Ernan Haruvy and Yu Wang explore some market design issues that arise in vacation house exchange, theoretically and experimentally, in their paper Tiers in Consumer Fractional Ownership Markets. Their idea is that unless the market maker restricts the trading rights of owners of undesirable properties, the market may eventually suffer from a form of unraveling in which people buy inexpensive properties in an attempt to gain access to more expensive properties.
Here's the abstract:
"In consumer fractional ownership markets such as timesharing in vacation homes and sharing programs for luxury products, consumers purchase a share in a property and can later exchange its usage right with other owners through secondary matching markets. In such programs, consumers may attempt to game the system by purchasing inexpensive low quality shares and trading up afterwards. Such behavior may cause the collapse of the primary sales market. We investigate a tiered structure that restricts trading up. The analysis focuses on two commonly used matching mechanisms in the marketplace – Deposit First and Request First mechanisms. In laboratory experiments we find that when the matching market does not have a tiered structure, the Request First mechanism performs significantly worse than the Deposit First mechanism, whereas the tiered matching structure performs equally well under both mechanisms. Consistent with the theory, tiered matching that restricts upgrading is shown to simultaneously restore primary sales and facilitate exchanges among owners. A change in market structure requires some adjustment, but over time participants learn to adopt theoretically optimal strategies. Entry into matching markets is below theoretical predictions and this is shown to be partly due to risk aversion."
They describe the underlying marketplace institutions:
"In this industry, households purchase timeshare properties and can then exchange their usage rights in a one-to-one matching market. Some of the matching markets are run by property developers themselves (e.g., Timbers Resorts). One can think of these companies as vertically-integrated players in both the primary sales market and the secondary matching market. Some other matching markets are operated by third-party match-making companies such as Resort Condominium International. These match-making firms do not build resort properties but create platforms for property owners to make exchanges. With either type of market maker (vertically-integrated property developers or third-party match-making companies), to make exchanges timeshare owners typically search in a depository of properties called a space bank. The space bank can be seen as a match-making firm’s inventory of properties. Owners can “deposit” their property into the space bank and “withdraw” a different property from it. Thus, the space bank is the key feature of the one-sided matching market under investigation, as it serves the important purpose of facilitating exchanges among the owners."
...
"Two matching mechanisms have been widely adopted in the timeshare matching market (Wang and Krishna 2006): the Deposit First (DF) mechanism and the Request First (RF) mechanism. To initiate an exchange in a DF market, households must first deposit their own properties into the space bank. In other words, the household cannot inspect the space bank until it has given up the usage right of its own property. Thus, successful withdrawal is not guaranteed by the company, as one may end up with a worse property than her original one. In fact, one of the main complaints about the DF mechanism is the risk of becoming worse-off (ex post) as a result of exchanges. On the other hand, in an RF market households deposit their own properties only after they have withdrawn a preferred property from the space bank. If there is no good alternative in the space bank, households can choose to keep their original properties."
They also consider the connection to kidney exchange...
Showing posts with label entrepreneurial market design. Show all posts
Showing posts with label entrepreneurial market design. Show all posts
Friday, December 10, 2010
Tuesday, November 30, 2010
More on economists at hi tech firms
John Horton (who is interested in online labor markets) writes in response to my post about economists at Amazon to let me know about this recent story in the San Jose Mercury News:
Google, Yahoo, other Silicon Valley tech giants add economists to arsenal
"In the wake of the example of UC Berkeley economist Hal Varian, who helped Google perfect the auction process behind its multibillion-dollar search advertising revenue stream, big Internet companies are competing to woo economists away from universities or work with them on specific projects. Yahoo has been among the most aggressive, but eBay, Amazon.com, Facebook and other companies also are recruiting practitioners of what used to be called "the dismal science." Illustrating how crucial companies think those skills are, Microsoft CEO Steve Ballmer personally recruited economist Susan Athey from Harvard.
"Other companies have recognized that economists really have a lot to contribute," said Varian, who joined Mountain View-based Google full time in 2007 after having worked as a consultant for the search giant since 2002. Google has 10 economists, statisticians and other quantitative analysts on Varian's staff, and is looking to hire more.
"Internet companies see the economists as critical in their efforts to fine-tune advertising networks that serve millions of online ad impressions a day, and to better understand e-commerce platforms with tens of millions of buyers and sellers. Economists can also help determine whether new businesses or approaches will be effective."
...
"Yahoo chief economist Preston McAfee, who joined the Sunnyvale company from the California Institute of Technology in 2007, has long believed that economics could be a practical discipline, like engineering. McAfee now heads a team of seven Ph.D. economists and five game-theory/algorithmic scientists who work with software engineers to create products that aren't just smart but are also savvy.
"Engineers are pretty nice people, and they assume the rest of the world is pretty nice like them," said McAfee. "But that's not the way most people are. And if you build (software) assuming that's the way people are, it will get heavily spammed. So one of the roles that economics plays at Yahoo and other tech companies is to be just a little more suspicious about human nature."
...
"One of Varian's first jobs was to polish Google's nascent search advertising, in which advertisers bid for keywords that bring up their text ad when someone Googles that term. Search advertising has since transformed Google into a corporate colossus.
"Eric Schmidt said, 'Take a look at this ad auction,' " said Varian, "and I sat down to try to model the behavior of that auction, and wrote the first model ever of what I call a position auction.
"At that time, I talked to my fellow economists and said, 'You know, there really are some interesting things going on here,' and they would say, 'Is that economics?' And now, of course, years later, people say, 'Wow, how did you know that was going to be so big?' And the answer is, I didn't. I just thought it was really interesting and it turned out to be big."
Google, Yahoo, other Silicon Valley tech giants add economists to arsenal
"In the wake of the example of UC Berkeley economist Hal Varian, who helped Google perfect the auction process behind its multibillion-dollar search advertising revenue stream, big Internet companies are competing to woo economists away from universities or work with them on specific projects. Yahoo has been among the most aggressive, but eBay, Amazon.com, Facebook and other companies also are recruiting practitioners of what used to be called "the dismal science." Illustrating how crucial companies think those skills are, Microsoft CEO Steve Ballmer personally recruited economist Susan Athey from Harvard.
