-third of price impact and the effective spread (key microstructure measures of the cost of liquidity), that latency arbitrage imposes a roughly 0.5 basis point tax on trading, that market designs that eliminate latency arbitrage would reduce the market's cost of liquidity by 17%, and that the total sums at stake are on the order of $5 billion per year in global equity markets alone."

From the introduction:

"At the center of the controversy over speed is a phenomenon called “latency arbitrage”, also known as “sniping” or “picking off” stale quotes. In plain English, a latency arbitrage is an arbitrage opportunity that is sufficiently mechanical and obvious that capturing it is primarily a contest in speed. For example, if the price of the S&P 500 futures contract changes by a large-enough amount in Chicago, there is a race around the world to pick off stale quotes in every asset highly correlated to the S&P 500 index: S&P 500 exchange traded funds, other US equity index futures and ETFs, global equity index futures and ETFs, etc. Many other examples arise from other sets of highly correlated assets: treasury bonds of slightly different durations, or in the cash market versus the futures market; options and the underlying stock; ETFs and their largest component stocks; currency triangles; commodities at different delivery dates; etc. Perhaps the simplest example is if the exact same asset trades in many different venues. For example, in the US stock market, there are 16 different exchanges and 50+ alternative trading venues, all trading the same stocks—so if the price of a stock changes by enough on one venue, there is a race to pick off stale quotes on all the others. These races around the world involve microwave links between market centers, trans-oceanic fiber-optic cables, putting trading algorithms onto hardware as opposed to software, co-location rights and proprietary data feeds from exchanges, real estate adjacent to and even on the rooftops of exchanges, and, perhaps most importantly, high-quality human capital. Just a decade ago, the speed race was commonly measured in milliseconds (thousandths of a second); it is now measured in microseconds (millionths) and even nanoseconds (billionths)."

The Power of Market Design, by Paul Milgrom and Silvia Console Battilana in Project Syndicate

 Paul Milgrom and his business partner Silvia Console Battilana describe how market design can reallocate scarce resources from spectrum licenses to water rights.

The Power of Market Design, by Paul Milgrom and Silvia Console Battilana 

"Misallocation of scarce resources too often deprives users of them even as others waste their supply. Well-designed markets can overcome such problems by enabling voluntary transactions that allow existing users to retain their allotments while enabling higher-value uses.

...

"Many of the world’s existing rights to fresh water – both surface water and groundwater – have already been granted and grandfathered in complex ways to cities, farmers, and industrial users. In some cases, each individual trade of these rights requires governmental approval; other jurisdictions prohibit such trading entirely.

"These restrictions and historical rules have led to highly inefficient allocations. Water may be unavailable to towns that require more of it as they grow, even when those urban and residential uses are a hundred times more valuable than the rural ones they would supplant. Certain industrial firms whose rights are based on historical use may have an incentive to overuse water, even during droughts, to retain their rights to future allotments. Where trading of rights is limited or prohibited, poor price signals make it difficult even to assess which uses are most valuable. And water demand will increase and shift as climate change continues to upend historical usage patterns.

"The success of the US radio spectrum auction points to a solution. Instead of revoking incumbents’ spectrum rights unilaterally, Congress redefined them in a way that made trading them possible and simple, and then allowed TV broadcasters to decide for themselves whether to continue their previous uses or decline to participate. The rights that were sold were then reconfigured to be suitable for new uses and efficient trading, while those that were unsold remained fit for existing purposes."

Hugo Sonnenschein (1940-2021)

 A chain of emails originating from U. Chicago brings the news that Hugo Sonnenschein has died.

Along with his many accomplishments as an economic theorist and then as a university administrator, he was a mentor to many, both formally and informally.  

Among the famous economists whose dissertations he supervised (taken from Wikipedia) are  John Roberts, Salvador Barbera, Dilip Abreu, Faruk Gul, Matt Jackson, Vijay Krishna, and Phil Reny.

