American economic association finances; legacy of Mark Perlman

An article in the Chronicle of Higher Education about the finances of academic professional societies brings back fond memories of my late Pittsburgh colleague Mark Perlman: Scholarly Groups' Choices Yield Diverging Fortunes.

""When new executive-committee members come on, I say, 'Let me explain the finances of the association,'" says John J. Siegfried, secretary-treasurer of the American Economic Association. "We have two products that subsidize everything else."
Most of that subsidy comes from the association's online database, EconLit; the other source is the association's jobs listings, which employers pay to post and which appear chiefly online. "It radically changes our business model," Mr. Siegfried says of EconLit, "though that's flattering it."
His breezy description of the association's economic model acknowledges how the quirks of history and personality can produce long-term consequences. Indeed, the economists' group owes much of its present fiscal strength to choices made decades ago. When asked how his scholarly association went about developing EconLit, Mr. Siegfried answered simply, "You have Mark Perlman."
Mr. Perlman, who died in 2006, was hailed for his encyclopedic knowledge of the discipline's philosophy, history, and institutions. He was an economist at the University of Pittsburgh in 1969, when the Journal of Economic Literature, which he founded, started publishing articles, book reviews, and a bibliography of scholarship in economics.
For several years, Mr. Perlman and association staff collected journals and manuscripts, piling them in eight-foot-high stacks in the narrow corridors of a dark, cramped space next to a beauty parlor on Forbes Avenue, near Pitt and Carnegie Mellon University.
"An earthquake in Pittsburgh would likely have led to our employees being crushed under economics journals," Mr. Siegfried wrote earlier this year in toasting the retirement of Dru Ekwurzel, who served as the association's director of publications.
In the early 1980s, Ms. Ekwurzel was instrumental in transferring tapes of journal citations, abstracts, and bibliographic material to an online information-retrieval service. Scholars would gain access to this database through a terminal and dial-up service at a subscribing library. In 1984 that database, named EconLit, made its debut at the association's annual meeting.
By the time the World Wide Web was born, the association was well positioned. In 2010, EconLit generated nearly $3.9-million in revenue from subscribing libraries and universities, or more than 40 percent of the association's budget.
The group's seven journals, available in print and online, are agenda setters for the field, but they also cost far more to produce than the income they generate. The group's annual meeting breaks even.
With a surplus of more than $1.2-million and income from EconLit and the job listings, the association chose recently to slash by more than half, to as little as $20, its fees for membership, in hopes of stemming a 13-percent decline in members since 2003.
"We have a strange situation of not hanging on by our fingernails," Mr. Siegfried says, "and I know others are."
**********
Mark passed away in May 2006.
Obituary: Mark Perlman / Prominent economist of post-World War II era

Professor Mark Perlman: Historian of economic thought

Same-sex divorce: A predictable repugnant transaction?

A same sex couple who got married in California when same-sex marriages were briefly legal there, wants to get divorced in Maryland, where they live. Both of them have agreed on the details of property etc. But a judge has ruled they can't divorce, since they couldn't get married in Maryland...A court’s conundrum: When same-sex partners want to split

"They both want to get divorced. But a Prince George’s County judge said they could not, reasoning that because same-sex marriage is not legal in the state, neither is same-sex divorce.


"Now the highest court in Maryland will decide whether he was right, and whether the women will be required to maintain a bond they’ve tried for almost two years to sever."

Dress exchange

Joshua Gans points out to me that now there's a dress exchange called 99dresses.comhttp://www.99dresses.com/ (which seems less complicated than kidney exchange).

FREE FASHION

and never wear the same thing twice!

Get Started It's FREE. Learn more about how it works.

1 UPLOAD

Upload your quality unwanted clothes, shoes and accessories into the Infinite Closet.

2 SELL

Sell your fashion to other girls for a virtual currency called buttons.

3 SPEND

Spend your buttons on anything you want in the Infinite Closet.  

School choice in Denver: early reports

Denver has rolled out its new school choice system, and here are some news stories about the results:

DPS school choice program accommodates most students
"In the first year using a new system that centralized school choice applications within Denver Public Schools, a vast majority of students were able to get into their top picks.
"We're seeing enrollment increases all across the city and are thrilled to be serving more Denver families and seeing the high level of participation in SchoolChoice," DPS Superintendent Tom Boasberg said

DPS’ SchoolChoice worked – for most
"Nearly 70 percent of the 23,000 families who participated in Denver Public Schools’ new streamlined enrollment process got into their top choice schools, DPS leaders announced Monday.
"Meanwhile, 80 percent got into their first or second choice school and 83 percent got a spot in their first, second or third choice.
"It was unclear whether the participation in school choice increased this year over previous years, but several parents interviewed said the system seemed more fair and easier to navigate – with less gaming of the system by well-connected parents."

And here's a video news report.

(And here's the IIPSC project page that includes Denver.)

MIT celebrates Parag Pathak

Game theory, in the real world: MIT economist Parag Pathak engineers practical solutions to complicated education problems

...
In 2003, New York City schools chancellor Joel Klein, who wanted to revamp the school-choice system, approached a Harvard University professor named Alvin Roth about the problem. Roth had studied the method for matching medical students to their residencies; New York officials hoped something similar would work for their school system.

In turn, Roth asked Pathak, then a first-year PhD student in economics, to look into New York’s school-choice system: Was it a substantive and interesting problem? Pathak decided it was. A decade later, he is still producing new research on the topic, and in 2011 received tenure at MIT, in part because of his work in the area.

Moreover, that work has produced real-world results. Based on the research of Roth and his collaborators, New York City soon adopted what is known as a “deferred-acceptance algorithm” to assign places. Then, Roth’s group, now including economist Tayfun Sonmez, helped Boston review its choice system, leading the city to adopt a new method in 2005.