"Other companies have recognized that economists really have a lot to contribute," said Varian, who joined Mountain View-based Google full time in 2007 after having worked as a consultant for the search giant since 2002. Google has 10 economists, statisticians and other quantitative analysts on Varian's staff, and is looking to hire more.
"Internet companies see the economists as critical in their efforts to fine-tune advertising networks that serve millions of online ad impressions a day, and to better understand e-commerce platforms with tens of millions of buyers and sellers. Economists can also help determine whether new businesses or approaches will be effective."
...
"Yahoo chief economist Preston McAfee, who joined the Sunnyvale company from the California Institute of Technology in 2007, has long believed that economics could be a practical discipline, like engineering. McAfee now heads a team of seven Ph.D. economists and five game-theory/algorithmic scientists who work with software engineers to create products that aren't just smart but are also savvy.
"Engineers are pretty nice people, and they assume the rest of the world is pretty nice like them," said McAfee. "But that's not the way most people are. And if you build (software) assuming that's the way people are, it will get heavily spammed. So one of the roles that economics plays at Yahoo and other tech companies is to be just a little more suspicious about human nature."
...
"One of Varian's first jobs was to polish Google's nascent search advertising, in which advertisers bid for keywords that bring up their text ad when someone Googles that term. Search advertising has since transformed Google into a corporate colossus.
"Eric Schmidt said, 'Take a look at this ad auction,' " said Varian, "and I sat down to try to model the behavior of that auction, and wrote the first model ever of what I call a position auction.
"At that time, I talked to my fellow economists and said, 'You know, there really are some interesting things going on here,' and they would say, 'Is that economics?' And now, of course, years later, people say, 'Wow, how did you know that was going to be so big?' And the answer is, I didn't. I just thought it was really interesting and it turned out to be big."
Monday, November 29, 2010
Market design at Amazon
The following job market ad at Econ-jobs.com for a new economist at Amazon caught my eye, both for what it suggests about the kind of internal research Amazon hopes to do, and about what kind of economists they hope to hire:
"Economists at Amazon will be expected to work directly with chief economist Patrick Bajari and senior management on key business problems faced in retail, international retail, cloud computing, third party merchants, search, Kindle and operations. Amazon economists will apply the frontier of economic thinking to market design, pricing, forecasting, online advertising and other areas. You apply econometric modeling, working with our world class data systems, and economic theory to business problems. In addition, economists at Amazon will be expected to maintain an independent and active research agenda, publishing in leading academic journals."
"Basic Qualifications: PhD in Economics or anticipating completion of a PhD in Economics by Aug 2011
"Preferred Qualifications:
Strong background in econometrics, industrial organization, economic theory and quantitative methods
Ability to work in a fast paced business environment
Strong research track record
Effective verbal and written communication skills
Most companies don't hire researchers who publish. Companies that do often are aiming at people who already have academic jobs, and want to keep the possibility open of returning to academia, and in that case the ability to publish (permission to use company data plus time to write papers) is a perk aimed at attracting the right kind of people.
I don't know how much success Amazon has had in the past at hiring economists with active research agendas, but now that they've hired Bajari they clearly have some prospects, particularly if they will be open to having their economists publish about some of the very interesting design problems that Amazon faces, as a marketplace for goods, for merchants, and for computing services.
Amazon likely has particularly good data--they seem to be able to keep track of the same commodity sold by their various different vendors. And each of their three big marketplaces offers the possibility for conducting very interesting experiments.
So...maybe Amazon will start being a source of new research in market design. We'll have to wait and see.
And incidentally, does anyone remember when only banks had a post called Chief Economist? That title is now a tech title too (e.g. Hal Varian at Google and Susan Athey at Microsoft.) Together with the employment of microeconomists under other job titles (e.g. Preston McAfee, David Reiley and Michael Schwarz at Yahoo!, and Paul Milgrom in various entrepreneurial ventures over the years), it's a sign that market design and experiments and related ideas are coming of age.
"Economists at Amazon will be expected to work directly with chief economist Patrick Bajari and senior management on key business problems faced in retail, international retail, cloud computing, third party merchants, search, Kindle and operations. Amazon economists will apply the frontier of economic thinking to market design, pricing, forecasting, online advertising and other areas. You apply econometric modeling, working with our world class data systems, and economic theory to business problems. In addition, economists at Amazon will be expected to maintain an independent and active research agenda, publishing in leading academic journals."
"Basic Qualifications: PhD in Economics or anticipating completion of a PhD in Economics by Aug 2011
"Preferred Qualifications:
Strong background in econometrics, industrial organization, economic theory and quantitative methods
Ability to work in a fast paced business environment
Strong research track record
Effective verbal and written communication skills
Most companies don't hire researchers who publish. Companies that do often are aiming at people who already have academic jobs, and want to keep the possibility open of returning to academia, and in that case the ability to publish (permission to use company data plus time to write papers) is a perk aimed at attracting the right kind of people.
I don't know how much success Amazon has had in the past at hiring economists with active research agendas, but now that they've hired Bajari they clearly have some prospects, particularly if they will be open to having their economists publish about some of the very interesting design problems that Amazon faces, as a marketplace for goods, for merchants, and for computing services.
Amazon likely has particularly good data--they seem to be able to keep track of the same commodity sold by their various different vendors. And each of their three big marketplaces offers the possibility for conducting very interesting experiments.
So...maybe Amazon will start being a source of new research in market design. We'll have to wait and see.
And incidentally, does anyone remember when only banks had a post called Chief Economist? That title is now a tech title too (e.g. Hal Varian at Google and Susan Athey at Microsoft.) Together with the employment of microeconomists under other job titles (e.g. Preston McAfee, David Reiley and Michael Schwarz at Yahoo!, and Paul Milgrom in various entrepreneurial ventures over the years), it's a sign that market design and experiments and related ideas are coming of age.