Here's the list of Hugo's students from the Mathematics Genealogy Project: Abreu, Dilip; Barbera, Salvador; Cho, In-Koo; Dudey, Marc; Fang, Ryan; Fiaccadori, Marco; Gul, Faruk; Krishna, Vijay; Mailath, George; Mardones, Felipe; McLennan, Andrew; Nava, Francesco; Novshek, William; Pearce, David; Reny, Philip; Resende, Jose; Roberts, Donald; Santamaria, Martin; Simon, Leo; Sontheimer, Kevin; Spiegel, Matthew; Vincent, Daniel

The U. Chicago obit is at the link above. Here's Hugo's Wikipedia page that also focuses on his presidency at the University of Chicago. 

Here's Hugo's page at the History of Economic Thought project, which focuses on his contributions to general equilibrium theory and social choice.

Here's his cv.

Before becoming president of U. Chicago, Hugo was Princeton's provost. Some of the changes he instituted at Chicago were controversial among those who feared that they would make Chicago more like Princeton. Here's the Chicago Sun Times on that:

Hugh Sonnenschein, controversial former University of Chicago president, dead at 80.  He drew criticism from students and scholars including Saul Bellow for a university push to expand enrollment and cut the number of required courses to let students take more electives.

 

I first encountered Hugo in his capacity as Editor of Econometrica from 1977-1984.  He was the editor who brought game theory into Econometrica, and so he played a big role in making Economics the principle home of game theory since then.

Hugo Sonnenschein in 2017

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Update: here's a longer, less hurried obit from U. Chicago

Hugo Sonnenschein, 11th president of the University of Chicago, 1940-2021

and here is one from the Barcelona School of Economics:

In memoriam: Hugo Sonnenschein (1940-2021)

Xenotransplantation is still just around the corner. But maybe it won't always be...

 Xenotransplantation, e.g.. transplanting pig kidneys into humans, sometimes seems like it is just around the corner and always will be.  But a recent review in the journal Xenotransplantation suggests that we might see clinical trials in the almost foreseeable future:

Recent progress and remaining hurdles toward clinical xenotransplantation  

by Raphael P.H. Meier, Alban Longchamp, Muhammad Mohiuddin, Oriol Manuel, Georgios Vrakas, Daniel G. Maluf, Leo H. Buhler, Yannick D. Muller, Manuel Pascual

First published: 23 March 2021 https://doi.org/10.1111/xen.12681

"Background: Xenotransplantation has made tremendous progress over the last decade.

...

Results: Life sustaining genetically modified kidney xenografts can now last for approximately 500 days and orthotopic heart xenografts for 200 days in non-human primates. Anti-swine specific antibody screening, preemptive desensitization protocols, complement inhibition and targeted immunosuppression are currently being adapted to xenotransplantation with the hope to achieve better control of antibody-mediated rejection (AMR) and improve xenograft longevity. These newest advances could probably facilitate future clinical trials, a significant step for the medical community, given that dialysis remains difficult for many patients and can have prohibitive costs. Performing a successful pig-to-human clinical kidney xenograft, that could last for more than a year after transplant, seems feasible but it still has significant potential hurdles to overcome. The risk/benefit balance is progressively reaching an acceptable equilibrium for future human recipients, e.g. those with a life expectancy inferior to two years. The ultimate question at this stage would be to determine if a “proof of concept” in humans is desirable, or whether further experimental/pre-clinical advances are still needed to demonstrate longer xenograft survival in non-human primates."

**********

In Greek mythology, a chimera is an animal with a lion's head, a goat's body, and a serpent's tail. In medicine the term has been adopted to mean a person who has cells with two different genetic origins (so twins may come to share some of their twin's cells in the placenta).  Here's the picture from the cover of the journal  in which the above article appears:

 

Increasing living donor liver transplantation: liver exchange and other options

 Here's an early online paper from the journal Liver Transplantation.

