New sources of data for selecting who to hire

Aki Ito has written another story at Bloomberg News about job matching using new kinds of data (the headline is a little misleading though): Machines Gauging Your Star Potential Automate HR Hiring

"A handful of technology companies from Knack.it Corp. to Evolv Inc. are ... developing video games and online questionnaires that measure personality attributes in a job applicant. Based on patterns of how a company’s best performers responded in these assessments, the software estimates a candidate’s suitability to be everything from a warehouse worker to an investment bank analyst.
...
"“People are our biggest resource, and right now a lot of them are mismatched,” said [Erik] Brynjolfsson, who specializes in research on information technology and productivity and is an advisor to Knack. “If you put the right kind of person in the right task, it’s good for that person and it’s good for the company.”
...
"“You have this enormous pool of people that’s being missed because of the way the entire industry goes after the same kinds of people, asking, did you go to Stanford, did you work at this company?” said Erik Juhl, head of talent at Vungle Inc., a San Francisco-based video advertising startup, and formerly a recruiter at Google Inc. and LinkedIn Corp. “You miss what you’re looking for, which is -- what is this person going to bring to the table?”

Signaling that you're not a business traveller by committing to a mixed strategy

Airlines like to price-discriminate against business travellers and others whose trips are non-discretionary. So, how to identify the leisure travellers?

Travel site Getgoing.com offers substantial airfare discounts to those who agree to "Pick Two, Get One" and choose two destinations and let the site choose one of them.

Equalizing transplant waiting times across regions: OrganJet helps its first patient

Sridhar Tayur at CMU, the founder of OrganJet emails "Thanks for your help and support...our first patient gets her kidney away from where she lives" and points me to this press release--OrganJet customer receives kidney transplant years faster due to smart multiple listing.

"Originally listed in the DC area about 18 months ago, where the median wait time is nearly 5 years -- wait times in nearby Maryland are not that much better -- the 41-year old wife and mother contacted OrganJet for advice and arranged her on-demand jet transportation options (in addition to available commercial choices) just a few months ago. 
"There is significant disparity in wait times across different geographic areas, ranging from over 5 years in areas like NJ, MA, Washington D.C. and CA, while it is half that (or less) in regions like Pittsburgh, PA, Portland, OR and Madison, Wisconsin," said Sridhar Tayur, Founder and CEO of OrganJet and a professor at Carnegie Mellon University's Tepper School of Business. Every year, over 5000 patients die waiting for a kidney in some parts of the US while organs in other regions may go unused.  While the actual numbers of wasted organs is a subject of debate, it is generally recognized to be in the range of 500-2500 annually. "Our goal is to provide affordable options for patients on transplant lists in high wait time areas so that they can increase their access to organs. This improved matching also helps reduce organ waste," said Tayur."
***********

See my earlier post on OrganJet.

Market designers at Yahoo!, Google, eBay and Microsoft

The Economist recently celebrated the contributions of Preston McAfee, Hal Varian, Steve Tadelis and Susan Athey: Micro stars, macro effects: Meet the economists who are making markets work better

Sridhar Tayur proposes an entrepreneurial way to reform organ waiting lists

Deceased donor organs in the United States are allocated through regional (not national) waiting lists, which leads to some dramatic differences in e.g. waiting times in different parts of the country. Individual candidates for transplantation can register as patients in different regions, if they are healthy and wealthy enough to move around. (e.g. Steve Jobs received a liver in Memphis, although I recall he worked at a company located in California...)  He had access to good transportation opportunities.

CMU professor Srihar Tayur, who will be speaking at Stanford GSB at noon today, has an entrepreneurial project, OrganJet,  intended to give that kind of access to transportation to people for whom it has previously been an insuperable obstacle.  Here's an article about his operation: Can Private Jets for the Poor Save Health Care Dollars?

Gender-pricing discrimination

The NYC Department of Consumer Affairs is on the case, the WSJ reports: City Nails Sex-Based Pricing.