Using this method, schools first weigh all the students listing those schools as first-choice venues; then, the students who are rejected are essentially allowed to revise their lists, and the process repeats until every student has been matched with a school selection. The crucial difference is that students and families can simply pick the schools they most want to attend, in order.

“Our whole agenda is to try to make these systems strategy-proof,” says Pathak, now an associate professor of economics at MIT. “All these methods move in the direction of simplifying the system for students.” Complicated tactical guesses about popularity are moot; the entire process is based on the substantive merits of schools.

This positive outcome, Pathak says, is the fruit of “trying to think of economics as an engineering discipline,” in order to construct practical solutions to real-world problems.

Within economics, his growing area of specialization is known as “market design.” Beyond schools, market-design problems can be found in health care, financial markets, even the process of keyword searching on the Internet. “These allocation problems are everywhere,” says Pathak, who now also studies school-performance questions and has produced papers examining the quirks of housing markets.

What makes schools good?


"Pathak is the son of Nepalese parents who immigrated to the United States in the 1970s. He grew up in Corning, N.Y., where his father is a doctor and his mother a writer, before attending Harvard as an undergraduate. A direct line can be drawn between Pathak’s career and a class he took during his senior year at Harvard in the spring of 2002, team-taught by Roth and Paul Milgrom, two leaders in market design; Milgrom advised the Federal Communications Commission on the design of their broadcasting-spectrum auctions.

Pathak, an applied mathematics major who graduated summa cum laude from Harvard, says that class allowed him to recognize the possibility of linking game theory with practical problems. He soon enrolled in graduate school in economics at Harvard, received his PhD in 2007 and joined MIT in 2008.

Since then, Pathak’s research on school-choice issues has expanded in part because other places, including Chicago and much of England, have adopted systems similar to the ones he endorses — but due to their own initiative. “It’s as if they followed the discussion in Boston, although there is no evidence of it,” Pathak says. “It’s a great story of how markets evolve.” 

Although strategy-proof systems are gaining in popularity, many cities do not employ them. And yet Pathak believes that in addition to making the selection process simpler, the new systems can lead to a virtuous circle in assessing school quality: If administrators know what students’ real preferences are — as opposed to their tactics-based selections — they can examine what makes certain schools popular and try to institute those elements of good schools in other places, too.

“If we have programs that are oversubscribed, we should figure out why and consider replicating them,” Pathak says.

To be sure, it can be very difficult for people to assess whether or not schools are good in the first place, and for what reasons. In part because of this, Pathak’s interests have developed to include measuring school performance. Along with MIT economists Joshua Angrist and David Autor, he is a founding director of the School Effectiveness &; Inequality Institute at MIT, a new center that launched this year.

Angrist, Pathak and a variety of co-authors have published multiple studies about the performance of charter schools in Massachusetts, for instance, using random samples of students from schools’ admissions lotteries. While recognizing that this can be a “politically charged” issue, Pathak says their aim is simply to shine some empirical light on the matter. So far, the results they have found are nuanced: Some charter schools in urban areas such as Boston have dramatically improved student performance, but charter schools in other parts of Massachusetts have generally performed worse than their non-charter public counterparts.

The researchers are still trying to determine exactly why this is, and aim to expand their studies geographically. But the technical expertise of Pathak and Angrist — a pioneer in developing and refining “natural experiments” in economics — makes them confident they can rigorously equitably assess thorny questions about student performance.

“Through school assignment, we have an engine to measure a lot of things about education production,” Pathak says. And now, students have a vehicle for choosing schools on their merits.
********

Let me add that, along with Atila Abdulkadiroglu and Neil Dorosin and yours truly, Parag continues to assist school districts in the design and implementation of school choice systems via the Institute for Innovation in Public School Choice (IIPSC).

Facebook promotes deceased organ donation

Facebook Is Urging Members to Add Organ Donor Status

"The company announced a plan on Tuesday morning to encourage everyone on Facebook to start advertising their donor status on their pages, along with their birth dates and schools — a move that it hopes will create peer pressure to nudge more people to add their names to the rolls of registered organ donors.


"It is a rare foray by Facebook into social engineering from social networking, and one with a potentially profound effect, according to experts in the field of organ donation.

"They say people declaring on Facebook that they are organ donors could spur others to sign up at motor vehicle departments or online registries. But these experts say Facebook could create an informal alternative to such registries that could, even though it carries less legal weight, lead to more organ donations.
"That is because a disclosure on Facebook could provide the evidence of consent that family members need when deciding whether to donate the organs of a loved one, said Dr. Andrew M. Cameron, the surgical director of liver transplantation at Johns Hopkins Hospital."
*********

And here's the Facebook page that explains how to do it (complete with instructional video): Sharing Your Organ Donor Status

HT: Judd Kessler, Peter Coles

*********
At The Atlantic, Megan Garber talked to several economists:
Organ Donation Is a Market Problem -- And Facebook May Have Just Solved It

Here's what she had to say about her conversation with me:

"I think it's great news that Facebook is going to encourage people to register as organ donors, and (maybe as important) to communicate to family and friends their intention," says Alvin Roth, an economics professor at Harvard who specializes in, among other things, market design and game theory -- both fields he has applied to his work with ... kidney exchange "We need to be facilitating all sorts of donation," he notes, "if we're going to turn the tide on the shortage of transplantable organs."