Can living donor liver transplant in the United States reach its potential?  by Alyson Kaplan, Russell Rosenblatt, Benjamin Samstein, Robert S. Brown Jr., 

First published: 26 June 2021 https://doi.org/10.1002/lt.26220   

Abstract: Living donor liver transplantation (LDLT) is a vital tool to address the growing organ shortage in the United States caused by increasing numbers of patients diagnosed with end-stage liver disease. LDLT still only makes up a very small proportion of all liver transplants performed each year, but there are many innovations taking place in the field that may increase its acceptance amongst both transplant programs and patients. These innovations include ways to improve access to LDLT, such as through non-directed donation, paired exchange, transplant chains, transplant of ABO-incompatible donors, and transplant in high MELD patients. Surgical innovations, such as laparoscopic donor hepatectomy, robotic hepatectomy and portal flow modulation, are also increasingly being implemented. Policy changes, including decreasing the financial burden associated with LDLT, may make it a more feasible option for a wider range of patients. Lastly, center-level behavior, such as ensuring surgical expertise and providing culturally competent education, will help towards LDLT expansion. While it is challenging to know which of these innovations will take hold, we are already seeing LDLT numbers improve within the last two years.

Workshop on Behavioral Game Theory, University of East Anglia, July 15-16

 Here's the announcement:

"Our annual Workshop on Behavioral Game Theory offers leading researchers the opportunity to present current experimental research related to the topic of game theory: the study of strategic interaction using methods of game theory, experimental economics and psychology.  

"The workshop will last for two days on 15 and 16 July. There will be twenty invited speakers along with three plenary talks (see further information below).  

...

"Speakers:

Daniel Friedman, UC Santa Cruz; Yaroslav Rosokha, Purdue University; Heinrich Nax, University of Zurich; Frank Heinemann, TU Berlin; Friederike Mengel, University of Essex; Andis Sofianos, University of Heidelberg; David Gill, Purdue University; Tridib Sharma, ITAM; Alexander Brown, Texas A&M University; Tatiana Kornienko, University of Edinburgh; Xiaomin Li, Caltech; Emanuel Vespa, University of California, San Diego; Evan Calford, Australian National University; Chiara Aina, University of Zurich; Yuval Heller, Bar-Ilan University; Alistair Wilson, University of Pittsburgh; Andy Brownback, University of Arkansas; Manuel Munoz-Herrera, NYU Abu Dhabi; David J Cooper, Florida State University & University of East Anglia; Filippo Massari, University of East Anglia; 

Plenary Speakers: Cristina Bicchieri, University of Pennsylvania; Yan Chen, University of Michigan; Jörgen Weibull, Stockholm School of Economics

Congestion in transit in supply chains: pipeline inventory

 The recovery from the pandemic is revealing as many supply issues as the pandemic itself did. Here's an article in Forbes about congestion in transportation

How Traffic Congestion In Chicago Is Backing Things Up In Los Angeles: Pipeline Inventory Is Now A Big Logistics Problem  by Willy Shih 

"As retailers try to bring a surge of imports into their distribution centers, they are exceeding the capacity of logistics providers to move them through choked hubs like the Union Pacific Global 4 intermodal terminal in Joliet, Illinois outside of Chicago. A shortage of truck chassis means its difficult to get containers out of the terminal to warehouses, that in turn leads to congestion that makes it is difficult to unload trains. According to a recent discussion hosted by the Journal of Commerce on top importers, that means the traffic has backed up to the marine terminals in Los Angeles and Long Beach, and to a lesser extent Seattle/Tacoma. That’s why now would be a good time to understand what we mean by pipeline inventory.

...

"All those containers stuck at UP Global 4 are pipeline inventory for somebody, and rail congestion out of West Coast ports means pipeline inventory is building up there (and remember it’s on trucks and trains as well). The Port of Los Angeles Signal report for last week projects import volumes up 54.9% this week and 71.6% next week, with big jumps in on-dock and off-dock rail containers. So that furniture or freezer you are waiting for might be sitting in a container stack in a yard somewhere.

...

"The key question is will those goods stuck in pipeline inventory make it to the consumer while the demand is still there? The recent precipitous collapse in lumber prices suggests that as Americans shift towards a more normal consumption pattern, we might end up with a lot more of some goods than retailers planned. Neglect of pipeline inventory, or increased ordering to make up for the pipeline lag, is one of the major causes of the bullwhip effect in supply chains. Sophisticated retailers like Walmart or Target are probably always on top of how much inventory they have in the pipeline, but the challenge is will the demand still be there when those goods finally arrive? For fashion retailers, this could be “Hello, TJX” as they end up looking for help to liquidate excess inventory."