Among the targets are salons that charge men and women differently for manicures and haircuts. But are those really the same products?

""It's ridiculous. I have some guys who need to come in every two weeks," said Ania Siemieniaka, the owner of Freckle Skin and Hair, which had to pay $175 for a violation. "If I raise my prices, I'll lose all my male customers."

"The city's Department of Consumer Affairs began stepping up enforcement of the law last year, when it issued 580 gender-pricing violations to businesses, more than double the 212 doled out the year before.

"We wanted to really send a strong message to businesses about this kind of illegal pricing, so we did a very focused sweep over the course of the year," said the department's commissioner, Jonathan Mintz. "That sweep was largely targeted at salons and barbershops and laundry and dry cleaning."

"Nearly all of the violations were the result of sweeps rather than complaints, said Mr. Mintz, because businesses and industry groups weren't correcting the practice on their own."
********

Here are earlier posts on a related topic: "Girl taxi" and "Ladies Nights", and The wheels of justice and Ladies' Nights

The university (Stanford) as a marketplace of ideas and innovation

Writing in the New Yorker, Ken Auletta thinks about what makes Stanford the heart of silicon valley, and whether this is an entirely good thing... Get Rich U.: There are no walls between Stanford and Silicon Valley. Should there be?

"Innovation comes from myriad sources, including the bastions of East Coast learning, but Stanford has established itself as the intellectual nexus of the information economy.
...

If the Ivy League was the breeding ground for the élites of the American Century, Stanford is the farm system for Silicon Valley. When looking for engineers, Schmidt said, Google starts at Stanford. Five per cent of Google employees are Stanford graduates. The president of Stanford, John L. Hennessy, is a director of Google; he is also a director of Cisco Systems and a successful former entrepreneur. Stanford’s Office of Technology Licensing has licensed eight thousand campus-inspired inventions, and has generated $1.3 billion in royalties for the university. Stanford’s public-relations arm proclaims that five thousand companies “trace their origins to Stanford ideas or to Stanford faculty and students.” They include Hewlett-Packard, Yahoo, Cisco Systems, Sun Microsystems, eBay, Netflix, Electronic Arts, Intuit, Fairchild Semiconductor, Agilent Technologies, Silicon Graphics, LinkedIn, and E*Trade.
...

"But Stanford’s entrepreneurial culture has also turned it into a place where many faculty and students have a gold-rush mentality and where the distinction between faculty and student may blur as, together, they seek both invention and fortune. Corporate and government funding may warp research priorities. A quarter of all undergraduates and more than fifty per cent of graduate students are engineering majors. At Harvard, the figures are four and ten per cent; at Yale, they’re five and eight per cent. Some ask whether Stanford has struck the right balance between commerce and learning, between the acquisition of skills to make it and intellectual discovery for its own sake."

Science exchange

One of the notable things about this description is the ambivalence about monetary payments...

Online Marketplace Helps Professors Outsource Their Lab Research

Science Exchange

"The site functions like a marketplace, linking researchers who need to outsource parts of their work with people from institutions and companies who can provide that help. The providers bid, the researchers pick the bid that suits them best, and Science Exchange takes about a 5 percent cut (that percentage drops for bids worth more than $5,000).
The idea for the project came from Ms. Iorns’s own problems outsourcing research to other institutions. “The hardest part was paying” for such services, Ms. Iorns said, because universities often don’t have a protocol for how to pay for outsourced research.
This is not the first effort to use the Internet to link researchers to the facilities they need, but the “market aspect” of Science Exchange makes it different, said Edward G. Derrick, chief program director for the Center of Science Policy and Society Programs at the American Association for the Advancement of Science.
The site’s model has raised questions for Michael R. Rossi, director of the Cancer Genomics Shared Resource at Emory University’s Winship Cancer Institute. Mr. Rossi thinks researchers may get into trouble with the National Institutes of Health and other institutions that support them if they pay a third party a fee to find outsourced work. “That really could become a big problem,” Mr. Rossi said.
Ms. Iorns, though, said she has been in contact with the NIH’s National Center for Research Resources, and she said officials there have been enthusiastic about the idea. “This is something they’ve really wanted to set up for some time,” she said."