"When I started working on kidney exchange," Roth told me in an email, "there were 40,000+ patients on the waiting list for deceased donor kidneys. Today there are 90,000+." And while kidney exchange "is winning some important battles," he notes -- among other things, it's currently the fastest-growing part of kidney transplantation -- "we're losing the war." There simply aren't enough suppliers to fill the demand. But the advent of online registries, like that of Facebook partner Donate Life, can change those dynamics -- and Facebook's social platform can, in turn, amplify them.   "

The NSF celebrates kidney exchange

Over at Science Nation, the NSF  published a short news article yesterday, together with a video, to  note the success of NSF funded research in helping establish kidney exchange (also called kidney paired donation, KPD).

Here's the article:
New Software Matches More Kidney Donations, Faster: Game theory and market dynamics inspire new software that streamlines complicated matches

"With support from the National Science Foundation (NSF), Harvard University economist Alvin Roth helped develop a suite of computer programs that match living kidney donors with recipients. His team includes market designer Itai Ashlagi and operations researcher David Gamarnik at MIT and economists Utku Unver and Tayfun Sonmez at Boston College."
...
"Transplant surgeon Michael Rees at the University of Toledo Medical center is CEO of the Alliance for Paired Donation (see www.paireddonation.org) [says]
..."game theory and market design have come together to find practical solutions for kidney disease patients."

 And here's the 2-minute video:
(Key question in the video, read in an incredulous tone: "What's an economist doing organizing kidney transplants?" Answer: "Turns out, an understanding of game theory and market dynamics is key...")

Who gets what in medical resident matching

Here's a paper that reports on the many residency positions filled outside of the match, in large part by graduates of foreign medical schools. "In 2007, 1 in 5 positions in primary care was offered outside the match."

    Out-of-Match Residency Offers: The Possible Extent and Implications of Prematching in Graduate Medical Education.
    Wetz RV, Seelig CB, Khoueiry G, Weiserbs KF, J Grad Med Educ; 2010 Sep;2(3):327-33 
 *********

    Another paper reports that students from higher prestige American schools match disproportionately into "controllable lifestyle" specialties ("anesthesiology, dermatology, emergency medicine, neurology, ophthalmology, otolaryngology, pathology, psychiatry, and radiology") ...

    Match rates into higher-income, controllable lifestylespecialties for students from highly ranked, research-based medical schoolscompared with other applicants.
    Patel MS, Katz JT, Volpp KG,  J Grad Med Educ; 2010 Sep;2(3):360-5 

 ***************

    And here's my paper on the history of the match...

    Roth, Alvin E., "The origins, history, and design of the resident match, JAMA. Journal of the American Medical Association, vol. 289, No. 7, February 19, 2003, 909-912.

Home exchanges

In the WSJ, a retired California couple discuss the (approaching three dozen) home exchanges they have done, bartering a stay at their San Diego condo for visits of a few weeks to a month all over the world, via two networks, homeexchange.com and homelink.org.

"Exchanging homes involves some negotiating. Your leverage depends on the desirability of the home you have to exchange. In the U.S., New York, San Francisco and Washington, D.C., are favorites of international exchangers. After that, there is a second tier of cities, which includes San Diego.

"(One tricky area in negotiations: whether to exchange cars. Our preference is to rely on local transportation. Some cities, like Paris and London, have great public transportation. Unfortunately, San Diego doesn't, and our exchange partners feel strongly that we need to exchange cars. We've done so about half the time.)
...
"On each Internet site, we have a page with photos of our home, information about San Diego and ourselves, and details about when, where and with whom we want to exchange. Once we make contact with a potential partner, we discuss details of dates, number of people, transportation, etc. On average, an exchange takes about 20 emails and an occasional phone call to work out all the arrangements.
...
"We are often asked if we have any problems with our exchanges. We do. The biggest problem is cancellations. Since our first choice is to exchange with other older adults, unexpected medical problems can be an issue. With younger exchangers, you can encounter job or financial problems. In a few cases, my guess is that people cancel because they get a better offer—but they never admit that.

"We have had seven cancellations in connection with our 32 exchanges. Fortunately, all except one were early enough that we hadn't made plane reservations and could arrange alternative exchanges."

The OPTN Kidney Paired Donation Program --progress report, April 2012

Since opening for business in late 2010, the UNOS/OPTN kidney exchange pilot program has succeeded in enrolling many transplant centers. But so far it has not completed many transplants compared to other kidney exchange networks. (What to do about this was one subject of the recent conference I blogged about here: Competition among kidney exchanges.)

Here's the latest report from UNOS: Everything You Wanted to Know about the OPTN Kidney Paired Donation Program
"The OPTN kidney paired donation pilot program (KPDPP) continues to expand; as of mid-April, 114 transplant centers are participating – view list. The goal is to increase the number of living donor kidney transplants, so center participation is crucial to the success of the national KPD program. Results from recent match runs indicate an upward trend in the number of donors and candidates matched. In the match run conducted in March, 24 matches of compatible potential donors and recipients were found from a pool of 163 donors and 145 candidates, about twice as many matches as the previous month. So far, 19 kidney candidates have received a transplant in the program as of mid-April. "
************

The page at the link contains a link to some background reports, including the one below which (together with the comments) gives some insights into the kind of debates about kidney exchange policies that have been going on at the program:

• Board briefing paper: proposal to include non-directed donors and donor chains in the KPD pilot program  

And here is some of the evidence that long chains are good for kidney patients, particularly for highly sensitized patients:

• Ashlagi, Itai, Duncan S. Gilchrist, Alvin E. Roth, and Michael A. Rees, ; ''Nonsimultaneous Chains and Dominos in Kidney Paired Donation -- Revisited,'' American Journal of Transplantation, 11, 5, May 2011, 984-994.
• Ashlagi, Itai, Duncan S. Gilchrist, Alvin E. Roth, and Michael A. Rees, "NEAD Chains in Transplantation," American Journal of Transplantation, December 2011, 11:2780-2781.