Monday, November 22, 2010
Entrepreneurial market design in old New York
My colleague Ed Glaeser has penned an economist's love letter to New York City that focuses on its entrepreneurial history: Start-Up City: Entrepreneurs are the heroes of New York’s past and the key to its future.
You should read the whole thing, but here's a part that caught my eye as focusing particularly on an entrepreneurial act of market design.
"Entrepreneurs have played a key role in every stage of New York’s development. During the early nineteenth century, when waterways were the lifelines of commerce, New York owed its expanding sea trade partly to natural advantages: a safe, centrally located harbor and a deep river that cut far into the American hinterland. But those advantages became important because of the vision and energy of entrepreneurs like Jeremiah Thompson, the gambling Quaker. Thompson immigrated to New York at 17 to work in the American branch of his family’s wool business. By the 1820s, he had established himself as America’s largest importer of English clothing, its largest exporter of raw cotton, and its third-largest issuer of bills of exchange.
"As a global trader, Thompson was acutely aware of the shortcomings of the transatlantic ships of the time, which would stay in port until their hulls were filled with goods. (Imagine showing up at LaGuardia and having to sit around until the airline sold enough tickets to fill the entire flight to Frankfurt.) Thompson saw an opening and created the Black Ball packet line, whose ships set sail on a scheduled day every month, no matter how light their cargoes were. His innovation was a gamble, since sometimes his ships sailed with relatively empty hulls, which meant less income from the merchants who bought the space. But a virtuous circle developed: fixed schedules attracted more cargo, and more cargo made ships sailing on fixed schedules more profitable. Once Thompson was turning a profit, other packet lines, like the Yellow Ball and Swallowtail lines, entered the market. An 1827 letter to the New England Palladium described the significance of Thompson’s invention: “I consider Commerce by lines of ships, on fixed days, an invention of the age nearly as important as Steam Navigation and in its results as beneficial to New York, which has chiefly adopted it, as the Grand [Erie] Canal.”
"Thanks to such innovation, the city grew great during the first half of the nineteenth century, its population rising from 33,000 in 1790 to 814,000 on the eve of the Civil War. In 1821, New York’s exports, measured in dollars, were less than 10 percent higher than Boston’s. By 1860, New York was exporting over 700 percent more than the city on the Charles."
You should read the whole thing, but here's a part that caught my eye as focusing particularly on an entrepreneurial act of market design.
"Entrepreneurs have played a key role in every stage of New York’s development. During the early nineteenth century, when waterways were the lifelines of commerce, New York owed its expanding sea trade partly to natural advantages: a safe, centrally located harbor and a deep river that cut far into the American hinterland. But those advantages became important because of the vision and energy of entrepreneurs like Jeremiah Thompson, the gambling Quaker. Thompson immigrated to New York at 17 to work in the American branch of his family’s wool business. By the 1820s, he had established himself as America’s largest importer of English clothing, its largest exporter of raw cotton, and its third-largest issuer of bills of exchange.
"As a global trader, Thompson was acutely aware of the shortcomings of the transatlantic ships of the time, which would stay in port until their hulls were filled with goods. (Imagine showing up at LaGuardia and having to sit around until the airline sold enough tickets to fill the entire flight to Frankfurt.) Thompson saw an opening and created the Black Ball packet line, whose ships set sail on a scheduled day every month, no matter how light their cargoes were. His innovation was a gamble, since sometimes his ships sailed with relatively empty hulls, which meant less income from the merchants who bought the space. But a virtuous circle developed: fixed schedules attracted more cargo, and more cargo made ships sailing on fixed schedules more profitable. Once Thompson was turning a profit, other packet lines, like the Yellow Ball and Swallowtail lines, entered the market. An 1827 letter to the New England Palladium described the significance of Thompson’s invention: “I consider Commerce by lines of ships, on fixed days, an invention of the age nearly as important as Steam Navigation and in its results as beneficial to New York, which has chiefly adopted it, as the Grand [Erie] Canal.”
"Thanks to such innovation, the city grew great during the first half of the nineteenth century, its population rising from 33,000 in 1790 to 814,000 on the eve of the Civil War. In 1821, New York’s exports, measured in dollars, were less than 10 percent higher than Boston’s. By 1860, New York was exporting over 700 percent more than the city on the Charles."
Monday, November 1, 2010
Class notes for sale?
NoteUtopia seeks to become a marketplace for class notes taken by students; it offers to buy your class notes, or sell you someone else's. Not everyone thinks this is a great idea: they have been told to cease and desist.
"NoteUtopia, a startup company for college students founded by a young Sacramento State graduate, has been ordered to "cease and desist" by the CSU chancellor's office, which said the company is violating state education codes that prohibit students from selling their class notes.
...
"The 10-year-old law that prompted the ban is so obscure that it caught NoteUtopia's founder, campus officials and Internet law experts by surprise.
"Eric Goldman,director of the High-Tech Law Institute at Santa Clara University Law School and a professor of Internet law, said "many people had no idea it's on the books."
"But while the law may be a sleeper, the issue of what students can do with material taken from class lectures "comes up with some regularity," Goldman noted. It's at the heart of an academic and legal debate on intellectual property rights involving how classroom content is shared among students."
The editorial page editors at the Harvard Crimson approve of the ban on selling notes:
"NoteUtopia, a startup company for college students founded by a young Sacramento State graduate, has been ordered to "cease and desist" by the CSU chancellor's office, which said the company is violating state education codes that prohibit students from selling their class notes.
...
"The 10-year-old law that prompted the ban is so obscure that it caught NoteUtopia's founder, campus officials and Internet law experts by surprise.
"Eric Goldman,director of the High-Tech Law Institute at Santa Clara University Law School and a professor of Internet law, said "many people had no idea it's on the books."