NBER market design conference, October 28-29, 2011

NATIONAL BUREAU OF ECONOMIC RESEARCH, Market Design Working Group Meeting, Susan Athey and Parag Pathak Organizers, October 28-29, 2011.

PROGRAM Friday, October 28 8:15 am Shuttles leave Royal Sonesta Hotel for NBER 8:30 am Continental Breakfast 8:55 am Welcome and Opening Remarks 9:00 am Matching with Contracts Tayfun Sonmez, Boston College Tobias Switzer, US Air Force Matching with (Branch-of-Choice) Contracts at United States Military Academy John Hatfield, Stanford University Scott Duke Kominers, University of ChicagoMultilateral Matching  10:30 am Break 10:45 am Strategy-Proofness and Efficiency in Complex Design Problems Eduardo Azevedo, Harvard University Eric Budish, University of Chicago Strategyproofness in the Large as a Desideratum for Market Design Clayton Featherstone, Harvard University A Rank-Based Refinement of Ordinal Efficiency and a New (but Familiar) Class of Ordinal Assignment Mechanisms 12:15 pm Lunch 1:15 pm Information and Price Discovery Haoxiang Zhu, Stanford University Do Dark Pools Harm Price Discovery? Mark Satterthwaite, Northwestern University Steven Williams, University of Illinois at Urbana-Champaign Konstantinos Zachariadis, London School of Economics Price Discovery Steven Tadelis, UC, Berkeley and eBay Research Labs Florian Zettelmeyer, Northwestern University and NBER Information Disclosure as a Matching Mechanism: Theory and Evidence from a Field Experiment  3:30 pm Break 3:45 pm Kidney Exchange Tayfun Sonmez, Boston College Utku Unver, Boston College Altruistically Unbalanced Kidney Exchange Itai Ashlagi, Massachusetts Institute of Technology David Gamarnik, Massachusetts Institute of Technology Alvin Roth, Harvard University and NBER The Need for (long) Chains in Kidney Exchange 5:15 pm Adjourn 5:20 pm Shuttles leave NBER for Royal Sonesta Hotel 6:00 pm Dinner Bambara Restaurant25 Edwin H. Land Blvd., Cambridge (across the street from the Royal Sonesta Hotel) Saturday, October 29 8:15 am Shuttles leave Royal Sonesta Hotel for NBER 8:30 am Continental Breakfast 9:00 am Online Markets Susan Athey, Harvard University and NBER Ittai Abraham, Microsoft Research Moshe Babaioff, Microsoft Research Michael Grubb, Massachusetts Institute of TechnologyPeaches, Lemons, and Cookies: Designing Auction Markets with Dispersed Information  Liran Einav, Stanford University and NBER Theresa Kuchler, Stanford University Jonathan Levin, Stanford University and NBER Neel Sundaresan, eBay Research LabsLearning from Seller Experiments in Online Markets  10:30 am Break 10:45 am User Interfaces and User Generated Content Arpita Ghosh, Yahoo! Research Preston McAfee, Yahoo! ResearchIncentivizing High-Quality User-Generated Content  Sven Seuken, University of Zurich David Parkes, Harvard University Eric Horvitz, Microsoft Research Kamal Jain, eBay Research Labs Mary Czerwinski, Microsoft Research Desney Tan, Microsoft ResearchMarket User Interface Design  12:15 pm Lunch 1:15 pm School Choice and Student Assignment Fuhito Kojima, Stanford University John Hatfield, Stanford University Yusuke Narita, Massachusetts Institute of Technology Promoting School Competition Through School Choice: A Market Design Approach Yan Chen, University of Michigan Onur Kesten, Carnegie Mellon University From Boston to Shanghai to Deferred Acceptance: Theory and Experiments on A Family of School Choice Mechanisms 2:45 pm Adjourn ================== Format:  Authors should plan to speak for about 30-35 minutes.