Jacob Leshno defends his Ph.D. dissertation

Defense 4

Dr. Jacob Leshno (in suit:), and Al Roth, Susan Athey, and Ariel Pakes (Drew Fudenberg on skype)

And here is what the picture would have looked like if Drew had used photoshop instead of skype:

Drew looks on approvingly (in a photo doctored by the new doctor...)

The title of Jacob's dissertation is Essays in Market Design.  (How cool is that?)

The three papers he chose to include in his dissertation are

Dynamic Matching in Overloaded Systems (Job Market Paper)

In many assignment problems items arrive stochastically over time. When items are scarce agents form an overloaded waiting list and items are dynamically allocated as they arrive; two examples are public housing and organs for transplant. Even when all the scarce items are allocated, there is the efficiency question of how to assign the right items to the right agents. I develop a model in which impatient agents with heterogeneous preferences wait to be assigned scarce heterogeneous items that arrive stochastically over time. Social welfare is maximized by appropriately matching agents to items, but an individual impatient agent may misreport her preferences to receive an earlier mismatched item. To incentivize an agent to avoid mismatch, the policy needs to provide the agent with a (stochastic) guarantee of future assignment, which I model as putting the agents in a priority buffer-queue. I first consider a standard queue-based allocation policy and derive its welfare properties. To determine the optimal policy, I formulate the dynamic assignment problem as a dynamic mechanism design problem without transfers. The resulting optimal incentive compatible policy uses a buffer-queue of a new queueing policy, the uniform wait queue, to minimize the probability of mismatching agents. Finally, I derive a robustly optimal policy which uses a simple rule: giving equal priority to every agent who declines a mismatched item (a SIRO buffer-queue). This robustly optimal policy has several good properties that make it a compelling market design policy recommendation.

A Supply and Demand Framework for Two-Sided Matching Markets, with Eduardo Azevedo
(Extended abstract published in EC11 under the former name: "The college admissions problem with a continuum of students" )

We give a version of the Gale and Shapley (1962) college admissions problem where colleges have a large capacity and show that the resulting model allows for tractable analysis of matching markets. When colleges are large stable matchings can be described concisely by cutoffs, the admission thresholds at each college. Under broad conditions the model corresponds to the limit of large discrete matching problems.

Will a Decrease In The Minimum Wage Improve Training?, with Michael Schwarz

We show that firms that have a cost advantage in providing training can recoup training cost even in an almost frictionless labor market. Lowering the minimal legal wage can reduce the efficiency of training and harm welfare. In our model training contracts give positive surplus to workers that is not competed away. This explains the existence of intermediary services that essentially sell internship positions to college graduates.

Jacob is one of the group of job market candidates I blogged about here: Five Harvard candidates for the Economics job market this year (2011-12)

He will be going next year to a postdoc at Microsoft Research in Cambridge, after which he'll take up a position at Columbia GSB.

This concludes my defenses for the week (and the Offense never even got a point up on the board...)

Welcome to the club, Jacob.

Eduardo Azevedo defends his Ph.D. dissertation

Defense 3

Eduardo Azevedo (in suit:) having just fended off his committee: from left, Eric Budish, Al Roth, Oliver Hart, Susan Athey, Andrei Shleifer

Eduardo chose the following three of his papers to constitute his dissertation:

A Supply and Demand Framework for Two-Sided Matching Markets (Job Market Paper #1)
with Jacob Leshno
extended abstract published in EC11

Strategyproofness in the Large as a Desideratum for Market Design (Job Market Paper #2)
with Eric Budish

Evolutionary Origins of the Endowment Effect - Evidence from Hunter-Gatherers (PDF available upon request)
with Coren Apicella, Nicholas Christakis, and James Fowler

I earlier blogged about two of those papers:

A supply and demand model for stable matchings, by Eduardo Azevedo and Jacob Leshno
and

Market design in a future of trusted smart markets: paper by Eduardo Azevedo and Eric Budish

Eduardo is one of the group of job market candidates I blogged about here: Five Harvard candidates for the Economics job market this year (2011-12)

As I write it isn't clear whether he'll be working next year in Philadelphia, NYC, or Chicago, which will depend on his fiance's jobmarket, which is still to be concluded.

Welcome to the club, Eduardo.
*********
Update: May 11--It's Wharton.

Boston kindergartens and preschool places

Boston is short of good public kindergarten places. This in turn creates a demand for preschool places, since preschool kids move up automatically to kindergarten in the same school, so even parents who wouldn't ordinarily send their kid to preschool may be tempted to do so since it gives them two chances at a good kindergarten.

Rise in kindergarten demand leaves many in city scrambling: Hundreds of students remain unassigned

"Demand for kindergarten seats in the Boston Public Schools for this fall has risen by more than 25 percent, an unanticipated increase that has left hundreds of students without an assigned school and has prompted officials to add more classrooms.

The enrollment boom surfaced in the past few months during the first round of registration for kindergarten classrooms that will serve students who will be 5 by Sept. 1. The School Department received 2,306 such applications, up from 1,823 during that same period last year.
...
"Predicting kindergarten enrollment in a city as large as Boston can be a tricky endeavor, school officials say. The transient nature of the city - with many young, middle-class families moving out and a number of immigrant families moving in - creates volatility in relying on birth rates.

"The city school system also faces immense competition for kindergarten students from dozens of private and parochial schools and a growing number of independently run public charter schools. City school officials often do not know until after the school year begins if all the kindergarten students offered a seat will show up
...
"The School Department is trying to respond to the rising demand by adding a kindergarten classroom at five schools: Umana Academy in East Boston, Harvard-Kent in Charlestown, Mission Hill in Jamaica Plain, and Haley Elementary and Sumner Elementary, both in Roslindale.

