Blockchain job, with Sven Seuken, at Worldcoin

 Sven Seuken, a practical market designer for whom I have great respect, writes to ask that I advertise a job for a market designer.  Here is his email.

"I was wondering if you could advertise a market designer job on your blog. About six months ago, I have joined the Blockchain start-up Worldcoin (https://worldcoin.org/) and am now their Head of Economics and Chief Economist. We already have a team of six economists and computer scientists. But we are currently greatly expanding our team, looking for market designers, crypto economists, experimental economists, statisticians, etc., who are interested in developing practical incentive mechanisms that scale to more than a billion participants of the Worldcoin network. I believe that this is a fantastic opportunity for anyone interested in applying market design in practice. The positions are available on the junior and senior level, and they are available full-time or part-time. Anyone interested can contact me directly, or even better, directly apply here: https://worldcoin.org/job/4111358004

 Thank you very much!

Best,

Sven

 Prof. Dr. Sven Seuken

Head of Computation and Economics Research Group

University of Zurich

 Web: https://www.ifi.uzh.ch/en/ce/people/seuken.html

 Associated Faculty at the ETH AI Center

Co-Director of the Zurich Center for Market Design

Head of Economics and Chief Economist at Worldcoin"

Counterbalancing Learning and Strategic Incentives in Allocation Markets by Kang, Monachou, Koren, and Ashlagi

 Here's a model with a new perspective on deceased organ waiting lists...

Counterbalancing Learning and Strategic Incentives in Allocation Markets by Jamie Kang, Faidra Monachou, Moran Koren, and Itai Ashlagi

Abstract: Motivated by the high discard rate of donated organs in the United States, we study an allocation problem in the presence of learning and strategic incentives.We consider a setting where a benevolent social planner decides whether and how to allocate a single indivisible object to a queue of strategic agents.  The object has a common true quality,  good or bad,  which is ex-ante unknown to everyone.  Each agent holds an informative, yet noisy, private signal about the quality.  To make a correct allocation decision the planner attempts to learn the object quality by truthfully eliciting agents’ signals. Under the commonly applied sequential offering mechanism, we show that learning is hampered by the presence of strategic incentives as herding may emerge. This can result in incorrect allocation and welfare loss. To overcome these issues, we propose a novel class of incentive-compatible mechanisms.  Our mechanism involves a batch-by-batch, dynamicvoting process using a majority rule. We prove that the proposed voting mechanisms improve the probability of correct allocation whenever agents are sufficiently well informed. Particularly, we show that such an improvement can be achieved via a simple greedy algorithm. We quantify the improvement using simulations.

The labor market that is the United States Marine Corps

 Armed forces around the world have some unique labor force problems, since by and large they do no lateral hiring...every senior officer was once a junior officer. (Doctors and lawyers are exceptions in the U.S. services--they can enter at a high rank without having spent years learning when and whom to salute...)  As we start to think about other specialties (e.g. cyber warriors, economic warriors), lateral hiring may become more important.  

A related problem faced by armed forces is retention: if all senior personnel have to be brought up through the system, it's especially costly to lose a (therefore) hard to replace, expensively trained operator.  Intelligent matching of people to positions is important for retention, particularly as they become more senior and have no further military service obligation (i.e. as their private sector opportunities become more salient).

The US Marines are thinking about this, and here's a recent report:

Talent Management 2030 November 2021, Department of the Navy, United States Marine Corps

Here are some highlighted snippets:

"The  core  objectives  of  all  modern  personnel  management  systems  are  to  recruit  individuals  with  the  right  talents,  match  those  talents  to  organizational  needs,  and  incentivize  the  most  talented and high performing individuals to remain with the organization"

"Our modern operational concepts and organizations cannot reach their full warfighting potential without a talent management system that recruits, develops, and retains the right Marines."

"Matching talents to duties maximizes performance."

"Incentives power the system."

"In this current era of heightened global competition, the Marine Corps requires a vehicle for rapidly recruiting mature, seasoned experts. We can no longer afford the cost in time – measured in years, and sometimes decades – to train and educate all our technical leaders, particularly given the extraordinary pace of technological change."

"We should have an open door for exceptionally talented Americans who wish to join the Marine Corps, allowing them to laterally enter at a rank appropriate to their education, experience, and ability."

"For Marines, a talent marketplace will increase available information about billet openings, improve transparency, and provide individuals with far greater influence over their future assignments."

"A talent management system relies on incentives, not coercion. While the needs of the Marine Corps are always paramount, we cannot afford to push the most talented young officers out the door after investing years in their leadership development, education, and training. "

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

Earlier (including some obstacles to implementing effective talent marketplaces):

Tuesday, December 1, 2020

The labor market that is the military: a report from the National Academies of Science, Engineering, and Medicine

Marijuana black markets are coexisting with (poorly designed, over-regulated, highly taxed) legal markets in California

 The Guardian has the story:

California legalized weed five years ago. Why is the illicit market still thriving? by Amanda Chicago Lewis

"Voters passed a law in November 2016 making recreational marijuana legal. But today, the vast majority of the market remains underground – about 80-90% of it, according to experts.