The Receivables Exchange and the NYSE

I've been following The Receivables Exchange in several prior posts, and now the NYSE is interested too: today's WSJ reports NYSE Euronext Bulks Up In Market for Receivables.

"NYSE Euronext plans to boost its role in helping companies secure short-term funding, hiring a longtime GE Capital executive as part of an initiative that includes buying a stake in an electronic market for corporate receivables.

"The parent of the Big Board aims to use its investment in the New Orleans-based Receivables Exchange as another venue for public companies to borrow money, complementing the long-term funding provided via stock-market listings at a time when businesses face financing difficulties.

"NYSE has taken a minority stake in the four-year-old venture and hired Paul DeDomenico, previously chief executive of GE Capital's working-capital-solutions group, to lead the exchange group's corporate-receivables programs.

"The moves, which come amid a fierce political debate over bank lending to small-and-midsize businesses, could provide an advantage to the NYSE in its battle with competitors over share listings, by allowing the Big Board operator to offer a broader suite of services to companies that choose to list with it. And the moves provide an entry point to a market in receivables estimated by the companies at $17 trillion in size domestically.
...
"The Receivables Exchange formed in 2007 as a platform for companies to auction their accounts receivable to buyers like hedge funds and commercial banks. The eBay-like system lets sellers of receivables generate short-term cash quickly, while buyers can book a profit when debts are paid back.
...
"Upheaval in the corporate lending market has provided an opening for the company, where trading volumes of accounts receivable in its U.S. market for small-and-midsize businesses leapt nearly six-fold from 2009 to 2010.

"This year the value of receivables bought and sold on the platform is on pace to top $1 billion in value, according to Nic Perkin, the Receivables Exchange's president and co-founder.

Market design courses in Boston this semester

Boston is humming with market design courses.

Tayfun Sonmez will be offering an undergraduate course on market design at Boston College: Advanced Microeconomic Theory (T Th 13:30 - 14:45 AM).
There's no web site, but the course focuses on various aspects of matching, including some of Tayfun's latest work.

Susan Athey will be offering an undergrad course on market design at Harvard:
Economics 1056: Market Design Harvard College/GSAS: 69207 Fall 2011-2012   Location: Sever Hall 106, Meeting Time: Tu., Th., 2:30-4

Ben Edelman and Peter Coles will be offering an MBA course at HBS,

The Online Economy: Strategy and Entrepreneurship

Intended primarily for MBA’s.  Has one module firmly grounded in market design: 

“Monetization and Market Design: What structures, rules, and incentives create a well-functioning online ecosystem? We examine review and reputation systems, dynamic marketplace pricing, and institutions to create a safe environment for users, while at the same time protecting a site from liability.”

Peter Coles and I will be giving a graduate course on market design at Harvard:
Economics 2056a: Market Design  Harvard College/GSAS: 3634, Fall 2011-2012, Location: Littauer Center M-16, Meeting Time: F., 9-12

And next semester, Parag Pathak will be offering an undergrad course in market design at MIT.

Update: and Sven Seuken points out that David Parkes at Harvard is offering "Economics and Computation" in Computer Science this Fall. It will touch on a couple of market design topics: http://www.seas.harvard.edu/courses/cs186/

The market for taxis

With a Start-Up Company, a Ride Is Just a Tap of an App Away
"Uber, a start-up based in San Francisco, offers a cellphone application that is aimed at making using a car service quick and painless.
...
"Uber is not a taxi or limousine company. Instead it operates as a dispatch service, working with local owners of licensed private car companies. Uber provides each car with an iPhone and software that manages incoming requests. When an Uber user needs a ride, the dispatcher and the closest car are notified, and the system sends back an estimate of the pick-up time. While they wait, users can monitor the car’s location on their phone."
...
"Uber, which is available for the iPhone and Android devices, requires users to enter their credit card information when they sign up. When they reach their destination, they can simply hop out, and the ride is charged to the card. Uber gets a percentage of each fare; the rest goes to the car services and drivers."