"Kindergarten is not the only grade experiencing a rise in applications. The city’s preschool program for 4-year-olds also has an increase, with 2,518 applications filed during the first registration cycle, compared with 2,070 during the same period last year. That has left 745 4-year-olds without preschool assignments, an increase of 513 from last year.

The city is not obligated under state law to make a seat available for all preschool students who apply, as it is with kindergarten.
...
"Margaret Day’s 4-year-old son is near the bottom of waiting lists at three schools for preschool, leaving little chance of admittance. Now, the Jamaica Plain mother is resigned to going through the lottery again next year for kindergarten, even though many seats will be snatched up as preschoolers move up. She said she does not understand how the School Department was “blindsided’’ about the enrollment increase, and is pushing for changes.

“We are going to be picking through the bones to get a good seat next year,’’ Day said. “The reason we went through the [preschool] lottery is because of the difficulty of getting into kindergarten.’’

Game theory in Operations Research

The venerable journal Operations Research has a new subject area, with distinguished area editors:

Games, Information, and Networks

David Gamarnik and Asu Ozdaglar, editors

Networks have become pervasive in every aspect of our lives and have emerged as a crucial tool for understanding the world we live in. The World Wide Web, which links us to and enables information flows with the rest of the world, is the most visible example. Physical networks play a similarly vital role in wireless communication, data transmission, and energy production and distribution. Equally central are social and economic networks that shape opinions, information flows, and transactions. A fundamental understanding of network behavior, including the nature of interconnections, issues of stability, and decision making place operations research methodology at the core of this emerging research program.

We invite high-quality submissions that advance the theory and application of operations research methods, including graph theory and optimization, economic analysis, game theory, and stochastic models, in the emerging field of network science. In addition to works contributing to the analysis of networks, we also encourage submissions using tools and concepts from network analysis in other application domains.

Associate Editors: Mung Chiang, Ayalvadi Ganesh, Ali Jadbabaie, Ramesh Johari, Andrea Montanari, Yannis Paschalidis, Devavrat Shah, Sanjay Shakkottai, and Adam Wierman

I'm hopeful that this may mark a return to a high level of interaction between game theorists and the operations research community. (Market design seems like an area that is ripe for this kind of interaction.)

Yuichiro Kamada defends his Ph.D. dissertation

Defense 2 (Offense 0)

Yuichiro (in suit:), with Tomasz Strzalecki and Al Roth (and Drew Fudenberg and Attila Ambrus via skype)

Yuichiro with the full defense team

Yuichiro had to choose three out of his many papers for his dissertation, which he called "Essays on Revision Games." Those papers all concern the difficult problem of analyzing incentives in non-stationary environments.

Multi-Agent Search with Deadline (joint with Nozomu Muto), December 31, 2011.(An earlier version of this paper referred to in the new version is here)

Revision Games (joint with Michihiro Kandori), December 31, 2011

Asynchronicity and Coordination in Common and Opposing Interest Games (joint with Riccardo Calcagno, Stefano Lovo, and Takuo Sugaya), March 2012, Revise and Resubmit, Theoretical Economics. (This paper is a result of a merger between two independent papers: Preopening and Equilibrium Selection by Calcagno and Lovo, and Asynchronous Revision Games with Deadline: Unique Equilibrium in Coordination Games by Kamada and Sugaya)

I earlier blogged about another of his papers, on the design of the market for new Japanese doctors:

Matching Japanese Doctors: problems with the current mechanisms, and suggestions for improvement by Yuichiro Kamada and Fuhito Kojima

Yuichiro is one of the group of job market candidates I blogged about here: Five Harvard candidates for the Economics job market this year (2011-12)

 He will be going next year to a postdoc at Yale, after which he'll take up a position at Berkeley-Haas.

Two more defenses are coming up this week.

 Welcome to the club, Yuichiro.

Katie Baldiga defends her Ph.D. dissertation

Defense 1 (Offense 0)

Katie Baldiga and her committee of admirers: Iris Bohnet, Al Roth, Jerry Green (and Drew Fudenberg via skype)
(Alternative caption: Katie B. got her Ph.D.)

The three papers in Katie's dissertation are so wide ranging that she characterizes them together as "Essays in Microeconomics." (I blogged about her experimental paper here.)

A Failure of Representative Democracy (Job Market Paper 1) 
In this paper, we study representative democracy, one of the most popular classes of collective decision-making mechanisms, and contrast it with direct democracy. In a direct democracy, individuals have the opportunity to vote over the alternatives in every choice problem the population faces. In a representative democracy, the population commits to a candidate ex ante who will then make choices on its behalf. While direct democracy is normatively appealing, representative democracy is the far more common institution because of its practical advantages. The key question, then, is whether representative democracy succeeds in implementing the choices that the group would make under direct democracy. We find that, in general, it does not. We analyze the theoretical setting in which the two methods are most likely to lead to the same choices, minimizing potential sources of distortion. We model a population as a distribution of voters with strict preferences over a finite set of alternatives and a candidate as an ordering of those alternatives that serves as a binding, contingent plan of action. We focus on the case where the direct democracy choices of the population are consistent with an ordering of the alternatives. We show that even in this case, where the normative recommendation of direct democracy is clear, representative democracy may not elect the candidate with this ordering.