"Because that 2016 law, known as Proposition 64, gave municipalities the power to ban weed as they see fit, the majority of cities and counties still don’t allow the sale of cannabis, inhibiting the growth of the legal market.

"In the places that do allow pot shops and grows, business owners say high taxes, the limited availability of licenses, and expensive regulatory costs have put the legal market out of reach. 

...

"The story of California’s legal weed chaos dates back to 1996, when voters passed a law allowing medical marijuana. At the time, Bay Area Aids activists saw the way pot relieved pain and stimulated hunger among their emaciated and desperately ill friends. That led to a grassroots campaign to get Proposition 215, a measure legalizing the medical use of cannabis, on the California ballot.

"However, Prop 215 only allowed doctors to recommend that patients and their caregivers grow their own weed. Essentially, it legalized a commodity without legalizing the business side of it.

"For the next 20 years, a laissez-faire, gray market for medical marijuana flourished and became entrenched. With doctors’ recommendations for medical marijuana easy and cheap to come by, cannabis entrepreneurs practiced a lucrative form of civil disobedience, opening dispensaries, manufacturing edibles and growing acres of plants that brought in enough money to offset intermittent law enforcement crackdowns. The industry developed protocols to get a business back up and running right after a raid, such as keeping cash offsite and obscuring ownership through a series of management companies.

"If you could withstand the legal uncertainty, it was a good time to make money in marijuana. By 2010, the city of Los Angeles had about 2,000 pot shops illegally selling cannabis. Statewide, the total illicit market surged, causing Mexican cartels to either stop growing weed or to relocate their grows to California.

...

"For a marijuana enterprise today, becoming legal has often meant sacrificing a good deal of profit. Businesses frequently pay an effective tax rate of 70%, in part because they are breaking federal law and therefore aren’t able to take tax deductions, but also because politicians see the industry as a source of tax revenue and set higher rates.

...

"But the longer we allow cannabis to remain state-legal and federally illegal, the harder it will be to fix. Though botching weed legalization sounds like a trivial issue, it intersects with many of the issues that are fundamental to our lives, from criminal justice to public health, gang violence to economic inequality, the opioid crisis to the wellness craze. Cannabis is the second-most-valuable crop in the country, after corn and ahead of soybeans. It’s the most common reason for arrest in America. And despite marijuana’s dubious reputation, research has shown the plant “may have therapeutic potential in almost all diseases affecting humans”.

Approximating large games

One of the big lessons of market design is that market participants may have big strategy sets.  This means that analyzing naturally occurring strategic settings may exceed our ability to model and analyze them as fully specified games.

Here's a paper that explores an interesting, somewhat related idea:

Christian Kroer, Alexander Peysakhovich, Eric Sodomka, Nicolas E. Stier-Moses (2021) Computing Large Market Equilibria Using Abstractions. Operations Research, Articles in Advance 01 Oct 2021, https://doi.org/10.1287/opre.2021.2163

"Abstract. Computing market equilibria is an important practical problem for market design, for example, in fair division of items. However, computing equilibria requires large amounts of information (typically the valuation of every buyer for every item) and computing power. We consider ameliorating these issues by applying a method used for solving complex games: constructing a coarsened abstraction of a given market, solving for the equilibrium in the abstraction, and lifting the prices and allocations back to the original market. We show how to bound important quantities such as regret, envy, Nash social welfare, Pareto optimality, and maximin share/proportionality when the abstracted prices and allocations are used in place of the real equilibrium. We then study two abstraction methods of interest for practitioners: (1) filling in unknown valuations using techniques from matrix completion and (2) reducing the problem size by aggregating groups of buyers/items into smaller numbers of representative buyers/items and solving for equilibrium in this coarsened market. We find that in real data allocations/prices that are relatively close to equilibria can be computed from even very coarse abstractions."

Marilda Sotomayor: a career in matching

 Pesquisa FAPESP has a good interview with Marilda Sotomayor, about her career in game theory, and matching theory in particular, and how she came to work with David Gale.  Google translate does a good job (except that it gives her the pronouns he and his...)

Marilda Sotomayor: Uma pensadora dos jogos, by Yuri Vasconcelos, Pesquisa FAPESP, Edition 309, nov. 2021

[GT: Marilda Sotomayor: A game thinker]

[With] Researcher and mathematician Alvin Roth, with whom he wrote a book in 1990

A step towards kidney exchange in Germany

 Here's an announcement of the German Medical Association's endorsement of kidney exchange, in the Deutsches Ärzteblatt.

Ärztetag spricht sich für Cross-over-Lebend­spende aus Mittwoch, 3. November 2021

Google translate: Doctors' day advocates cross-over living donation

"Berlin - The 125th German Medical Association (DÄT) has spoken out in favor of expanding the number of living organ donors. From the point of view of the medical parliament, a cross-over living donation - as it is already allowed in other countries - should also be made possible in Germany in the future.