"But while the law may be a sleeper, the issue of what students can do with material taken from class lectures "comes up with some regularity," Goldman noted. It's at the heart of an academic and legal debate on intellectual property rights involving how classroom content is shared among students."
The editorial page editors at the Harvard Crimson approve of the ban on selling notes:
Not For Sale Universities alone should decide when to distribute lecture material By THE CRIMSON STAFF
"Recently, California State University prohibited students from buying and selling lecture notes online in light of NoteUtopia, a new website created for this purpose. Their decision is the correct one. The practice of trading class notes does not reflect the purpose of education and should be discouraged. Although proponents of this activity claim that the ban violates free speech, they should acknowledge it is entirely within an institution’s remit to control the distribution of lecture material as it sees fit."
Sunday, October 17, 2010
Now you can buy copies of successful college applications
The Chronicle of Higher Education reports on a new business venture aimed at applicants to selective colleges. For Sale: Successful Ivy League Applications—Only $19.99 By Eric Hoover
"The path to the nation’s most selective colleges is crowded with entrepreneurs—independent consultants, test-preparation companies, and publishers of a zillion guides. They peddle information and insight, along with strategies for unlocking coveted gates. Recently, Howard Yaruss decided to join them.
"Mr. Yaruss is the founder of the Application Project Inc., which sells copies of successful applications to Ivy League colleges. Want to browse applications submitted by 21 members of Brown University’s 2009-10 freshman class? You can buy access to them for $19.99 on the company’s Web site, WeGotIn.net. For the same price, you can see applications filed by 14 members of the 2009-10 freshman class at Columbia University. Or you can buy both sets for $34.99.
"It’s all in the name of transparency, says Mr. Yaruss, who touts his new service a way to show students what successful applications look like—and what admissions officers look for when they evaluate them. Seeing how accepted applicants presented themselves, he says, can help high-school students, especially those who lack affluence, college savvy, and knowledgeable counselors.
“It’s the one remaining part of the process that’s shrouded in mystery,” Mr. Yaruss says. “Students spend thousands of dollars preparing for the SAT. We’re offering this for the cost of a trade paperback.”
...
"Alice Kleeman, a college counselor at Menlo-Atherton High School, in California, calls the service “revolting.” She suspects that the site might cause students to think they have no chance if they happen to lack the academic records, personal experiences, and writing abilities of students who were accepted.
"Ms. Kleeman also thinks there’s a high likelihood of abuse. “Even if students have the integrity not to simply lift responses from these apps, the site could also have the potential of causing students to believe they should submit something just like these apps, rather than their own authentic app,” Ms. Kleeman says. “I would hate to see my students spending money for something like this.”
"The path to the nation’s most selective colleges is crowded with entrepreneurs—independent consultants, test-preparation companies, and publishers of a zillion guides. They peddle information and insight, along with strategies for unlocking coveted gates. Recently, Howard Yaruss decided to join them.
"Mr. Yaruss is the founder of the Application Project Inc., which sells copies of successful applications to Ivy League colleges. Want to browse applications submitted by 21 members of Brown University’s 2009-10 freshman class? You can buy access to them for $19.99 on the company’s Web site, WeGotIn.net. For the same price, you can see applications filed by 14 members of the 2009-10 freshman class at Columbia University. Or you can buy both sets for $34.99.
"It’s all in the name of transparency, says Mr. Yaruss, who touts his new service a way to show students what successful applications look like—and what admissions officers look for when they evaluate them. Seeing how accepted applicants presented themselves, he says, can help high-school students, especially those who lack affluence, college savvy, and knowledgeable counselors.
“It’s the one remaining part of the process that’s shrouded in mystery,” Mr. Yaruss says. “Students spend thousands of dollars preparing for the SAT. We’re offering this for the cost of a trade paperback.”
...
"Alice Kleeman, a college counselor at Menlo-Atherton High School, in California, calls the service “revolting.” She suspects that the site might cause students to think they have no chance if they happen to lack the academic records, personal experiences, and writing abilities of students who were accepted.
"Ms. Kleeman also thinks there’s a high likelihood of abuse. “Even if students have the integrity not to simply lift responses from these apps, the site could also have the potential of causing students to believe they should submit something just like these apps, rather than their own authentic app,” Ms. Kleeman says. “I would hate to see my students spending money for something like this.”
Thursday, September 30, 2010
Update on that Medicare Auction
Peter Cramton writes to update us on the progress of the letter he organized about A poorly designed Medicare auction .
"I want to thank you again for being a signatory on the letter to Chairman Stark expressing our concerns with the flawed Medicare Competitive Bidding Program. I sent the letter linked below to Chairman Stark late on Sunday night. He responded within two days with a letter to the head of Medicare concluding, “I urge you to give these comments and recommendations serious consideration. I would also request that you inform me in a timely way as to whether CMS plans to incorporate any of the recommended changes and if not, why not.” The full letter is linked below.
"I want to thank you again for being a signatory on the letter to Chairman Stark expressing our concerns with the flawed Medicare Competitive Bidding Program. I sent the letter linked below to Chairman Stark late on Sunday night. He responded within two days with a letter to the head of Medicare concluding, “I urge you to give these comments and recommendations serious consideration. I would also request that you inform me in a timely way as to whether CMS plans to incorporate any of the recommended changes and if not, why not.” The full letter is linked below.
"Letter from 167 Concerned Auction Experts on Medicare Competitive Bidding Program" to Chairman Stark, Health Subcommittee, Ways and Means, U.S. House of Representatives, 26 September 2010. [Letter from Chairman Stark to CMS]
Yesterday, the deputy head of CMS, who is in charge of the competitive bidding program, contacted me to request a meeting to discuss the issues. We have not met yet, but I am optimistic that something good will come from this. Please be patient. Washington has now effectively shut down until after the elections. This will be a slow burner, but thanks to all of you the chance of a sensible outcome is positive. One could not say that a week ago.