College admissions: Oxford and Cambridge

 The Financial Times has the story:

How Britain’s private schools lost their grip on Oxbridge. As state-school admissions rise at elite universities, some parents who shelled out for private education regret it.  by Brooke Masters

Vouchers in kidney exchange chains: a report of initial experience at NKR

 Here's a report of the experience with kidney vouchers, pioneered at UCLA and the National Kidney Registry. That's a policy that has now spread more widely, in the U.S.  This paper reports data from the NKR for 2014 through January 2021, during which time 250 donors were given vouchers, 6 of which have so far been redeemed. Voucher donors start kidney exchange chains (like non-directed donors) that can later be redeemed by (e.g.) their family members.

Voucher-Based Kidney Donation and Redemption for Future Transplant, by Jeffrey L. Veale, MD1; Nima Nassiri, MD2; Alexander M. Capron, JD2,3; Gabriel M. Danovitch, MD1; H. Albin Gritsch, MD1; Matthew Cooper, MD4,5; Robert R. Redfield, MD6; Peter T. Kennealey, MD7; Sandip Kapur, MD8

JAMA Surg. Published online June 23, 2021. doi:10.1001/jamasurg.2021.2375

"Abstract:

Importance  Policy makers, transplant professionals, and patient organizations agree that there is a need to increase the number of kidney transplants by facilitating living donation. Vouchers for future transplant provide a means of overcoming the chronological incompatibility that occurs when the ideal time for living donation differs from the time at which the intended recipient actually needs a transplant. However, uncertainty remains regarding the actual change in the number of living kidney donors associated with voucher programs and the capability of voucher redemptions to produce timely transplants.

...

Design, Setting, and Participants  This multicenter cohort study of 79 transplant centers across the US used data from the National Kidney Registry from January 1, 2014, to January 31, 2021, to identify all family vouchers and patterns in downstream kidney-paired donations. The analysis included living kidney donors and recipients participating in the National Kidney Registry family voucher program.

Exposures  A voucher was provided to the intended recipient at the time of donation. Vouchers had no cash value and could not be sold, bartered, or transferred to another person. When a voucher was redeemed, a living donation chain was used to return a kidney to the voucher holder.

Main Outcomes and Measures  Deidentified demographic and clinical data from each kidney donation were evaluated, including the downstream patterns in kidney-paired donation. Voucher redemptions were separately evaluated and analyzed.

Results  Between 2014 and 2021, 250 family voucher–based donations were facilitated. Each donation precipitated a transplant chain with a mean (SD) length of 2.3 (1.6) downstream kidney transplants, facilitating 573 total transplants. Of those, 111 transplants (19.4%) were performed in highly sensitized recipients. Among 250 voucher donors, the median age was 46 years (range, 19-78 years), and 157 donors (62.8%) were female, 241 (96.4%) were White, and 104 (41.6%) had blood type O. Over a 7-year period, the waiting time for those in the National Kidney Registry exchange pool decreased by more than 3 months. Six vouchers were redeemed, and 3 of those redemptions were among individuals with blood type O. The time from voucher redemption to kidney transplant ranged from 36 to 155 days.

Conclusions and Relevance  In this study, the family voucher program appeared to mitigate a major disincentive to living kidney donation, namely the reluctance to donate a kidney in the present that could be redeemed in the future if needed. The program facilitated kidney donations that may not otherwise have occurred. All 6 of the redeemed vouchers produced timely kidney transplants, indicating the capability of the voucher program."

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I haven't managed to sign a data use agreement with NKR, because Stanford's policies don't allow researchers to cede editorial control of the final paper to the data owners, which NKR's agreement requires.  See earlier post:

Thursday, March 18, 2021

Data use agreements, and university research policies regarding restrictions on publication

Fishery regulation involves onboard observers at sea--a very dangerous job

 Next time you eat a salt water fish, spare a thought for how fisheries are regulated to keep them viable as a common pool resource.  There are catch limits, whose enforcement requires deep sea fishing boats to have onboard inspectors, called observers.  Apparently that's a dangerous job.