"New legal regulations are required for this. Specifically, paragraph 8, approach 1 of the Transplantation Act (TPG) would have to be expanded, a donor-recipient pair can agree with a suitable second pair that two living organ donations are carried out crosswise (i.e. donor A / recipient B and vice versa).

"Living organ donation must be reorganized and rethought based on the current state of science," said Günther Matheis, President of the Rhineland-Palatinate Medical Association ( LÄKRLP ), at yesterday's debate.

T"he TPG currently limits the donor-recipient group for living organ donation to first- or second-degree relatives, spouses, fiancés or other persons who are obviously particularly close to the donor. The DÄT believes that a similar fate can bind people who have not been known to one another just as closely as people who are close to one another.

"In view of over 9,000 patients on the waiting lists who are urgently waiting for a life-sustaining transplant and the still far too low number of available donor organs, possible changes to the regulations on living organ donation have long been discussed in Germany."

HT: Axel Ockenfels

Earlier posts: https://marketdesigner.blogspot.com/search?q=Germany+AND+kidney&max-results=20&by-date=true

First kidney exchange in Hong Kong

 The Standard has the story:

First paired kidney donation in Hong Kong completed successfully,   3 Nov 2021

"The first paired kidney donation has been successfully completed in Hong Kong, with the two patients involved discharged from hospital by the end of September.  

"The Hospital Authority launched the Paired Kidney Donation Pilot Programme in 2018, allowing cross matches between two patients waiting for kidney transplants and their respective family m"embers.  

"The families could not donate a kidney to their own loved ones due to incompatible blood groups or human leucocyte antigens.  

"The first case was successfully matched in June this year, and the two pairs of patients and their families were discharged from the hospital by the end of September. 

...

""The number of successful cadaveric and living kidney transplants is fewer than 80 per year, but the number of people waiting for transplant has reached 2,300," Lee said. "Each of them can only live for an average of 54 months longer if they fail to get a transplant.” 

...

"The team said the biggest challenge was to ensure the operations of both families are carried out at the same time. 

"In addition, to make sure that the patients would not know the identity of the other, there should also be special arrangements for admission registration and their entry into operating theaters. "

Lawsuits involving NKR's kidney exchange contracts

 Kim Krawiec, the Sullivan & Cromwell Professor of Law at the University of Virginia, sheds some light on recent legal exchanges between the kidney exchange nonprofit National Kidney Registry and some of the Transplant Centers that are (or were) members of its network. Both suits (which seem to have been settled out of court) involved the TC's desire to withdraw (or partially withdraw) from NKR's system, and NKR's attempt to charge them $1000/kidney/month in perpetuity (or until they supply the kidneys) for kidneys they received in excess of kidneys they supplied. (In particular, NKR wanted $8000 per month from Colorado forever, or until they supplied 8 kidneys.)  Her post is long and learned, and well worth reading in its entirety, but here are some snippets.

She leads off with this graphic of a judge's gavel hammering a stethoscope

Recent Contract Disputes In The Transplant World November 3, 2021 / By Kimberly Krawiec 

"Readers may be interested in two relatively recent lawsuits involving the National Kidney Registry (NKR) and the University of Colorado Hospital Authority (“UCH,” filed 3/26/21) and the University of Maryland Medical Center (“UMMC”, filed 4/2/2018), respectively. (Citations and links to both lawsuits are at the end of this post)

...

This option to specifically perform is interesting in its own right, and I may say more about it later, but what if a Member Center couldn’t deliver kidneys to the network, say because the UCH kidney transplant program had been closed? Or because they determined that kidney exchange was bad for their patients? In the event that delivering kidneys to NKR is impossible, is a court likely to award NKR these fees into perpetuity – a present value of nearly $5 million? (using an interest rate of 2%, which may understate the amount, given the current low interest rate environment)

"Under the penalty doctrine, NKR would have to describe its loss, and why $1000/kidney/month is a reasonable estimate of it, even if it can’t provide a precise amount. Here, the “in perpetuity” aspect may be troubling to courts, even if the present value is not high relative to whatever the alleged loss is, as it seems unlikely that NKR is harmed in perpetuity if a member center backs out.

...

"when federal law prohibits the exchange of valuable consideration for a kidney, by definition there is no market price for either the court or the contracting parties to reference. Here, the parties attempted to overcome that problem by specifying a recurring charge, but it’s continuation into perpetuity may raise eyebrows, even if the present value of the charges is otherwise reasonable.

***********

The various legal documents can be found at these links

https://kimberlydkrawiec.org/wp-content/uploads/2021/11/Member-Terms-and-Conditions.pdf

 https://kimberlydkrawiec.org/wp-content/uploads/2021/11/Complaint.pdf

 https://kimberlydkrawiec.org/wp-content/uploads/2021/11/May-7-motion-to-dismiss.pdf

 https://kimberlydkrawiec.org/wp-content/uploads/2021/11/1Summons-Complaint.pdf

***********

Given NKR's non-profit status, paragraph 30 of the Colorado complaint caught my eye:

Selection of Dutch doctors by lottery

 Here's a recent article describing the once and future Dutch selection of medical students by lottery. (I believe that residency positions may also have or have had selection by lottery.)