Gender Differences in Willingness to Guess and the Implications for Test Scores (Job Market Paper 2) 
Multiple-choice tests play a large role in determining academic and professional outcomes. Performance on these tests hinges not only on a test-taker's knowledge of the material but also on his willingness to guess when unsure about the answer. In this paper, we present the results of an experiment that explores whether women skip more questions than men. The experimental test consists of practice questions from the World History and U.S. History SAT II subject tests; we vary the size of the penalty imposed for a wrong answer and the salience of the evaluative nature of the task. We find that when no penalty is assessed for a wrong answer, all test-takers answer every question. But, when there is a small penalty for wrong answers and the task is explicitly framed as an SAT, women answer significantly fewer questions than men. We see no differences in knowledge of the material or confidence in these test-takers, and differences in risk preferences fail to explain all of the observed gap. Because the gender gap exists only when the task is framed as an SAT, we argue that differences in competitive attitudes may drive the gender differences we observe. Finally, we show that, conditional on their knowledge of the material, test-takers who skip questions do significantly worse on our experimental test, putting women and more risk averse test-takers at a disadvantage.

Assent-Maximizing Social Choice with Jerry R. Green, forthcoming in Social Choice and Welfare
We take a decision theoretic approach to the classic social choice problem, using data on the frequency of choice problems to compute social choice functions. We define a family of social choice rules that depend on the population's preferences and on the probability distribution over the sets of feasible alternatives that the society will face. Our methods generalize the well-known Kemeny Rule. In the Kemeny Rule it is known a priori that the subset of feasible alternatives will be a pair. We define a distinct social choice function for each distribution over the feasible subsets. Our rules can be interpreted as distance minimization -- selecting the order closest to the population's preferences, using a metric on the orders that reflects the distribution over the possible feasible sets. The distance is the probability that two orders will disagree about the optimal choice from a randomly selected available set. We provide an algorithmic method to compute these metrics in the case where the probability of a given feasible set is a function only of its cardinality.

Katie is one of the group of job market candidates I blogged about here: Five Harvard candidates for the Economics job market this year (2011-12).

She and her significant other LC solved the two-body problem this year (!), and will be together at The Ohio State University, which is now more than ever a hotbed of experimental economics.

Three more defenses are coming up this week.

Welcome to the club, Katie.

How to evaluate school choice: Daily Telegraph

The Daily Telegraph has an article about school choice in Britain that uses what strikes me as a tricky standard to declare that something is rotten in Britain:

Children 'forced to accept unpopular secondary schools': Almost 75,000 children have been rejected from their preferred secondary school amid a desperate scramble for the most sought-after places, official figures show.

The article goes on to say
"More than one-in-seven pupils across England are being forced to accept second, third or fourth-choice schools this September, it emerged.
...
"According to figures, some schools in parts of London received as many as nine applications for every place.

"Mr Gibb said: “I want us to reach a position where it is parents choosing schools, not schools choosing parents."
************
And here's a similar article about younger kids: More children rejected from first-choice primary school

"Among councils that provided year-on-year figures, some 90 per cent reported an increase in applications in 2012 compared with 2011.
"In those areas, almost 14 per cent of four and five-year-olds failed to get into their first choice school
***********
Britain would not be alone in having a shortage of good schools, but the point I want to raise about these articles is that the statistics mentioned could instead indicate that Britain has a few remarkably good schools that are oversubscribed. That would be something quite different, but it would still mean that many students didn't get one of their top choices.

Matching Mechanisms, Market Design Seen as Tools to Address Inequality

A conference in Chicago, this past February, organized by Scott Kominers:
Here's the press release-- http://ineteconomics.org/research-programs/human-capital-and-economic-opportunity/press-release-2 --and here's the list of talks:

Program

Download schedule» (.pdf)

9–9:40 a.m.	"Consumption and Income Inequality in the U.S. Since the 1960s" Bruce D. Meyer (joint work with James X. Sullivan)
9:40–10:20 a.m.	"Dismantling the Legacy of Caste: Affirmative Action in Indian Higher Education" Dennis Epple (joint work with Surendrakumar Bagde and Lowell J. Taylor)
10:20–10:35 a.m.	Break
10:35–11:15 a.m.	"Promoting School Competition Through School Choice: A Market Design Approach" John William Hatfield (joint work with Fuhito Kojima and Yusuke Narita)
11:15–1:55 a.m.	"School Admissions Reform in Chicago and England: Comparing Mechanisms by Their Vulnerability to Manipulation" Tayfun Sonmez (joint work with Parag Pathak)
1–2 p.m.	Invited Address: "Matching with Evolving Human Capital" Lones Smith (joint work with Axel Anderson)
2:00–2:15 p.m.	Break
2:15–2:55 p.m.	"Effective Affirmative Action in School Choice" M. Bumin Yenmez (joint work with Isa E. Hafalir and Muhammed A. Yildirim)
2:55–3:35 p.m.	"Matching with Slot-Specific Priorities: Theory and Applications" Scott Duke Kominers (joint work with Tayfun Sonmez)
3:35–3:50 p.m.	Break
3:50–4:30 p.m.	"Do Parents Choose under the Boston Mechanism?" Caterina Calsamiglia (joint work with Maia Guell)
4:30–-5:10 p.m.	"Homophily and Transitivity in Dynamic Network Formation" Bryan Graham

Online labor markets

John Horton, who has an online labor blog, has compiled a great list of online labor markets. Here's what it looked like when I recently checked:

Resources

• "Enlisting a Global Work Force of Freelancers," New York Times, June 24th, 2009
• "The End of the Office...And the Future of Work," Boston Globe,  January 17th, 2009
• "The Future of Work," Thomas Malone, Harvard Business School Press, 2004