Milgrom on market design

Paul Milgrom has an article in the latest  (April 2011) issue of Economic Inquiry:
CRITICAL ISSUES IN THE PRACTICE OF MARKET DESIGN

Abstract: The years since 1994 have witnessed the emergence of market design as a new discipline within economics, in which research and practice exert powerful mutual influences in matching and auction markets. The problem of designing well-functioning auction markets has led economic designers to revisit such fundamental issues as the definitions of commodities, the ways participants communicate with markets, the trade-offs between the incentives provided for truthful reporting and other attributes of mechanism performance, and the determinants of the scope of markets, especially whether and how trade in different goods is linked.

“Matching markets: Theory and practice”

That's the title of this paper by Atila Abdulkadiroglu and Tayfun Sonmez, presented at the 2010 Econometric Society World Congress, in Shanghai.

Yeon-Koo Che has just posted his discussion of that paper. Among other things, he suggests that one reason we don’t see more centralized clearinghouses is that they don’t necessarily create Pareto improvements, and a hybrid approach is worth thinking about. (For example, he speculates, maybe a centralized clearinghouse for college admissions could be started if it explicitly allowed colleges to continue to engage in early admissions, and only tried to organize the "regular admissions" part of the market.)

Swoopo: gone but not forgotten

Swoopo is reported to be bankrupt: Goodnight, Swoopo: The Pay-Per-Bid Auction Site Is Dead

I blogged in 2009 about A proliferation of penny auctions, and when I looked back at it just now, I saw that it attracted a bunch of spammish comments from penny auction sites...

HT: Peter Coles

AMMA 2011 The Second Conference on Auctions, Market Mechanisms and Their Applications

 AMMA 2011: The Second Conference on Auctions, Market Mechanisms and Their Applications  New York, NY August 22-23, 2011  Call for papers.

The conference seeks papers devoted to issues that arise in all stages of deploying a market mechanism to solve a problem. This includes, but is not limited to, theoretical and empirical examination of questions such as:

• Is a market the right mechanism for the problem? What are the externalities involved? What are the issues with central planning?

• How should novel markets be organized? What is the "right" micro-structure for a given problem?

• What is the best way to provide incentives? Is (real) money necessary?

• Will the use of markets lead to the creation of artificial economies and what can we say about these economies?

• What new problems arise because of the special nature of these markets (e.g., from everyone wanting to use a cluster around the time of a conference deadline)?

• What protocols need to be in place for agents to participate in such markets (including everything from practical matters like integrating bidding protocols into the system to theoretical questions like incentive compatibility)?

• Is there a need for new mechanisms for specific applications (e.g., auctions used in sponsored search were never used in other settings)? If so, what properties of applications warrant such mechanisms?

In addition to more traditional academic papers, we are especially interested in experiences from the real world (case studies and new applications). Below are some potential areas, but the list is simply illustrative rather than exhaustive -- we welcome papers in all areas of market design.
Sample areas include:

• Content delivery networks
• Resource allocation in networks and distributed computing
• Sponsored search auctions
• Prediction markets
• Allocation of landing slots in congested airports
• Road pricing
• Student-school matching
• Kidney exchanges
• Combinatorial auctions

Submission Deadline
April 15, 2011

Notification of acceptance/rejection
May 27, 2011

Final versions of archival papers due
June 15, 20

The state of economic theory

Jeff Ely at Cheap Talk reviews the state of economic theory and lists four positive signs (among them a plug for market design):