Rationales for a Lottery Among the Qualified to Select Medical Trainees: Decades of Dutch Experience by Olle ten Cate, J Grad Med Educ (2021) 13 (5): 612–615. https://doi.org/10.4300/JGME-D-21-00789.1

"The Dutch Lottery for Medical School Selection

"A lottery, as a method to determine who will be admitted to medical school or residency, may sound an absurd proposition to many. A lottery appears to devalue motivation, disregard high effort and talent, and randomly block freedom of career choice. However, The Netherlands has decades of experience with this method. The Dutch government applied a lottery system nationally for admission to all medical schools in 1972. This system was abandoned in 2017 after an appeal but will now be reinstalled in 2023 as a legitimate procedure for the selection of students.

"Until 1972, the admission to Dutch medical schools, which have a 6-year program not preceded by baccalaureate education, was freely accessible for applicants with the proper secondary schooling (note that the Dutch government pays for most of medical education). When applicants increased in number and their costs became substantial, the Dutch government introduced a numerus fixus, a restricted total number of positions, derived from predictions of future physician need. After years of debate, politicians settled on a “weighted lottery” system for admissions. The average score on a national final secondary examination determined the weighting. Students with an outstanding score would triple their chances compared to those with a just-pass score. Declined candidates could reenter the lottery for 2 subsequent years. For decades schools and the public were generally satisfied with this procedure to determine the one-third of all applicants (on average across decades) for whom there was space at a Dutch medical school. The lottery procedure was smoothly conducted by a government agency, until 1996. That year an outstanding high school graduate was turned down 3 times and appealed the decision. Political and societal anger arose and led to a gradual replacement of the lottery, initially with a local qualitative selection process in parallel with a national weighted lottery. In 2 decades, the national lottery system was abandoned altogether; legislation prohibited medical schools from using a lottery as of 2017. Surprisingly, in 2020, a parliamentary majority voted to allow schools to use a lottery system, and thus reinstalled lottery processes as a legitimate method of selection. The law is effective in 2023."

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

Related:

Lottery Admissions System in the Netherlands, FL Meijler, J Vreeken - Science, 1975 - science.org

The weighted lottery in the admission to ‘restricted’ university studies in the Netherlands,      

Ben Wilbrink

The use of lottery systems in school admissions

C Stasz, C Von Stolk, R Europe, C Rand, TW Sutton - 2007 - researchgate.net

Venus of Willendorf, on OnlyFans

 The NY Times has the story:

OnlyFans May Be a Refuge for Nude Fine Art. The Vienna Tourist Board has joined the adults-only site to display artworks that other social platforms have censored.  By Valeriya Safronova

"OnlyFans has a surprising new member: the Vienna Tourist Board.

"No, its account will not feature after-hours photos of employees. Instead, the board will use the adults-only site to show images of paintings and sculptures displayed in the Austrian capital that have been blocked by social media sites for nudity or sexual content.

"The offending artworks include the Venus of Willendorf, a 25,000-year-old limestone figurine of a woman. Facebook removed a photo of it from the Vienna Museum of Natural History’s page several years ago for being “pornographic.”

...

"Vienna is hardly the only city whose art has been censored online. Many artworks, from all over the world, have been incorrectly identified by A.I. as pornography. Facebook has taken down pictures posted by the Museum of Fine Arts in Boston (of Imogen Cunningham’s photographs of nude bodies), the Philadelphia Museum of Art (of a painting by Evelyne Axell in which a woman is licking an ice cream cone) and the Metropolitan Museum of Art in New York (of a 1917 painting of a nude woman by Amedeo Modigliani).

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

Here's the Wikipedia page for Venus of Willendorf

Contract design (by lawyers for users...)

 Here's an interview from the legal blog Above the Law:

Why The Time For Better Contract Design Is Now. Q&A with Stefania Passera and Paula Doyle. By OLGA V. MACK

"In an age of fast-growing complexity, the winners are those who simplify the lives of others.

As part of its mission to promote ease of doing business for social and economic benefit, World Commerce & Contracting has long been a vocal advocate for simpler, user-centered contracts. But what does good contract design look like, in practice? And how do you make a compelling business case for it in your organization?

I caught up with Stefania Passera, contract designer in residence, and Paula Doyle, chief legal innovation officer — the leading ladies behind WorldCC’s design and simplification initiatives — to discuss their most recent initiatives.

Olga Mack: So, I hear you love contracts. How did this happen to you? 

Stefania Passera: I don’t actually love contracts per se, but I love the challenge of transforming them into something clear, useful, and engaging for all stakeholders. I love seeing business people look at contracts with new eyes and understand them for the first time! I love seeing lawyers realizing that they don’t need contracts to be full of legalese for it to be binding and that sticking in everything, including the kitchen sink just in case, is not actually good risk management. My background is in information design, which is the art and science of making complex information usable and understandable. There is a lot of work to be done in the world of contracts!