Major General / Programming Sites

• oDesk is a rapidly growing site that encourages buyers to offer work on hourly terms. The site provides very robust monitoring tools: workers download software that tracks the time that they spend working on projects. The software also logs workers' keystrokes and even periodically takes screenshots of their screens. Because this monitoring allows buyers to observe workers so closely. Workers are guaranteed payment for their hourly work. 
• Guru.com allows buyers to post jobs and solicit bids from workers. 
• Elance is probably the largest and most well-known general site. The main work categories are Web & Programming, Design & Multimedia, Writing & Translation, Administration Support, Sales & Marketing, Finance & Management, Engineering & Manufacturing and Legal. 
• rentAcoder.com focuses on computer programming. Programmers work on a strictly fixed-price basis. After a project is awarded to a bidder, the buyer places the agreed upon amount in an escrow account. Payment is not released until the buyer approves the work. If there are disputes, the company provides arbitrators.
• Freelancer.com 
• iFreelance is a general site with the same basic model as Guru, oDesk and Elance. Very little data is available without registering with the site.
• ScriptLance
• Solvate - TBD 
• Hypios - TBD

Software Testing

• uTest provides software testing using a pool of workers who are paid to find bugs. Buyers (software companies) seek testers with certain demographic characteristics, including software sophistication and the platforms used. uTest selects matches from its pool of registered testers. The testers report bugs and make suggestions and are paid for verified bugs and helpful reviews.

Design

• 99 Designs allows buyers to sponsor design contests, usually for logos or specialty events. The buyer states a price that they will pay for the winning design and a date when they will choose the winner. Workers then submit designs as small, thumbnail images which the entire community can view and vote on (these votes are not in any way binding). One interesting feature of this market is that it is one of the few real-life examples of non-political all-pay auctions. As of January 2009, the community had 25,100 registered designers who submitted 1,152,786 designs for 15,993 contests and received $3,465,314 in prizes.
• CreateMyTattoo.com is just like 99 Designs, but for tattoos.
• CrowdSPRING
• iStockPhoto is a royalty-free photo exchange that allows photographers to upload images and sell them to individual buyers. Over 50,000 photographers have contributed over 4 million photos.

Advice & Search

• BitWine provides a network of freelance advisors who charge clients a per-minute rate for consultations. Advisors are ostensible experts in some field, such as nutrition, travel, coaching, technology, etc. Consultations occur over the voice-over-IP (VoIP) technology Skype and payments are made through PayPal. BitWine takes a percentage of transactions fees.
• InnoCentive
• ChaCha

Advertising

• Prova

Micro-Tasks

• Amazon's Mechanical Turk is unique in allowing workers to perform simple, piece-rate tasks like captioning writing captions for photographs, extracting information from scanned documents and transcribing audio clips for money or store credit. Unlike other sites, workers may begin a task as soon as it is posted, and the buyer reserves the right to accept or reject work.
• LiveWork
• Short Task
• Clickworker

Patent Validation / Invalidation

• Article One Partners is a private firm that helps corporate clients invalidate patents. A network of "AOP Associates" who have registered with the site can earn up to $50,000 for providing evidence of patent-invalidating "prior art."
• Peer-to-Peer Patent Project also provides patent assessment, but it is not a true contest or market. The project is sponsored by the US Technology and Patent Office and NYU Law School and patent reviewers are not paid.

Finance

• LendingClub facilitates unsecured lending between individuals.
• Kiva
• Prosper.com is a for-profit peer-to-peer lending site similar to LendingClub. As of January 2009, the site claims 830,000 members and $178,000,000 of loans.

Enabling Techologies and Organizations

• BrainBench
• CrowdFlower/Dolores Labs 
• Payoneer
• PayPal
• txteagle
• Samasource
• Crowdsortium

Interested Third Parties

• Turk Opticon is a website and Firefox plug-in that allows Amazon Mechanical Turk workers to rate "Requestors" who post work on the site. The Firefox plug-in allows workers to view the ratings in real time before deciding whether or not to accept a task from the requestor.

College admissions committees and how they work

Inside Higher Ed has a story: How They Really Get In, based on surveys of selective colleges and universities conducted by by Rachel B. Rubin, a doctoral student in education at Harvard.

"Almost all of the colleges that provided information first do a winnowing of one of two sorts that yields the group that gets a more thorough review. The most common winnowing process (used by 76 percent of the colleges that answered Rubin) is some measure of academic merit. This may be based on grades, rigor of high school courses, test scores and so forth. While there is some difference in the relative weight given to various factors, there is a straightforward value on doing better than others in whatever formula the college uses.

"A minority of elite colleges and universities (21 percent) starts off on measures of "institutional fit." These colleges do the initial cut based on student essays, recommendations and specific questions of whether particular students will thrive at and contribute to the college in various ways. In an interview, Rubin said she believed that these colleges also valued academic merit, but that the vast majority of applicants had an appropriate level of academic merit, so that could be weighed later, while other parts of "creating a class" needed to dominate at the point of first cut.

"For those colleges that look at institutional fit first, the two most favored factors are underrepresented minority status and "exceptional talent" (which she said could mean many things: "lacrosse recruits, flautists, etc.").

...

"Rubin's paper says that whether the first cut is done through academics or fit, most colleges then report a more formal system in which two readers review the application portfolio, with a third reader or an entire team involved in difficult calls. At this stage, academic issues are discussed at institutions that started with "fit" issues, and "fit" is discussed at places that started with academics. "

Long college waiting lists are long shots...

In case you didn't know: Colleges' Tough Waiting Game: Schools Keep Hundreds of Applicants on Reserve Lists, but Very Few of Them Get In

"Carnegie Mellon University in Pittsburgh admitted just six of 5,003 applicants invited onto its waitlist last year. At Cornell University, in Ithaca, N.Y., not one of 2,998 students offered a spot on last year's list was admitted. Princeton, which accepted 2,095 students for a record-low 7.86% admission rate this year, offered 1,472 applicants places on its waitlist. In the past six years, it has taken as few as zero from the list, or as many as 164.

"Many colleges are reluctant to disclose the number of students on their waitlists. Harvard, which admitted a record-low 5.9% of applicants this year, doesn't release the size of its list. A Harvard spokesman said it accepted 31 from the waitlist last year, and between 49 and 228 in the four years prior to that."

