Sunday, August 8, 2021

Stanford SITE Seminar: Psychology and Economics, Aug 9-10

 


Date
 - 
ORGANIZED BY
  • B. Douglas Bernheim, Stanford University
  • John Beshears, Harvard Business School
  • Vincent Crawford, University of Oxford and University of California, San Diego
  • David Laibson, Harvard University
  • Ulrike Malmendier, University of California, Berkeley

As we have done for many years, this workshop brings together researchers working on issues at the intersection of psychology and economics. The segment will focus on evidence of and explanations for non-standard choice patterns, as well as the positive and normative implications of those patterns in a wide range of economic decision-making contexts, such as lifecycle consumption and savings, workplace productivity, health, and prosocial behavior. The presentations will frequently build upon insights from other disciplines, including psychology and sociology. Theoretical, empirical, and experimental studies will be included.

In This Session

Monday, August 9, 2021

AUG 9
9:00 AM - 9:30 AM

The Gender Gap in Self-Promotion

Presented by: Christine Exley (Harvard Business School)
Co-author(s): Judd B. Kessler (The Wharton School, University of Pennsylvania)

In applications, interviews, performance reviews, and many other environments, individuals subjectively describe their ability and performance to others. We run a series of experiments, involving over 4,000 participants from online labor markets and over 10,000 school-aged youth. We find a large gender gap in self-promotion: Women subjectively describe their ability and performance to potential employers less favorably than equally performing men. Even when all incentives to promote are removed, however, the gender gap remains. The gender gap in self-promotion is reflective of an underlying gender gap in how individuals subjectively evaluate their own performance. This underlying gender gap proves persistent and arises as early as the sixth grade.

AUG 9
9:30 AM - 10:00 AM

Partial Equilibrium Thinking in General Equilibrium

Presented by: Francesca Bastianello (Harvard University)
Co-author(s): Paul Fontanier (Harvard University)

We develop a theory of “Partial Equilibrium Thinking” (PET), whereby agents fail to understand the general equilibrium consequences of their actions when inferring information from endogenous outcomes. PET generates a two-way feedback effect between outcomes and beliefs, which can lead to arbitrarily large deviations from fundamentals. In financial markets, PET equilibrium outcomes exhibit over-reaction, excess volatility, high trading volume, and return predictability. We extend our model to allow for rationality of higher-order beliefs, general forms of model misspecification, and heterogenous agents. We show that more sophisticated agents may contribute to greater departures from rationality. We also draw a distinction between models of misinference and models with biases in Bayesian updating, and study how these two departures from rationality interact. Misinference from mistakenly assuming the world is rational amplifies biases in Bayesian updating.

AUG 9
10:00 AM - 10:15 AM

Break

AUG 9
10:15 AM - 10:45 AM

Belief-Updating: Inference versus Extrapolation

Presented by: Tony Q. Fan (Stanford University),
Co-author(s): Yucheng Liang (Carnegie Mellon University) and Cameron Peng (London School of Economics and Political Science)

Survey forecasts of macroeconomic and financial variables show widespread overreaction to news, but laboratory experiments on belief updating typically find underinference from signals. We provide new experimental evidence to connect these two seemingly inconsistent phenomena. Building on a classic experimental paradigm, we study how people make inferences and revise forecasts in the same fully-specified information environment. Subjects underreact to signals when inferring about fundamental states (“underinference”), but overreact to signals when revising forecasts about future outcomes (“overextrapolation”). In the latter task, subjects appear to be using a mix of simplifying heuristics, such as focusing on the representative state (the state most consistent with the signal) and anchoring on the signal. Additional treatments link our results to the difficulty of recognizing the conceptual connection between inference and forecast revision problems.

AUG 9
10:45 AM - 11:15 AM

Learning in the Household

Presented by: Gautam Rao (Harvard University)
Co-author(s): John J. Conlon (Harvard University), Malavika Mani (Columbia University), Matthew Ridley (MIT), and Frank Schilbach (MIT)

This paper studies social learning and information pooling within the household using a lab experiment with 400 married couples in Chennai, India. Participants are asked to guess the fraction of red balls in an urn after each spouse privately receives draws from the urn and then has a chance to learn their spouse’s draws through a face-to-face discussion. Guesses are paid for accuracy and the payoff is split equally between the spouses, aligning their incentives. We find that husbands’ beliefs respond less than half as much to information that was collected by their wives, relative to ‘own’ information. This failure of learning is not due to communication frictions: when we directly share their wife’s information with husbands, they continue to under-weight it relative to their own draws. Wives do not display this behavior, and instead equally weight their own and their spouse’s information. In a follow-up experiment with pairs of strangers, individuals of both genders put more weight on their own information than on their partner’s. We conclude that people have a general tendency to under-weight others’ information relative to their own, and speculate that a norm of wives deferring to their husbands may play a countervailing role in our context.