Paula Doyle: I completely agree with all that Stefania has said. I have been a lawyer in industry for more than 20 years. Frankly, I am bewildered, given all of the other advances in the world during that time period, that contracts remained largely static up until about 5 years ago! Contracts are in essence instruments to help organizations and individuals get things done. At their core they should be understandable. They should not be the domain of only lawyers! 

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

Here's a Contract Design Pattern Library on the WC&C website.

Market Design by Nikhil Agarwal & Eric Budish (forthcoming in the Handbook of Industrial Organization)

 Here's an NBER working paper that will appear in the Handbook of Industrial Organization:

Market Design by Nikhil Agarwal & Eric Budish

NBER WORKING PAPER 29367,  DOI 10.3386/w29367,  October 2021

Abstract: "This Handbook chapter seeks to introduce students and researchers of industrial organization (IO) to the field of market design. We emphasize two important points of connection between the IO and market design fields: a focus on market failures—both understanding sources of market failure and analyzing how to fix them—and an appreciation of institutional detail.

"Section II reviews theory, focusing on introducing the theory of matching and assignment mechanisms to a broad audience. It introduces a novel “taxonomy” of market design problems, covers the key mechanisms and their properties, and emphasizes several points of connection to traditional economic theory involving prices and competitive equilibrium.

"Section III reviews structural empirical methods that build on this theory. We describe how to estimate a workhorse random utility model under various data environments, ranging from data on reported preference data such as rank-order lists to data only on observed matches. These methods enable a quantification of trade-offs in designing markets and the effects of new market designs.

"Section IV discusses a wide variety of applications. We organize this discussion into three broad aims of market design research: (i) diagnosing market failures; (ii) evaluating and comparing various market designs; (iii) proposing new, improved designs. A point of emphasis is that theoretical and empirical analysis have been highly complementary in this research"

Here's the first paragraph:

"Textbook models envision markets as abstract institutions that clear supply and demand. Real markets have specific designs and market clearing rules. These features affect market participants and their allocations in various ways – they determine the actions an agent can take, the incentives for taking those actions, the information environment, the interactions between agents’ actions, and, ultimately, the final allocation. Well-designed markets have rules that coordinate and incentivize behavior in ways that lead to desirable outcomes. But it is not a given that all markets have good design. The Market Design field studies these  rules in order to understand their implications, to identify potential market failures, and to remedy them by designing better institutions."

Economic warfare: how to staff it?

 The Financial Times has a story about how the UK Ministry of Defense runs an economic warfare unit, which needs to be staffed differently than other military specialties. (The U.S. armed forces have very limited ability to recruit people with specialized skills from civilian occupations, except for doctors and lawyers.)

Secretive MoD ‘banking’ unit helps UK wage economic warfare. Taskforce set up to disrupt Isis six years ago turns its attention to new ‘grey zone’ threats such as cyber  by Helen Warrell 

"A taskforce of former bankers and financiers is helping the UK military sharpen its skills in economic warfare as a bulwark against growing threats including terrorism, cyber attacks and disinformation campaigns.

"The secretive unit — established by Britain’s Ministry of Defence six years ago to disrupt Isis’ commercial activities in Iraq and Syria — is staffed by a handful of former City professionals with expertise in commodity markets and international money flows.

...

"The taskforce, made up predominately of reservists with City experience, has worked with special forces, intelligence agencies and the army’s 77th Brigade information warfare unit to weaken adversaries by limiting their access to finance. 

...

"Bankers are able to enter the armed forces in a number of ways, from applying for a post as a military “regular” through the army’s officer selection board and undergoing training at Sandhurst, to working more flexibly in pro bono roles.

"The MoD is also considering reforms to its policies on reservists, including relaxing age and fitness requirements and bringing in a new “lateral” entry regime which would allow industry experts to transfer directly into senior military ranks rather than working their way up the hierarchy.

“We’re really not trying to throw middle-aged bankers out of the back of aircraft [on military operations],” the taskforce member explained. “It’s about using their professional skills.”

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

See also 

Tuesday, December 1, 2020

The labor market that is the military: a report from the National Academies of Science, Engineering, and Medicine

Matching refugees to countries by Jesús Fernández-Huertas Moraga and Martin Hagen

 From the IZA World of Labor:

Can market mechanisms solve the refugee crisis? The combination of tradable quotas and matching would benefit host countries as well as refugees  by Jesús Fernández-Huertas Moraga and Martin Hagen

"Ever since the major inflow of refugees (the “refugee crisis”) in 2015 and 2016, there has been heated debate about the appropriate distribution of refugees in the EU. Current policies revolve around mandatory quotas, which disregard the preferences of EU members and refugees alike. This problem can be addressed with two market mechanisms. First, tradable quotas minimize the cost of asylum provision for host countries. Second, a matching system gives refugees more discretion over where they are sheltered. While this proposal is theoretically appealing, it has yet to be tested in practice."