1. Theorists have been recruiting targets for high-profile private sector jobs.  Michael Schwarz and Preston McAfee at Yahoo!, Susan Athey at Microsoft for example.  In addition the research departments in these places are full of theorists-on-leave.
2. Despite some overall weakness, theory is and always has been well represented at the top of the junior market.  This year Alex Wolitzky, as pure a theorist as there is, is the clear superstar of the market.  Here is the list of invitees to the Review of Economics Studies Tour from previous years.  This is generally considered to be an all-star team of new PhDs in each year.  Two theorists out of seven per year on average.  (No theorist last year though.)
3. In recent years, two new theory journals, Theoretical Economicsand American Economic Journal:  Microeconomics, have been adopted by the leading Academic Societies in economics.  These journals are already going strong.
4. Market design is an essentially brand new field and one of the most important contributions of economics in recent years.  It is dominated by theorists.

HT to Eric Budish, who is one of those guys Ely has in mind...

Barter in a recession

In a Tight Holiday Season, Some Turn to Barter

"The proliferation of Web sites with names like Swap.com and SwapMamas have moved swaps from the home and the community center to online bazaars with millions of users. No industry figures exist on the number of for-profit startups, but officials at one of the largest, Swap.com, said they have over a million registered users and an inventory of 15 million items at any given time.

"ThredUP opened business in April as a clothing exchange site and expanded this month to toys. Mrs. Spitzer signed up as a member in August.
She said that she used to buy new clothes for her three children, all under age 7, every couple of months and then give them away as her children outgrew them. But after she joined ThredUP, she began viewing her children’s hand-me-downs as currency."

Swap.com and ThredUP charge a small fee for each trade ($1 and $5). I didn't see such a fee on SwapMamas, which also encourages people to offer their used goods as gifts when they don't find a coincidence of wants, and has a reputation system that is intended to make frequent givers also favored recipients of gifts.

'tis the season to exchange gift cards

Cardpool is making a market in gift cards, offering to buy yours, and sell you those cashed in by others.
"You are always buying directly from us and selling directly to us. Cardpool buys our gift cards directly from our customers, verifies the authenticity and balance of each gift card, and holds on to them until a buyer is found. Even though we may never find a buyer for a given gift card, we pay sellers within 24 hours of receiving their gift card."

Here's how they address the trust problem involved with putting a gift card in the mail to them:

"How do I know I'll receive payment after sending you my gift cards?"
"Great question! Although there is a bit of a leap of faith here, we've received glowing reviews from CNN, NBC, ABC, CBS, FOX, NPR, The New York Times, The Wall Street Journal, and many other highly reputable publications. In addition, we're backed by the same founders, CEOs, and investors responsible for many of the brands we've come to love including Google, Facebook, PayPal, Zappos, StubHub, Twitter, Skype, Slide, Lotus, Mint, and many others. We were only able to do this by putting our customers first.
If you'd like to learn more, read about us in the news and learn more about our investors."

Unlike the original-issue market for gift cards, exchanged gift cards come in discrete amounts (sometimes they are the unused credit from the originally issued amount, or sometimes they are merchandise credit for goods that were returned). For example, when I looked there were four cards from the retailer Ann Taylor, in face value amounts $197.53, $212.17, $235.44, and $257.09, all being offered at a 15% discount...



HT: Joshua Gans

Prizes for solutions to problems

An Australian firm, Kaggle, hosts problem solving and prediction competitions, and describes itself this way: "Kaggle is an innovative solution for statistical/analytics outsourcing. ...Companies, governments and researchers present datasets and problems - the world's best data scientists then compete to produce the best solutions. At the end of a competition, the competition host pays prize money in exchange for the intellectual property behind the winning model."

One of their current competitions requires participants to predict travel time on Sydney's M4 freeway from past travel time observations.

Other approaches for eliciting solutions to problems by offering prizes are found at Innocentive, and Challenge.gov, both of which list problems for which people can offer solutions for evaluation.