AUG 9
11:15 AM - 11:30 AM

Break

AUG 9
11:30 AM - 12:00 PM

Does Saving Cause Borrowing?

Presented by: Michaela Pagel (Columbia GSB)
Co-author(s): Paolina Medina (Mays Business School of Texas A&M University)

We study whether or not nudging individuals to save more has the unintended consequence of additional borrowing in high-interest unsecured consumer credit. We analyze the effects of a large-scale experiment in which 3.1 million bank customers were nudged to save more via (bi-)weekly SMS and ATM messages. Using Machine Learning methods for causal inference, we build a score to sort individuals according to their predicted treatment effect. We then focus on the individuals in the top quartile of the distribution of predicted treatment effects who have a credit card and were paying interest at baseline. Relative to their control, this group increased their savings by 5.7% on average or 61.84 USD per month. At the same time, we can rule out increases in credit card interest larger than 1.25 USD with 95% statistical confidence. We thus estimate that for every additional dollar of savings, individuals incur less than 2 cents in additional borrowing cost. This is a direct test test of the predictions of rational co-holding models, and is an important result to evaluate policy proposals to increase savings via nudges or more forceful measures.

AUG 9
12:00 PM - 12:30 PM

Dynamic Preference "Reversals" and Time Inconsistency

Presented by: Dmitry Taubinsky (UC Berkeley)
Co-author(s): Philipp Strack (Yale University)

We study identification of time preferences from data sets where an agent at time 0 makes an advance commitment, and later at time 1 can revise their choice. A common intuition, motivating many empirical studies, is that systematic reversals toward certain alternatives imply time inconsistency. We show that this intuition is generally incorrect in environments with random taste shocks. Roughly speaking, the only data that rejects time-consistent expected utility maximization is when a time-0 choice is revealed to be strictly dominated at time 1 with probability 1. This result applies to rich choice sets; to cases where the analyst observes the complete ranking of alternatives in every period and state of the world; to environments where it is natural to impose additional assumptions like concavity; and to cases where the analyst has access to supplementary cardinal information. However, we prove that there is a class of empirical designs that does produce robust point identification of the degree of time inconsistency: designs that estimate agents’ willingness to pay for different alternatives at both time 0 and time 1, and where the marginal utility of money can be assumed to not vary with agents’ time-1 preferences for the different alternatives.

Tuesday, August 10, 2021

AUG 10
9:00 AM - 9:30 AM

Safe Spaces: Shelters or Tribes?

Presented by: Jean Tirole (Toulouse School of Economics)
AUG 10
9:30 AM - 10:00 AM

A Model of Justification

Presented by: Sarah Ridout (Harvard University)

I model decision-making constrained by morality, rationality, or other virtues. In addition to a primary preference over outcomes, the decision maker (DM) is characterized by a set of preferences that he considers justifiable. In each choice setting, he maximizes his primary preference over the subset of alternatives that maximize at least one of the justifiable preferences. The justification model unites a broad class of empirical work on distributional preferences, charitable donations, prejudice/discrimination, and corruption/bribery. I provide full behavioral characterizations of several variants of the justification model as well as practical tools for identifying primary preferences and justifications from choice behavior. I show that identification is partial in general, but full identification can be achieved by including lotteries in the domain and allowing for heterogeneity in both primary preferences and justifications. Since the heterogeneous model uses between-subject data, it is robust to consistency motives that may arise in within-subject experiments. I extend the heterogeneous model to information choice and show that it accounts for observed patterns of information demand and avoidance on ethical domains.