"A vivid demonstration of free riding was the EU's response to the upsurge in irregular migration in 2015 and 2016. In each of the two years, the EU registered more than one million asylum applicants, mostly from Syria, Afghanistan, and Iraq. Their main points of entry into the EU were Greece and Italy, whose reception facilities were quickly overwhelmed. Other EU members showed little willingness to help them out. As refugees tried to make their way toward Western and Northern Europe, several states reacted with border closures. Hungary, Slovenia, and Austria, among others, even erected fences to keep asylum seekers from entering their territories.

"To tackle the escalating situation, the European Commission launched the European Agenda on Migration in May 2015 [1]. One of its main components was an emergency mechanism to relocate 160,000 asylum seekers from Greece and Italy to the rest of the EU. A distribution key specified a quota of refugees for each EU member, based on measures of reception capacity (mainly GDP and population size). For each relocated person, the receiving country was financially compensated with €6,000 from the EU budget. Several Eastern European countries staunchly opposed the mandatory quotas but were overruled in the Council. Partly reflecting their reluctance, only about 35,000 refugees were eventually relocated.

...

"How the mechanism works in detail

"The proposal can be divided into three stages: an initial allocation of quotas, a market for these quotas, and a matching system.

"Stage 1: Initial allocation of quotas

...

"Stage 2: Quota trading

...

"Stage 3: Matching refugees to countries

...

"In the final decision adopted by the Council, the Parliament's proposal was redacted to a one-sided matching mechanism that gave countries the possibility to express their preferences over refugees but not vice versa. Both on paper and in practice, the matching procedure was rather ad-hoc. A more systematic approach that incorporates insights from matching theory can improve the outcomes for refugees and countries alike.

"As envisioned by the European Parliament, a two-sided matching mechanism would allow refugees to rank EU members from most preferred to least preferred. Conversely, countries would rank different types of refugees, stratified according to family ties, language skills, education levels, and so on. This information would be collected and fed into a centralized algorithm, which would return an assignment of refugees to countries."

Luxembourg combats cannabis black markets by legalizing home cultivation

 Luxembourg is combatting cannabis black markets by ending the prohibition on home cultivation.

The Guardian has the story:

Luxembourg first in Europe to legalise growing and using cannabis. Relaxation is part of government rethink designed to keep users away from illegal market

"Adults in Luxembourg will be permitted to grow up to four cannabis plants in their homes or gardens under laws that will make it the first country in Europe to legalise production and consumption of the drug.

"The announcement on Friday by Luxembourg’s government was said to deliver fundamental changes in the country’s approach to recreational cannabis use and cultivation in light of the failure of prohibition to deter use.

...

"Justice minister Sam Tanson described the change to the law on domestic production and consumption as a first step.

...

“We want to start by allowing people to grow it at home. The idea is that a consumer is not in an illegal situation if he consumes cannabis and that we don’t support the whole illegal chain from production to transportation to selling where there is a lot of misery attached. We want to do everything we can to get more and more away from the illegal black market.”

Celebrate John Kagel, in Tucson, in person, Oct 28

 John H. Kagel Symposium

"On Thursday, October 28, 2021 we will be holding a workshop to celebrate John’s work and highlight his scientific contributions (same venue as ESA meetings). John’s path-breaking research has substantially enhanced the visibility and acceptance of experimental methods across the social sciences. For this occasion, Muriel Niederle and Al Roth have kindly agreed to be the keynote speakers. ...

The workshop is being organized by Andrzej Baranski (NYU Abu Dhabi), David Cooper (FSU), and Guillaume Frechette (NYU). Should you have any questions please contact Andrzej at a.baranski@nyu.edu.

Symposium Keynote Speakers: Alvin E. Roth, Muriel Niederle

Confirmed Speakers: Kirby Nielsen, Olivier Armantier, James Walker, Andrzej Baranski, Leeat Yariv, Dan Levin, Ed Fisher, Marco Cassari

Same sex marriage now legal in Switzerland, by popular referendum

 The BBC has the story (it happened last month, but I wasn't paying attention):

Switzerland same-sex marriage: Two-thirds of voters back yes

"Some 64% supported the measure, making it one of the last countries in western Europe to legalise same-sex marriage.

...

"In the build up to the vote, church groups and conservative political parties opposed the idea, saying it would undermine the traditional family.

"Switzerland has allowed same-sex couples to register partnerships since 2007, but some rights are restricted.

"The measure will make it possible for same-sex couples to adopt unrelated children and for married lesbian couples to have children through sperm donation.

"It makes Switzerland the 30th country in the world to adopt same-sex marriage.

...

"Justice Minister Karin Keller-Sutter said the first same-sex marriages would take place in July next year.

"Whoever loves each other and wants to get married will be able to do so, regardless of whether it is two men, two women, or a man and a woman," she said.

...

"Over the last 20 years, most countries in western Europe have recognised same-sex marriage. However, in Switzerland many big decisions go to a nationwide ballot, and this can slow down major changes to social legislation.