A thousand thanks!
Best,
Peter
PS You may find the [Excerpts from replies] of interest. The excerpts are anonymous. Finally, here is a Freakonomics Blog with Ian Ayres that appeared today in the Opinion Pages of the New York Times.
Professor Peter Cramton
Economics, Tydings Hall
University of Maryland
College Park MD 20742-7211
Update: Peter and Brett E. Katzman have a followup column in The Economists' Voice (Oct. 2010): Reducing Healthcare Costs Requires Good Market Design
Update: Peter and Brett E. Katzman have a followup column in The Economists' Voice (Oct. 2010): Reducing Healthcare Costs Requires Good Market Design
Wednesday, September 1, 2010
The wheels of justice and Ladies' Nights
A year ago today I blogged about a lawyer who objected to differential pricing for the two sides of a matching market: he didn't like "ladies' nights" at bars, and brought suit to end them.
Today, over at the Volokh Conspiracy, chief conspirator Eugene Volokh points us to the resolution of the case, which was rejected by the district court, and has now been confirmed on appeal to the Second Circuit. Here's the court's opinion.
The opinion begins "The facts of the case are straightforward. During “Ladies’ Nights,” several New York City nightclubs (“Nightclubs”) charge males more for admission than females or give males less time than females to enter the Nightclubs for a reduced price or for free. Den Hollander, who was admitted to the Nightclubs under this admission regime, attributes these pernicious “Ladies’ Nights” to “40 years of lobbying and intimidation, [by] the special interest group called ‘Feminism’ [which] has succeed in creating a customary practice . . . of invidious discrimination of men.” Den Hollander filed suit, on behalf of himself and others like him, alleging violation of his equal protection rights pursuant to 42 U.S.C. § 1983."
As it happens, the case doesn't depend on any economic arguments, but on the fact that nightclubs aren't state actors...
Today, over at the Volokh Conspiracy, chief conspirator Eugene Volokh points us to the resolution of the case, which was rejected by the district court, and has now been confirmed on appeal to the Second Circuit. Here's the court's opinion.
The opinion begins "The facts of the case are straightforward. During “Ladies’ Nights,” several New York City nightclubs (“Nightclubs”) charge males more for admission than females or give males less time than females to enter the Nightclubs for a reduced price or for free. Den Hollander, who was admitted to the Nightclubs under this admission regime, attributes these pernicious “Ladies’ Nights” to “40 years of lobbying and intimidation, [by] the special interest group called ‘Feminism’ [which] has succeed in creating a customary practice . . . of invidious discrimination of men.” Den Hollander filed suit, on behalf of himself and others like him, alleging violation of his equal protection rights pursuant to 42 U.S.C. § 1983."
As it happens, the case doesn't depend on any economic arguments, but on the fact that nightclubs aren't state actors...
Thursday, August 19, 2010
Roommate matching and the social internet
Roommate matching continues to evolve, with Facebook playing a key role: Students Turn to Online Roommate Matching Services to Avoid Getting Paired With a Stranger (HT: Mike Ruberry)
The Chronicle gives a good description: Colleges Use Facebook to Let Freshmen Find Their Own Roommates
"This summer, incoming freshmen at five universities can use a Facebook application to find their roommates. Students can use the application, RoomBug, to fill out forms about their preferences for living and qualities they'd like to see in a roommate. Students can then request a match, which the other incoming freshman must confirm.
RoomBug is hardly the first service to let students match themselves: Tulane University announced a partnership with online service RoommateClick two years ago.
But RoomBug, which the company U-Match LLC just rolled out at Emory University, the University of Florida, Temple University, Wichita State University, and William Paterson University of New Jersey, tries to go where the students are.
"Everyone is on Facebook," says Robert Castellucci, the service's co-founder and sales director.
Over a quarter of the University of Florida's incoming freshmen have added the Facebook application, he says, but numbers on how many matches the service helped make are not yet available."
Maureen Dowd regrets the trend, writing in her NY Times column
"The serendipity of ending up with roommates that you like, despite your differences, or can’t stand, despite your similarities, or grow to like, despite your reservations, is an experience that toughens you up and broadens you out for the rest of life.
"So I was dubious when I read in The Wall Street Journal last week that students are relying more on online roommate matching services to avoid getting paired with strangers or peers with different political views, study habits and messiness quotients."
The Chronicle gives a good description: Colleges Use Facebook to Let Freshmen Find Their Own Roommates
"This summer, incoming freshmen at five universities can use a Facebook application to find their roommates. Students can use the application, RoomBug, to fill out forms about their preferences for living and qualities they'd like to see in a roommate. Students can then request a match, which the other incoming freshman must confirm.
RoomBug is hardly the first service to let students match themselves: Tulane University announced a partnership with online service RoommateClick two years ago.
But RoomBug, which the company U-Match LLC just rolled out at Emory University, the University of Florida, Temple University, Wichita State University, and William Paterson University of New Jersey, tries to go where the students are.
"Everyone is on Facebook," says Robert Castellucci, the service's co-founder and sales director.
Over a quarter of the University of Florida's incoming freshmen have added the Facebook application, he says, but numbers on how many matches the service helped make are not yet available."
Maureen Dowd regrets the trend, writing in her NY Times column
"The serendipity of ending up with roommates that you like, despite your differences, or can’t stand, despite your similarities, or grow to like, despite your reservations, is an experience that toughens you up and broadens you out for the rest of life.
"So I was dubious when I read in The Wall Street Journal last week that students are relying more on online roommate matching services to avoid getting paired with strangers or peers with different political views, study habits and messiness quotients."
Sunday, August 8, 2010
New Orleans Receivables Exchange
In several earlier posts I've been following the progress of the New Orleans Receivables Exchange.
The State of Louisiana has now passed some legislation that makes it easier for companies to sell their accounts receivable: here's the text of the Louisiana Exchange Sale of Receivables Act.