AUG 10
10:00 AM - 10:15 AM

Break

AUG 10
10:15 AM - 10:45 AM

How Flexible is that Functional Form? Measuring the Restrictiveness of Theories

Presented by: Annie Liang (Northwestern University)
Co-author(s): Drew Fudenberg (MIT) and Wayne Gao (University of Pennsylvania)

We propose a new way to quantify the restrictiveness of an economic model, based on how well the model fits simulated, hypothetical data sets. The data sets are drawn at random from a distribution that satisfies some application-dependent content restrictions (such as that people prefer more money to less). Models that can fit almost all hypothetical data well are not restrictive. To illustrate our approach, we evaluate the restrictiveness of popular behavioral models in two experimental settings—certainty equivalents and initial play— and explain how restrictiveness reveals new insights about each of the models.

AUG 10
10:45 AM - 11:15 AM

Choice and Complexity

Presented by: Jörg L. Spenkuch (Northwestern University)
Co-author(s): Yuval Salant (Northwestern University)

We study two dimensions of complexity that may affect individual decision-making. The first one is object complexity, which corresponds to the difficulty of evaluating any given object in the choice set. The second dimension is composition complexity, which refers to the difficulty of finding the best among similar alternatives. We develop a satisficing-with-evaluation-errors model that incorporates both dimensions and delivers sharp empirical predictions about their effect on choice behavior. We test these predictions in a novel data set with information on hundreds of millions of decisions in chess endgames. Chess endgames admit an objective measure of choice quality and, most importantly, have ample variation in object and composition complexity. Consistent with the theory, we document that even highly experienced decision makers are significantly more likely to make suboptimal choices as complexity increases along either dimension. Our analysis, therefore, helps to shed some of the first light on the role of complexity in decision-making outside of the laboratory.

AUG 10
11:15 AM - 11:30 AM

Break

AUG 10
11:30 AM - 12:00 PM

Incentive Complexity, Bounded Rationality, and Effort Provision

Presented by: David Huffman (University of Pittsburgh)
Co-author(s): Johannes Abeler (University of Oxford) and Collin Raymond (Purdue University)

This paper shows that dynamic incentives embedded in an organization’s workplace incentive scheme can be a shrouded attribute, due to contract complexity and worker bounded rationality. This is true in field experiments within the firm, and in complementary online experiments with real eort tasks. Structural estimates indicate that rational agents who fully understand the incentive scheme would behave sigificantly dierent from what we observe. A response to dynamic incentives does emerge when we reduce complexity or look at workers with higher cognitive ability. The results illustrate the potential value of complexity to organizations, they demonstrate that complex incentive contracts may allow firms to be achieve better than second-best, they identify specific features of contracts that can influence the eectiveness of incentives through the channel of complexity, and they imply heterogeneous eects of incentives depending on worker cognitive ability.

AUG 10
12:00 PM - 12:30 PM

The Negative Consequences of Loss-Framed Performance Incentives

Presented by: Alex Rees-Jones (The Wharton School, University of Pennsylvania)
Co-author(s): Lamar Pierce (Olin Business School, Washington University in St Louis) and Charlotte Blank (Maritz)

Behavioral economists have proposed that incentive contracts result in higher productivity when bonuses are "loss framed" prepaid then clawed back if targets are unmet. We test this claim in a large-scale field experiment. Holding financial incentives fixed, we randomized the pre- or postpayment of sales bonuses at 294 car dealerships. Prepayment was estimated to reduce sales by 5%, generating a revenue loss of $45 million over 4 months. We document, both empirically and theoretically, that negative effects of loss framing can arise due to an increase in incentives for "gaming" behaviors. Based on these claims, we reassess the common wisdom regarding the desirability of loss framing.

Saturday, August 7, 2021

Real estate auctions for turtledoves: Klemperer, Baldwin and Teytelboym in the Economist

 The Economist reports on efforts to reverse the decline of turtledove nesting sites:

How an auction is helping Britain’s turtle doves

"Paul Klemperer, Elizabeth Baldwin and Alex Teytelboym, all of Oxford University, are using economics to help. They have designed a reverse auction in which farmers bid publicly for contracts to provide suitable habitats. This is trickier than it sounds. Turtle doves need wildflower seeds to eat, shallow-sided open water to drink and thick scrubby hedgerows in which to nest—all in proximity. A farmer might wish to provide just one or two of these, and to rely on neighbours to provide the rest. Moreover, breeding pairs must be able to find the sites, but they must not be too clumped together. And finally, the habitats offered by farmers can vary in quality as well as price—a problem Mr Klemperer encountered during the global financial crisis, when designing an auction in which the Bank of England offered emergency loans to banks against collateral of varying quality.