"The new law, which had the backing of the Swiss government and all major political parties except the People's Party, was passed by parliament in December."

Crime and punishment (or not): Shoplifting in San Francisco

 In a criminal justice system in which incarceration sometimes seems to be the treatment of choice, it makes some sense to pay less attention to small crimes. But incentives matter, and so do small crimes (particularly small crimes that can be aggregated by organized gangs into profitable businesses...).

The WSJ has the story:

San Francisco Has Become a Shoplifter’s Paradise. Walgreens has closed 22 stores in the city, where thefts under $950 are effectively decriminalized. By Jason L. Riley

"The recent closings bring to 22 the number of stores that Walgreens has shut in the city since 2016. “Theft in Walgreens’ San Francisco stores is four times the average for stores elsewhere in the country, and the chain spends 35 times more on security guards in the city than elsewhere,” reported the San Francisco Chronicle.

...

"Much of this lawlessness can be linked to Proposition 47, a California ballot initiative passed in 2014, under which theft of less than $950 in goods is treated as a nonviolent misdemeanor and rarely prosecuted. Out of concern for safety and potential lawsuits, stores tell employees and security guards not to intervene when they witness a crime. Most suspects, if they are pursued at all by police, are soon released. Californians effectively decriminalized shoplifting. Not surprisingly, they have more of it."

The Economist celebrates Milgrom and Wilson, and economic engineering

 The Economist has weighed in on the 2021 Nobel Prize in Economics:

The Nobel prize in economics rewards advances in auction theory. For the third time since 2007, it goes to designers of market mechanisms, Oct 17th 2020

"In 1991 Alvin Roth, who in 2012 would share the Nobel prize for economics, was asked how the discipline might change over the century to come. “In the long term”, he wrote, “the real test of our success will be not merely how well we understand the general principles which govern economic interactions, but how well we can bring this knowledge to bear on practical questions of microeconomic engineering.” Sweden’s Royal Academy of Science seems to agree. On October 12th it gave this year’s Nobel prize to Paul Milgrom and Robert Wilson, both of Stanford University, for their work on auction theory and design. Their work epitomises economics as engineering.

...

"The pursuit of economics as a form of engineering means that Messrs Milgrom and Wilson are more enmeshed in the real world than the typical academic. Both have consulted for regulators and firms. Mr Milgrom advised Time Warner and Comcast on their participation in radio-spectrum auctions in 2006; his efforts helped save his clients more than $1bn. In 2009 he co-founded a firm, Auctionomics, that provides consulting services to those looking to operate and to bid in auctions (many of the sort designed by the prizewinners).

"It is a different sort of work from that which many aspiring scholars imagine themselves to be pursuing. But the rewards the laureates have reaped in academia and beyond certainly advertise the power wielded by economic engineers."

Economics of organ transplants celebrated by Stanford GSB

 The Stanford GSB website has a long article celebrating the work at Stanford studying many aspects of kidney transplantation (kidney exchange, deceased donors, compensation), focusing particularly on the work of Mohammad Akbarpour, Paulo Somaini, and Stefanos Zenios at GSB, and connections to other Stanford faculty including Itai Ashlagi.

A Beautiful Application: Using Economics to Make Kidney Exchanges More Efficient and Fair.  Even modest improvements to organ exchange markets can save many lives. That’s where economists and operations experts come in. | by Dylan Walsh

Here's a line I liked:)

"The year was 2012. Akbarpour was a doctoral student taking a class with Alvin Roth, the legendary Stanford economics professor..."

Kidney failure is epidemic among agricultural workers in hot countries… so is likely to be exacerbated by global warming.

 When I visited the UAE this past summer, I learned that it has high rates of kidney failure, attributed to the very high temperatures that outdoor workers experience there. Here's a story that says that's a problem in other hot places, and therefore likely to get worse as the atmosphere heats up. It's a further reason why it makes sense to expand kidney exchange across borders, and not just among wealthy countries.

The Guardian has the story:

Global heating ‘may lead to epidemic of kidney disease’. Deadly side-effect of heat stress is threat to rising numbers of workers in hot climates, doctors warn  by Natalie Grover

"Chronic kidney disease linked to heat stress could become a major health epidemic for millions of workers around the world as global temperatures increase over the coming decades, doctors have warned.

"More research into the links between heat and CKDu – chronic kidney disease of uncertain cause – is urgently needed to assess the potential scale of the problem, they have said.

"Unlike the conventional form of chronic kidney disease (CKD), which is a progressive loss of kidney function largely seen among elderly people and those afflicted with other conditions such as diabetes and hypertension, epidemics of CKDu have already emerged primarily in hot, rural regions of countries such as El Salvador and Nicaragua, where abnormally high numbers of agricultural workers have begun dying from irreversible kidney failure.

"CKDu has also started to be recorded as affecting large numbers of people doing heavy manual labour in hot temperatures in other parts of Central America as well as North America, South America, the Middle East, Africa and India.

...