And here's an article from Inc. Magazine: A New Liquidity Solution
The State of Louisiana has now passed some legislation that makes it easier for companies to sell their accounts receivable: here's the text of the Louisiana Exchange Sale of Receivables Act.
And here's an article from Inc. Magazine: A New Liquidity Solution
Thursday, July 29, 2010
Peer to peer overnight accommodations
The NY Times reviews sites of "social network bed and breakfasts" on which you can reserve rooms for overnight stays in cities around the world: Europe Without Hotels.
The sites have various ways to protect against scams:
"In Paris, AirBnB has places in every arrondissement, including $13-a-night rooms in the western suburbs and $285-a-night houseboats on the Seine. As the first Web site of its kind to grab the headlines, the system has already developed a large and loyal user base. Some properties have as many as 70 user-generated reviews, which give paying guests a greater sense of confidence. It is similar to how eBay works: you’re more likely to buy from an eBay seller with good feedback." ...
"After the brief tour, I gave Mr. Mostaedi the code that allows him to collect my payment from iStopOver. That’s one of the safeguards that iStopOver offers to guests. If a listing turns out to be fraudulent or misstated, you can refuse to give the owner the code, and the fee is refunded in full. Other services offer similar protections: AirBnB withholds a host’s payment until 24 hours after guests check into an accommodation in order to fend off potential scammers, and Crashpadder uses credit card payments to verify guest identities (though it says it will monitor but not otherwise involve itself in any disputes)."
Here are the sites mentioned:"AIRBNB.COM
AirBnB.com, founded in 2007 in San Francisco, is the largest of this new generation of social B&Bs and has the most user reviews.
Where: About 5,378 cities in 146 countries.
Accommodations: Air mattresses to entire villas.
Price: In New York, from $10 for a room to $3,000 for a loft.
ISTOPOVER.COM
IStopOver, founded in 2009 in Toronto, specializes in big events, like this summer’s World Cup in South Africa.
Where: Mostly North America, Europe and South Africa.
Accommodations: Apartments and houses.
Price: $10 to $8,000 a night.
CRASHPADDER.COM
Founded in 2008 in London, Crashpadder.com operates mostly in Britain, with a surge expected during the 2010 Olympics in London.
Where: 898 cities, including more than 1,000 listings in London.
Accommodations: Bedrooms to houses.
Price: From £15 (about $21 at $1.43 to the pound) a night, plus £3 booking fee.
ROOMORAMA.COM
Founded in 2008, Roomorama.com focuses on higher-end properties, especially in New York City.
Where: 36 cities, including more than 1,000 listings in New York.
Accommodations: Bedrooms to houses.
Price: From $30 to $5,000, plus an 8 to 12 percent booking fee. "
AirBnB.com, founded in 2007 in San Francisco, is the largest of this new generation of social B&Bs and has the most user reviews.
Where: About 5,378 cities in 146 countries.
Accommodations: Air mattresses to entire villas.
Price: In New York, from $10 for a room to $3,000 for a loft.
ISTOPOVER.COM
IStopOver, founded in 2009 in Toronto, specializes in big events, like this summer’s World Cup in South Africa.
Where: Mostly North America, Europe and South Africa.
Accommodations: Apartments and houses.
Price: $10 to $8,000 a night.
CRASHPADDER.COM
Founded in 2008 in London, Crashpadder.com operates mostly in Britain, with a surge expected during the 2010 Olympics in London.
Where: 898 cities, including more than 1,000 listings in London.
Accommodations: Bedrooms to houses.
Price: From £15 (about $21 at $1.43 to the pound) a night, plus £3 booking fee.
ROOMORAMA.COM
Founded in 2008, Roomorama.com focuses on higher-end properties, especially in New York City.
Where: 36 cities, including more than 1,000 listings in New York.
Accommodations: Bedrooms to houses.
Price: From $30 to $5,000, plus an 8 to 12 percent booking fee. "
Saturday, July 24, 2010
Express mail 1.0
The Pony Rides Again (and again)
" The heroic, nearly 2,000-mile delivery of mail across the country hemorrhaged money, from the first day a rider saddled up until the click of the transcontinental telegraph shut it down 78 weeks later. "
" The heroic, nearly 2,000-mile delivery of mail across the country hemorrhaged money, from the first day a rider saddled up until the click of the transcontinental telegraph shut it down 78 weeks later. "
Wednesday, June 9, 2010
Personal data for sale
Web Start-Ups Offer Bargains for Users’ Data
The budgeting Web site Mint.com, for example, displays discount offers from cable companies or banks to users who reveal their personal financial data, including bank and credit card information. The clothing retailerBluefly could send offers for sunglasses to consumers who disclose that they just bought a swimsuit. And location-based services like Foursquare and Gowalla ask users to volunteer their location in return for rewards like discounts on Pepsi drinks or Starbucks coffee.
These early efforts are predicated on a shift in the relationship between consumer and company. Influenced by consumers’ willingness to trade data online, the sites are pushing to see how much information people will turn over."...
"New companies including WeShop, Aprizi, Blippy and Dopplr are trying to exploit the data that people seem so willing to give up. Some are even allowing shoppers to set what terms they want — free shipping, half-price discounts, only fair-trade products. They can also list what they are shopping for, like a gray cashmere sweater under $100, for instance, and let the retailers fight it out for the right to make a sale.
“The whole privacy debate has grown up around people using your data without your permission,” said Antony Lee, chief executive of WeShop. “If you want to use your data to your benefit, that’s for you to do,” Mr. Lee said."
The budgeting Web site Mint.com, for example, displays discount offers from cable companies or banks to users who reveal their personal financial data, including bank and credit card information. The clothing retailerBluefly could send offers for sunglasses to consumers who disclose that they just bought a swimsuit. And location-based services like Foursquare and Gowalla ask users to volunteer their location in return for rewards like discounts on Pepsi drinks or Starbucks coffee.
These early efforts are predicated on a shift in the relationship between consumer and company. Influenced by consumers’ willingness to trade data online, the sites are pushing to see how much information people will turn over."...