"To solve it this time round, the economists constructed an index of turtle-dove happiness (tdh, or “ta-das”). An algorithm searches combinations of bids, seeking to maximise ta-das for a given budget. Bids both compete with and complement each other: a high-priced offer to grow wildflowers might beat a cheaper one if they would be nearer a nesting site, and would thus create more ta-das. The Royal Society for the Protection of Birds, a charity, has used the system in two pilot auctions in Norfolk and Suffolk, attracting 63 bidders. The latest closed in June, and seeds should be sown in the autumn.

"The experiments are funded by the government as part of a broader post-Brexit effort to redirect farming subsidies towards support for providing public goods. The European Union’s common agricultural policy, which rewards intensive farming, had led to the loss of diverse natural habitats for wildlife of all kinds."

Friday, August 6, 2021

Alternative kidney waitlist designs, by Agarwal, Ashlagi, Rees, Somaini, and Waldinger in Econometrica

 Here's a paper that seeks to take into account that patients waiting for a deceased organ transplant are forward looking, and make decisions based not just on their place in the current waitlist and the option being offered to them, but on what offers are likely coming, in equilibrium.

Equilibrium Allocations Under Alternative Waitlist Designs: Evidence From Deceased Donor Kidneys, by Nikhil Agarwal, Itai Ashlagi, Michael A. Rees, Paulo Somaini, Daniel Waldinger, Econometrica, Volume89, Issue1, January 2021, Pages 37-76

Abstract: Waitlists are often used to ration scarce resources, but the trade-offs in designing these mechanisms depend on agents' preferences. We study equilibrium allocations under alternative designs for the deceased donor kidney waitlist. We model the decision to accept an organ or wait for a preferable one as an optimal stopping problem and estimate preferences using administrative data from the New York City area. Our estimates show that while some kidney types are desirable for all patients, there is substantial match-specific heterogeneity in values. We then develop methods to evaluate alternative mechanisms, comparing their effects on patient welfare to an equivalent change in donor supply. Past reforms to the kidney waitlist primarily resulted in redistribution, with similar welfare and organ discard rates to the benchmark first-come, first-served mechanism. These mechanisms and other commonly studied theoretical benchmarks remain far from optimal. We design a mechanism that increases patient welfare by the equivalent of an 18.2% increase in donor supply.


"The estimated payoffs show that while some organs are systematically more desirable than others, there is substantial match-specific heterogeneity in values. For instance, organs from younger donors are preferred by all patients, but younger patients place a higher value on such organs. This and other sources of match-specific heterogeneity, such as immunological similarity, create scope for redesigning the allocation mechanism to improve match quality by incorporating detailed patient and donor characteristics into the priority system."

Thursday, August 5, 2021

Course allocation at the Technical University of Munich, by Martin Bichler and Soeren Merting

 Here's a paper describing a recently designed and implemented course assignment system at the Technical University of Munich:

Randomized Scheduling Mechanisms: Assigning Course Seats in a Fair and Efficient Way  by Martin Bichler and Soeren Merting

Abstract: Course assignment is a very widespread problem in education and beyond. Typically, students have preferences for bundles of course seats or course schedules over the week, but courses have limited capacity. This is an interesting and frequent application of distributed scheduling, where payments cannot be used to implement the efficient allocation. First-Come First-Served (FCFS) is simple and the most widely used assignment rule in practice, but it leads to inefficient outcomes and envy in the allocation. It was recently shown that randomized economic mechanisms that do not require monetary transfers can have attractive economic and computational properties, which were considered incompatible for deterministic alternatives. We use a mixed-methods design including field and laboratory experiments, a survey, and simulations to analyze such randomized mechanisms empirically. Implementing randomized scheduling in the field also required us to develop a solution to a new preference elicitation problem that is central to these mechanisms. The results of our empirical work shed light on the advantages that randomized scheduling mechanisms have over FCFS in the field, but also on the challenges. The resulting course assignment system was adopted permanently and is now used to solve course assignment problems with more than 1700 students every year.