The Guardian has the story:

Death at sea: the fisheries inspectors who never came home.  by Bernadette Carreon 

"Being an observer, which involves monitoring fishing practices and catches to make sure boats follow the rules, is a dangerous job that can put observers in conflict with the crews on the vessels on which they are working, often hundreds, or even thousands, of kilometres from the nearest port.

"According to the Association of Professional Observers, there have been over a dozen cases of observers dying on the job since 2009 alone, including three involving Kiribati nationals."

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The Association of Professional Observers maintains a site that includes a page on Observer Deaths and Disappearances, as well as one on Harassment of observers, for example in ways that may compromise their data. 

Kidney exchange, arranged the old fashioned way

 Before the modern organization of kidney exchange developed in the early years of this century, using databases and algorithms, and connecting potentially widely dispersed patients and donors, a literal handful of kidney exchanges were arranged by hand and happenstance.  Alongside the thousands of exchanges that now happen, happenstance can still happen too. Here's a recent story from the Washington Post:

Two women chatted in a bathroom. They soon realized they were each a match for the other’s husband, who needed a kidney.  By Cathy Free

"Antibody tests revealed that each woman was an excellent match for the other’s spouse.

"So in March, seven months after that chance conversation, Wimbush donated one of her kidneys to Lance Ellis, 41, and Susan Ellis donated one of hers to Rodney Wimbush, 45."

School choice in Austria, by Greiner and Zednik in Die Presse

 Parents have big strategy sets (and can change the address at which a child is registered) to game the school choice system.

In Die Presse (with the help of Google Translate):

Schulplatzallokation und strategisches Eltern-Verhalten, von Ben Greiner und Anita Zednik

[Allocation of school places and strategic parenting behavior by Ben Greiner and Anita Zednik]

"In Austria, economists have not yet often been involved in the design of allocation mechanisms. But here, too, there are many allocation problems that have room for improvement. One problem is the allocation of school places, both in primary and secondary schools. As a rule, only one school can be named as a preference, and many parents are uncertain whether their child has a good enough chance of being accepted at the most preferred school. As a result, parents often choose a safer school near where they live instead of enrolling their child in their favorite school. However, this uncertainty also leads to dishonest strategic behavior on the part of parents. Some parents change their child's address before registering for school, to secure higher chances of getting a place at your favorite school.

...

"Dr. Anita Zednik from the Vienna University of Economics and Business presented a study based on Viennese registration data that empirically documents such strategic behavior on the part of parents. Dr. Zednik analyzes the anonymized registration data of more than 300,000 Viennese children between September 2016 and August 2020 and identifies “moving back and forth”, i.e. cases in which a child registered at a different address in Vienna before registering and then returned to the original address after registering

...

"This strategic behavior also leads to more inequality in the distribution of school places. For children with a migration background and from households in which their parents do not have a university degree, proportionally significantly fewer moves back and forth are observed than for children with Austrian citizenship and from households with higher educational qualifications. The data show that it is time to take a closer look at the Austrian mechanisms for allocating school places. "

An interview in (not on) Clinical Orthopaedics and Related Research, largely about resident matching

 For those  readers of this blog who may have missed the May issue of Clinical Orthopaedics and Related Research, here's an interview by the editor

A Conversation with ... Alvin E. Roth PhD, Economist, Game Theorist, and Nobel Laureate Who Improved the Modern Residency Match  by Leopold, Seth S. MD, Clinical Orthopaedics and Related Research, Volume 479(5), May 2021, p 863-866   doi: 10.1097/CORR.0000000000001758

The interview includes this long answer to a short question about the resident Match:

Seth S. Leopold MD: Many readers will dispute the idea that the Match is resistant to strategic manipulation (“gaming the system”); why do you believe it is, and why do you think this perception persists?