"New companies including WeShop, Aprizi, Blippy and Dopplr are trying to exploit the data that people seem so willing to give up. Some are even allowing shoppers to set what terms they want — free shipping, half-price discounts, only fair-trade products. They can also list what they are shopping for, like a gray cashmere sweater under $100, for instance, and let the retailers fight it out for the right to make a sale.
“The whole privacy debate has grown up around people using your data without your permission,” said Antony Lee, chief executive of WeShop. “If you want to use your data to your benefit, that’s for you to do,” Mr. Lee said."
Monday, April 5, 2010
Sniping in auctions with substitutes
On an auction site like eBay, many copies of the same good may be on offer for different auctions. A new sniping site, goSnipe, allows bidders to specify a group of auctions on which to submit last minute bids, one at a time, but to stop when the desired purchase is made.
Here's some research on bid sniping, and the underlying game theory.
Here's some research on bid sniping, and the underlying game theory.
Tuesday, March 16, 2010
B2B finance
Page 14 of a recent report by Morgan Stanley focuses on The Receivables Exchange, about which I have posted previously. (The Morgan Stanley report emphasizes: " This is not a research report and was not prepared by Morgan Stanley research department. It was prepared by Morgan Stanley sales, trading, banking and other non-research personnel. Past performance is not necessarily a guide to future performance.") Here it is.
The report has some recent performance statistics, and says "The Receivables Exchange, a private company, started trading on November 18, 2008 to bring private capital to the market for SME [small/medium enterprise] credit. Via The Receivables Exchange, an SME can auction its receivables to the highest bidder(s) for a substantial advance rate. The Receivables Exchange provides straight-through processing and acts as collateral agent and servicer, using an innovative approach to mitigate default risk."
Here are my previous posts about the Receivables Exchange, which strikes me as quite an interesting venture in disintermediation of credit. (Full disclosure; I'm on their advisory board.)
The report has some recent performance statistics, and says "The Receivables Exchange, a private company, started trading on November 18, 2008 to bring private capital to the market for SME [small/medium enterprise] credit. Via The Receivables Exchange, an SME can auction its receivables to the highest bidder(s) for a substantial advance rate. The Receivables Exchange provides straight-through processing and acts as collateral agent and servicer, using an innovative approach to mitigate default risk."
Here are my previous posts about the Receivables Exchange, which strikes me as quite an interesting venture in disintermediation of credit. (Full disclosure; I'm on their advisory board.)
Friday, February 5, 2010
Would Professor Moriarty have invented an eBay, a Paypal or a Craigslist?
Professor Moriarty was, of course, Sherlock Holmes' nemesis (or was it the other way around)? I ask the question in the title of this post because a much more modern criminal mastermind has just been sentenced. Here's the headline from the London Telegraph: Mastermind behind 'eBay for criminals' is facing jail
"Renukanth Subramaniam, from north London, established the website DarkMarket, which threatened every bank account and credit card holder in Britain and caused tens of millions of pounds of losses.
It was described as a "one-stop shop" for fraudsters buying and selling stolen details such as PIN numbers, account balances, answers to account security questions and passwords for social networking websites.
"The site even offered criminal users a secure payment system, training and advertising space to sell equipment used to clone bank and credit cards.
DarkMarket operated for almost three years as a “criminals only” forum, with more than 2,500 members at its peak, who could buy up to 10 credit card numbers along with other personal information for around £30.
It was shut down after a two-year global investigation in which undercover agents from the FBI and the Serious Organised Crime Agency infiltrated the site by posing as criminals.
A spokesman for Soca called it “one of the most pernicious online criminal websites in the world” and estimated that its victims lost tens of millions of pounds.
Officials said there was a code of “honour amongst thieves” on the site.
There was a secure payment system between criminals – described by Judge John Hillen as a "PayPal for criminals". "
See my earlier post: More on Darkmarket, the Craigslist of Crime
Saturday, January 30, 2010
iPhone app for finding broken parking meters
Application identifies broken meters so that drivers can park at them without paying.
The app, called NYC Broken Meters, "allows users to locate the closest broken parking meter along with detailed directions on how to get to it. This is no trivial issue. According to city ordinances, it is legal to park next to a broken meter for one hour without paying, making this application a vital one in city where parking prices can reach $500 or more a month. "
The app, called NYC Broken Meters, "allows users to locate the closest broken parking meter along with detailed directions on how to get to it. This is no trivial issue. According to city ordinances, it is legal to park next to a broken meter for one hour without paying, making this application a vital one in city where parking prices can reach $500 or more a month. "
Tuesday, January 26, 2010
Spring 2010 courses in Market Design in Boston/Cambridge
Susan Athey at Harvard and Tayfun Sonmez at Boston College will both be teaching market design courses this semester, and Peter Coles and Benjamin Edelman will be teaching an MBA class at HBS called Managing Networked Businesses, that has a substantial focus on entrepreneurial market design.
Susan Athey: Economics 2056b. Topics in Market Design Catalog Number: 0402 Half course (spring term). Tu., Th., 1–2:30. EXAM GROUP: 15, 16Studies topics in market design, focusing on auctions, auction-based marketplaces and platform markets. Covers methods and results from theory, empirical work, econometrics and experiments, highlighting practical issues in real-world design.
Tayfun Sonmez: EC 802 Advanced Microeconomic Theory (Spring: 3)In recent years, auction theory and matching theory have found applications in many interesting real-life problems from a market/mechanism design perspective. Topics of this course include the theory of matching markets, multi-object auctions, school choice and kidney exchange.
Susan Athey: Economics 2056b. Topics in Market Design Catalog Number: 0402 Half course (spring term). Tu., Th., 1–2:30. EXAM GROUP: 15, 16Studies topics in market design, focusing on auctions, auction-based marketplaces and platform markets. Covers methods and results from theory, empirical work, econometrics and experiments, highlighting practical issues in real-world design.