"Most schools know by May 1 who has accepted their initial offers of admission. They then turn to the waitlist to fill any remaining slots, a process that is supposed to wrap up by Aug. 1, a deadline set by the National Association for College Admission Counseling. On average, 45% of students offered spots on a waitlist accept, said the Princeton Review."

School Choice in New Orleans with top trading cycles

Something exciting is happening in New Orleans Recovery School District: a novel school choice algorithm is being tried out for the first time. And it's being rolled out with some pretty good communications to the community. Here's a story by Andrew Vanacore in The Times-Picayune yesterday: Centralized enrollment in Recovery School District gets first tryout

The newspaper story even comes with a graphic meant to convey an important piece of the top trading cycle algorithm:

"Somewhere inside the jumble of narrow beige corridors on Poland Avenue in the Upper 9th Ward, in the state-run Recovery School District's headquarters, someone will hit a button on a computer in the next few weeks, and presto: Almost all of the roughly 28,000 students in New Orleans who applied for a seat this fall at one of the district's 67 schools will be assigned a place. With that final keystroke, the school system will move for the first time from a frustrating, ad-hoc enrollment process handled at individual campuses to one centralized at district offices.


"Every child will get a spot. But because schools don't have an infinite number of seats and some schools will doubtless prove more popular than others, not every family will get their top pick. More than likely, some small percentage won't get any of the eight choices they ranked when they filled out their application earlier this year.

"So it's worth considering: Who will decide the fates of these 28,000 students? In a district unique for giving children the right to pick the school they attend, instead of the right to attend the school down the street, who decides what's fair?

"The short answer is nobody, or at least nobody with a pulse. As the technical experts working with the Recovery District explained to a group of community groups and reporters last week, a computer algorithm will go to work trying to match every student with a school that's as high on their list as possible. Students with siblings at a particular school will get a first shot at open seats at that school, followed by those living nearby. But much will hinge on a randomly assigned lottery number.

"This, officials say, will give the greatest possible number of students as close to their top choice as possible in a way that's fair and transparent.

"For parents, there are some key ideas to keep in mind. The experts who developed the algorithm -- folks from Duke, Harvard and MIT -- say there is no way to game the system. If what you really want is a seat at KIPP Renaissance High School, you should not rank Sci Academy first, thinking that you're more likely to get your second choice. Ranking KIPP as your top choice gives you your best shot at getting in. 

"There's also no way to lose a seat that your child already has. If a second-grader at School A applies for a transfer to School B and doesn't win a spot, he will automatically remain where he is.

"For now, there's no way of telling which percentage of families will get their top choice, but a small number will almost certainly get none of the eight schools they ranked on their application. That's simply because they were unlucky in the assigning of lottery numbers, picked eight very popular schools or both.

"Until all of our schools are equally amazing, not every family is going to get everything they want," said Neil Dorosin, founder of the Institute for Innovation in Public School Choice, which helped develop the new process."

...

"Another important caveat: The 17 schools that are still overseen by the Orleans Parish School Board will not be included. "That's the missing link, " said Debra Vaughan, a researcher at the Cowen Institute. It means students who want to reach for a spot at one of the city's prestigious magnet schools still have to navigate two separate enrollment systems. The Recovery District and the School Board have been in talks but haven't reached an agreement on how to merge the systems."

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

Previous posts on New Orleans schools (most recent first):

New Orleans launches its new school choice process

School choice design in New Orleans Recovery School District

Centralized enrolment in New Orleans public schools

School choice in New Orleans

How to finance kidney exchange?

In kidney exchange (also called kidney paired donation), potential donors have to be evaluated without knowing what patient, if any, their kidney might go to. So...how should those donor evaluation costs be paid for, since they can't be billed to a particular patient's insurance? (This is particularly so for donors who don't proceed to transplant, e.g. because their costly CT scan reveals an anatomical abnormality: so that's a hard to recover cost.) Below, from Pub Med, is the abstract of a paper proposing a solution like the one reached for deceased donors. (The full paper is still under embargo as it hasn't appeared yet in the print version of the American Journal of Transplantation (but you can see the abstract for free here); I'll post a version when I can...)

Call to Develop a Standard Acquisition Charge Model for Kidney Paired Donation.

Rees MA, Schnitzler MA, Zavala EY, Cutler JA, Roth AE, Irwin FD, Crawford SW, Leichtman AB., Am J Transplant. 2012 Apr 9. doi: 10.1111/j.1600-6143.2012.04034.x. [Epub ahead of print],

Abstract

We propose a Medicare Demonstration Project to develop a standard acquisition charge for kidney paired donation. A new payment strategy is required because Medicare and commercial insurance companies may not directly pay living donor costs intended to lead to transplantation of a beneficiary of a different insurance provider. Until the 1970s, when organ procurement organizations were empowered to serve as financial intermediaries to pay the upfront recovery expenses for deceased donor kidneys before knowing the identity of the recipient, there existed similar limitations in the recovery and placement of deceased donor organs. Analogous to the recovery of deceased donor kidneys, kidney paired donation requires the evaluation of living donors before identifying their recipient. Tissue typing, crossmatching and transportation of living donors or their kidneys represent additional financial barriers. Finally, the administrative expenses of the organizations that identify and coordinate kidney paired donation transplantation require reimbursement akin to that necessary for organ procurement organizations. To expand access to kidney paired donation for more patients, we propose a model to reimburse paired donation expenses analogous to the proven strategy used for over 30 years to pay for deceased donor solid organ transplantation in America.
© Copyright 2012 The American Society of Transplantation and the American Society of Transplant Surgeons.