Alvin E. Roth PhD: That question requires a somewhat complicated answer. The Match is built around an idea of how to organize a simple labor market, and that idea had to be adapted to the complex structure of the modern medical labor force. A simple labor market would be one in which graduating medical students each seek a single position, positions are well described in advance, and applicants and residency programs can each rank-order all of their possible matches; that is, applicants can rank programs and programs can rank applicants. That simple market can be modeled mathematically, and it can be shown that a deferred acceptance algorithm with applicants proposing makes it a dominant strategy for all applicants to submit rank-order lists corresponding to their true preferences. (A dominant strategy is one in which regardless of what rank-order lists others submit, no applicant can do better than to rank residency programs in order of his or her true preferences. For instance, your chance of getting your second-choice program if your first choice rejects you is exactly the same as if you had listed your second choice first.)

"That’s a theoretical answer about a market that is quite a bit simpler than the modern market for residencies. The deferred acceptance algorithm for that simple market was studied by Gale and Shapley [8], for which Shapley shared the 2012 Nobel Prize in Economics. (I had earlier shown that in a simple market, applicants can’t profitably manipulate their rank-order lists [16].)

"The actual modern market for residencies differs from that simple market in several ways. For one thing, not all applicants are seeking a single position. This can happen for several reasons, the most important of which is that couples can enter the Match looking for pairs of jobs; in 2020, for example, more than one thousand couples submitted rank-order lists consisting of pairs of jobs. There are also many more residency programs than an applicant can submit on a rank-order list, and many more applicants than programs can interview, so decisions have to be made beforehand that are more complicated than how to order the rank-order list. These complications may also add to confusion about the Match and about how the Match algorithm works.

"Computational studies of the Match nevertheless confirm that once interviews are over and an applicant has decided what programs to apply to, it is perfectly safe to submit a rank-order list that corresponds to the applicant’s true preferences [18]. To put it another way, there is no advantage to submitting a rank-order list that differs from an applicant’s preferences (and there is a danger in submitting a different rank-order list, because the Match will use the submitted list to make matches, in order).

"This fact doesn’t seem to have yet penetrated to everyone who participates in the Match [13]. For this reason, all those who advise medical students entering the Match should increase their advising efforts around this point.

"Note that the Match is only the final part of the transition to residency (or to fellowships). That transition starts with applications and interviews and includes various kinds of signals, like exam scores and transcripts and letters of reference. While the dominant-strategy property of the Match makes that part of the process strategically simple (that is, we can confidently advise students to submit rank-order lists in order of their true preferences), the other parts of the process (what rotations to take before applying, where to apply, how to conduct yourself at interviews) are not simple at all."

NRMP Position Statement On The (In)Feasibility Of An Early Match

 There has been some suggestion that dividing the resident match into early and late matches might be a way to address the congestion in applications and interviews that has bedeviled the transition from medical school to residency in recent years.  The NRMP now has a statement pointing out that there are serious problems with that idea.

NRMP Position Statement On The Feasibility Of An Early Match

"For the past eighteen months the National Resident Matching Program® (NRMP®) has been working closely with other national medical education organizations to examine the current state of the transition to residency. Conversations have focused on mitigating burdens for both applicants and programs in the selection and recruitment process and addressing uncertainty in the future of the interview cycle.

...

"Among the proposed solutions to current challenges in the transition to residency are calls for an early match. Specifically, NRMP has been asked to implement the Early Result and Acceptance Program (ERAP) pilot program proposed for Obstetrics and Gynecology, created through American Medical Association’s Reimagining Residency Grant, “Transforming the UME to GME Transition: Right Resident, Right Program, Ready Day One”. The stated goals of the ERAP pilot are to allow applicants to engage in strategic decision-making, reduce burden on programs while hypothesizing that the change will result in holistic review, and reduce necessary applications and interviews. ERAP calls for an early match to begin in September 2022 for the 2023 Match cycle. ERAP permits applicants to apply to a maximum of three programs in the early match with programs including up to 50% of their positions if they choose to participate. This statement outlines NRMP’s concerns about the structure of the ERAP pilot program, the lack of evidence supporting the proposed changes to the Match, the implications of an early match for the matching process, and preliminary findings of modeling an early match being conducted by experts in market design and the matching algorithm.