"Dr Ramón García Trabanino, a clinical nephrologist and medical director at El Salvador’s Centre of Hemodialysis, first noticed an unusual number of CKD patients saturating his hospital as a medical student more than two decades ago.

“They were young men,” he said, “and they were dying because we didn’t have the budget or the capacity to give them dialysis treatment. We did the best we could, but they kept dying and more kept coming.”

"Since then he has started researching similar epidemics in Mexico, Nicaragua, Costa Rica and Panama."

Janos Kornai (1928-2021)

 Peter Biro alerts me to the passing of Janos Kornai.

Renowned Economist Kornai Dies Aged 94

and here

Economist Janos Kornai dies

He was a bridge between East and West, between command economies and market economies.  Here's his Google Scholar page: Janos Kornai.

When I met him, he was spending half his time at Harvard and half back in Hungary.  At his retirement dinner from Harvard, someone asked him something along the lines of "what's the biggest difference between Hungary and the U.S.?" He answered that it was how people answered the question "How are you?"  In Hungary, he said, people told you of their complaints, but in the U.S., everyone gave you a big smile and said "I'm fine, how are you?"  He recounted how he thought the American answer was more cheerful, and that he would try to change the equilibrium in Hungary by answering like an American, when in Hungary.  But this didn't work, he said (which is the problem with equilibria...)  When he would reply that he was fine, the response he got was along the lines of "Of course you're fine, you live in the United States!"). So he resigned himself to the fact that equilibria are hard to change...

NBER Market Design Working Group Meeting, Fall 2021

Market Design Working Group Meeting, Fall 2021

DATE October 21-23, 2021 (Times in EDT)

ORGANIZERS Michael Ostrovsky and Parag A. Pathak

NBER conferences are by invitation. All participants are expected to comply with the NBER's Conference Code of Conduct.

Thursday, October 21

12:00 pm

Randomized FIFO Mechanisms 

Francisco Castro, UCLA

Hongyao Ma, Columbia University

Hamid Nazerzadeh, University of Southern California

Chiwei Yan, University of Washington

12:45 pm

The Value of Excess Supply in Spatial Matching Markets 

Mohammad Akbarpour, Stanford University

Yeganeh Alimohammadi, Stanford University

Shengwu Li, Harvard University

Amin Saberi, Stanford University

1:30 pm

Break

2:00 pm

Choices and Outcomes in Assignment Mechanisms: The Allocation of Deceased Donor Kidneys 

Nikhil Agarwal, Massachusetts Institute of Technology and NBER

Charles Hodgson, Yale University

Paulo J. Somaini, Stanford University and NBER

2:45 pm

Price Discovery in Waiting Lists: A Connection to Stochastic Gradient Descent 

Itai Ashlagi, Stanford University

Jacob D. Leshno, University of Chicago

Amin Saberi, Stanford University

Pengyu Qian, Columbia Business School

3:30 pm

Adjourn

Friday, October 22

12:00 pm

Linear Pricing Mechanisms without Convexity 

Paul Milgrom, Stanford University

Mitchell L. Watt, Stanford University

12:45 pm

The Equilibrium Existence Duality: Equilibrium with Indivisibilities and Income Effects 

Elizabeth C. Baldwin, University of Oxford

Omer Edhan, University of Manchester

Ravi Jagadeesan, Stanford University

Paul D. Klemperer, University of Oxford

Alexander Teytelboym, University of Oxford

1:30 pm

Break

2:00 pm

Flow Trading 

Eric Budish, University of Chicago and NBER

Peter Cramton, University of Cologne

Albert "Pete" Kyle, University of Maryland

Jeongmin (Mina) Lee, Washington University in St. Louis

David Malec, University of Maryland

2:45 pm

Designing a Combinatorial Financial Options Market 

Xintong Wang, Harvard University

David Pennock, Microsoft Research

Nikhil Devanur, Amazon

David M. Rothschild, Microsoft Research

Biaoshuai Tao, Shanghai Jiao Tong University

Michael Wellman, University of Michigan

3:30 pm

Adjourn

Saturday, October 23

12:00 pm

Choice Screen Auctions 

Michael Ostrovsky, Stanford University and NBER

12:45 pm

Mechanism Design meets Priority Design: Redesigning the US Army's Branching Process 

Kyle Greenberg, United States Military Academy at West Point

Parag A. Pathak, Massachusetts Institute of Technology and NBER

Tayfun Sönmez, Boston College

1:30 pm

Break

2:00 pm

Decentralizing Centralized Matching Markets: Implications from Early Offers in University Admissions  

Julien Grenet, Paris School of Economics

Yinghua He, Rice University

Dorothea Kübler, WZB

2:45 pm

Mechanism and Priority Design for Distributional Objectives: An Application to Decrease Inequalities in Access to Experienced Teachers 

Julien Combe, CREST - Ecole polytechnique

Umut M. Dur, North Carolina State University

Olivier Tercieux, Paris School of Economics

Camille Terrier, University of Lausanne

M. Utku Ünver, Boston College

3:30 pm

Adjourn