Tayfun Sonmez: EC 802 Advanced Microeconomic Theory (Spring: 3)In recent years, auction theory and matching theory have found applications in many interesting real-life problems from a market/mechanism design perspective. Topics of this course include the theory of matching markets, multi-object auctions, school choice and kidney exchange.
Wednesday, December 9, 2009
Course allocation at HBS
Some of the gems of the market design literature involve the careful analysis of existing institutions for allocating scarce goods, to understand the good and bad properties of those mechanisms, and the incentives they give to participants.
The latest example analyzes the way second year MBA courses at the Harvard Business School are assigned.
The Multi-unit Assignment Problem: Theory and Evidence from Course Allocation at Harvard by Eric Budish and Estelle Cantillon
Abstract: "This paper uses data consisting of agents. strategically reported preferences and their underlying true preferences to study strategic behavior in the course allocation mechanism used at Harvard Business School. We show that the mechanism is manipulable in theory, manipulated by students in practice, and that these manipulations cause meaningful welfare losses. However, we also find that ex-ante welfare is higher than under the Random Serial Dictatorship (RSD), which is the only known mechanism that is anonymous, strategyproof and ex-post efficient. We trace the poor ex-ante performance of RSD to a phenomenon, "callousness", specific to multi-unit assignment and unrelated to risk attitudes. We draw lessons for the design of multi-unit assignment mechanisms and for market design more broadly."
A related paper is Budish's proposal for an alternative mechanism: The Combinatorial Assignment Problem: Approximate Competitive Equilibrium from Equal Incomes.
(And here's my earlier post on an early version of that paper.)
The latest example analyzes the way second year MBA courses at the Harvard Business School are assigned.
The Multi-unit Assignment Problem: Theory and Evidence from Course Allocation at Harvard by Eric Budish and Estelle Cantillon
Abstract: "This paper uses data consisting of agents. strategically reported preferences and their underlying true preferences to study strategic behavior in the course allocation mechanism used at Harvard Business School. We show that the mechanism is manipulable in theory, manipulated by students in practice, and that these manipulations cause meaningful welfare losses. However, we also find that ex-ante welfare is higher than under the Random Serial Dictatorship (RSD), which is the only known mechanism that is anonymous, strategyproof and ex-post efficient. We trace the poor ex-ante performance of RSD to a phenomenon, "callousness", specific to multi-unit assignment and unrelated to risk attitudes. We draw lessons for the design of multi-unit assignment mechanisms and for market design more broadly."
A related paper is Budish's proposal for an alternative mechanism: The Combinatorial Assignment Problem: Approximate Competitive Equilibrium from Equal Incomes.
(And here's my earlier post on an early version of that paper.)
Sunday, November 15, 2009
Market for lesson plans
College professors sell textbooks, business school professor can profit from case studies, and now there's a market for lesson plans for elementary and middle school classes: Selling Lessons Online Raises Cash and Questions .
The "cash" in the headline is clear enough, while the "questions" seem to be of two kinds. The first is about intellectual property, who owns what:
"While some of this extra money is going to buy books and classroom supplies in a time of tight budgets, the new teacher-entrepreneurs are also spending it on dinners out, mortgage payments, credit card bills, vacation travel and even home renovation, leading some school officials to raise questions over who owns material developed for public school classrooms."
The other kinds of questions involve the repugnance we sometimes see raised by markets for things that used to be given away or handmade:
"Beyond the unresolved legal questions, there are philosophical ones. Joseph McDonald, a professor at the Steinhardt School of Culture, Education and Human Development at New York University, said the online selling cheapens what teachers do and undermines efforts to build sites where educators freely exchange ideas and lesson plans.
“Teachers swapping ideas with one another, that’s a great thing,” he said. “But somebody asking 75 cents for a word puzzle reduces the power of the learning community and is ultimately destructive to the profession.” "
The internet is a big facilitator here:
"Just about every imaginable lesson for preschool through college is now up for sale — on individual teachers’ blogs as well as commercial sites where buyers can review and grade the material.
Teachers Pay Teachers, one of the largest such sites, with more than 200,000 registered users, has recorded $600,000 in sales since it was started in 2006 — $450,000 of that in the past year, said its founder, Paul Edelman, a former New York City teacher. The top seller, a high school English teacher in California, has made $36,000 in sales.
Another site, We Are Teachers, went online last year with a “knowledge marketplace” that includes lesson plans and online tutoring."
The "cash" in the headline is clear enough, while the "questions" seem to be of two kinds. The first is about intellectual property, who owns what:
"While some of this extra money is going to buy books and classroom supplies in a time of tight budgets, the new teacher-entrepreneurs are also spending it on dinners out, mortgage payments, credit card bills, vacation travel and even home renovation, leading some school officials to raise questions over who owns material developed for public school classrooms."
The other kinds of questions involve the repugnance we sometimes see raised by markets for things that used to be given away or handmade:
"Beyond the unresolved legal questions, there are philosophical ones. Joseph McDonald, a professor at the Steinhardt School of Culture, Education and Human Development at New York University, said the online selling cheapens what teachers do and undermines efforts to build sites where educators freely exchange ideas and lesson plans.
“Teachers swapping ideas with one another, that’s a great thing,” he said. “But somebody asking 75 cents for a word puzzle reduces the power of the learning community and is ultimately destructive to the profession.” "
The internet is a big facilitator here:
"Just about every imaginable lesson for preschool through college is now up for sale — on individual teachers’ blogs as well as commercial sites where buyers can review and grade the material.
Teachers Pay Teachers, one of the largest such sites, with more than 200,000 registered users, has recorded $600,000 in sales since it was started in 2006 — $450,000 of that in the past year, said its founder, Paul Edelman, a former New York City teacher. The top seller, a high school English teacher in California, has made $36,000 in sales.
Another site, We Are Teachers, went online last year with a “knowledge marketplace” that includes lesson plans and online tutoring."
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