"The NRMP has reviewed the ERAP pilot program with consideration for whether changes to the matching process have the potential to inadvertently disadvantage Match participants. It is through that lens NRMP remains concerned with the following aspects of the ERAP pilot:

"Although voluntary, applicants may feel pressured to participate in an early match where up to half the available positions in a specialty may fill before the Main Residency Match® opens.

"There exists no mechanism for demonstrating how an early match will make visible less competitive applicants and those underrepresented in medicine, which is hypothesized in the project document.

"The proposed limit of three applications per applicant could force applicants to make compromises not present in the Match today. ...While the ERAP investigation team hypothesized that the application limit will increase holistic review by programs, there are no mandates to ensure that programs conduct holistic review nor are there restrictions on the number of applications programs may accept, interviews they may offer, or applicants they may rank. With no objective evidence to support the hypothesis, we cannot conclude that the proposed application limit would increase holistic review of applications.

"There exists no mechanism for safeguarding an applicant’s failure to match in the early match from programs as they enter the Main Residency Match, which could result in the applicant being viewed as less competitive.

"In addition to concerns about disadvantaging applicants, NRMP is mindful of possible behavior changes resulting from changes to the Match process that could affect Match outcomes for all Match participants.

• "The structure of an early match does not allow for mixed-specialty couples ranking or multispecialty individual ranking, which may cause applicants to reconsider their specialty choices, fundamentally changing their career path.
• "Programs may have insufficient information (e.g., clinical evaluations, MSPE, LORs) to evaluate applicants fully and fairly in the early match.
• Programs may see a surge in non-traditional applicants as the early match provides three opportunities to enter training through either the early match, the Main Residency Match, or SOAP®. This may result in an increased number of applications or applicants who may otherwise not select the specialty.
• Not matching in the early match is likely to increase the number of applications per individual in the Main Residency Match, as applicants enter a matching cycle with only half of the positions remaining available. This may increase stress, cost, and could adversely affect the wellness of applicants.

...

"it is important to first outline the core concepts of the match as a stable “market”. The Match was established in 1952, to solve a “congestion” problem in medical residencies involving applications, offers, and acceptances. In a May 2021 pre-submission working paper, Itai Ashlagi, Ph.D. and Alvin Roth, Ph.D. describe the consequences of congestion as “unraveling” where programs initially responded to congestion by making “exploding offers” that prevented applicants from considering many programs because they were pressed to accept an early offer, before knowing whether an offer from a more preferred program might be forthcoming if they waited. The authors note that NRMP’s matching process, in its current form, has four distinct properties that are relevant to managing the problems of congestion and unraveling and maintaining a stable matching market. Specifically, the NRMP matching process

"1. Is Uncongested: participants make all decisions (on Rank Order Lists) in advance, so there is no delay in processing offers, rejections, and acceptances, which is done by the computerized Roth-Peranson algorithm.

"2. Defers acceptances: preferences of applicants and programs are not finalized until all preferences have been considered, thereby producing stable matching: i.e., matching in which there are no “blocking pairs” of applicants and programs not matched to one another but who both would prefer to be.

"3. Promotes true preferences: it is safe for participants to state their true preferences when they submit their Rank Order Lists (ROLs).

"4. Establishes a “thick” market: most residency programs in most specialties participate in the NRMP Match, which also allows for multi-specialty applications and couple matching (including for mixed-specialty couples).

"The authors opine that an early match such as the proposed ERAP pilot followed by the Main Residency Match would not share three of the four important properties of the Match:

"1. An early match would dilute the thick market: not all positions would be available at the same time (and further, it would not allow applicants to express multi-specialty preferences, nor would it accommodate mixed-specialty couples).

"2. early match would introduce complicated strategic decisions into the formulation of ROLs: it would no longer be safe for participants to submit ROLs straightforwardly corresponding to their preferences.

"3. An early match would not produce a stable matching: there would be mutually disappointed blocking pairs of mismatched applicants and programs. This would also make it less safe to report ROLs that straightforwardly corresponded to preferences."