Wednesday, August 4, 2021

Course allocation at Eötvös Loránd University, by Attila Rusznák, Péter Biró, and Rita Fleiner)

At Eötvös Loránd University in Hungary, there's a course allocation system that gives rise to intense course exchange after its official conclusion (some of which may be planned in advance). Here's a description and analysis:

Seat transfers in the course allocation mechanism of Eötvös Loránd University  by A. Rusznák, P. Biró and R. Fleiner, 2021 IEEE 15th International Symposium on Applied Computational Intelligence and Informatics (SACI), 2021, pp. 503-508, doi: 10.1109/SACI51354.2021.9465548.

"Abstract: We initiate the study of the course allocation mechanism of the largest Hungarian university, ELTE, based on a real data provided for three semesters in 2018-2019. Besides introducing their priority based mechanism and the structure of their course registration data provided, we analyse a special issue coming from a students’ survey related to seat transfer. We identify the seat transfer actions in the last stage of the mechanism from the data that we describe in a transfer graph, and we analyse this network observing interesting patterns."


"In Hungary the course allocations are conducted at every major university by the same administrative system, called Neptun, and most universities use a simple first-come-first-served method. However, the largest university in Hungary, ELTE, uses a three-phase priority-based method [12]. In the first phase the students can submit their most preferred bundles, and the university admission may adjust the quotas of the courses based on these initial inputs. The second phase is the most important, where the students are ranked at each course based on a scoring system and lottery for breaking ties. They have a week to select their best bundles, but the mechanism is dynamic, the students can be unsure whether they will really get admission to a course. After finalising the assignment based on priorities and quotas, in the third phase of the mechanism a simple first-come-first-served method is used to allocate the remaining open slots. This final round also facilitates the informal seat transfers and swaps, a topic that we focus on in this paper. We conducted an online survey at ELTE sent to all registered students, and we received more than 3000 replies in total, so we could identify the main practices and issues for this priority based mechanism. We also received the complete course allocation record from their Neptun system for three recent semesters in 2018-2019. We will use this rich data to check the issues and strategies reported in the students’ survey, starting with the analysis of the seat transfers and swaps in the last stage of the mechanism.

...

"One of most critical comments was concerned with the rejection of the students even from their main courses that fits in their ideal curriculum. Some students mentioned that they could only get admission to some of their important courses by getting a favour from another student, who had higher priority at that course, so could take it in the second stage, and then transfer the course to them in the third stage. The transfer can be observed in the data as the withdrawal of a student and an almost immediate registration by another student. In this paper we initiate the study of this issue by studying the course allocation record of ELTE for the years of 2018-2019, that we describe in the next section."


Tuesday, August 3, 2021

Some history of the National Resident Matching Program

 Here's a short history of the resident match, including the recent merger of MD and DO student applicants, and some thoughts about current issues.

Acad Med. 2021 Aug; 96(8): 1116–1119.

The Single Match: Reflections on the National Resident Matching Program’s Sustained Partnership With Learners  by Zaid I. Almarzooq, MBBCh, Heather A Lillemoe, MD, Ebony White-Manigault, MPH, Thomas Wickham, DO, MPH, and Laurie S. Curtin, PhD

Here's the concluding paragraph:

"The NRMP has come a long way, but we recognize that the residency selection process still is fraught with stress and uncertainty, albeit for reasons different from those that prompted creation of the Match. Application inflation, debt, and a disproportionate reliance on licensure exam scores have contributed to a climate that makes the transition to residency perhaps as stressful as when the Match was created nearly 70 years ago. 18,19 However, as the NRMP moves beyond achievement of the Single Match milestone and we reflect on the organization’s history of responding to the needs of its constituents, we believe the NRMP will continue to evolve and identify innovative and meaningful ways to address learner needs. We hope learners of all kinds value that commitment and stand ready to support the NRMP’s efforts to continually improve the transition to residency."

Monday, August 2, 2021

Coffee and civilization, at the Museum of Islamic Art in Jerusalem

“Coffee – East and West” is the title of the new exhibition at the Museum of Islamic Art in Jerusalem." Here's the story from Haaretz:

How Coffee Revolutionized Jerusalem Social Life in the 16th Century  by Ronit Vered

"In the mid-16th century, complaints from residents of Jerusalem reached the palace of the sultan in Istanbul: As a result of the new custom of visiting coffeehouses, which was spreading among the city’s Muslim denizens, many of them were not praying five times a day, as prescribed by Islam.

...

"Those first cafés – others were opened around the same time in Gaza, Ramle, Nablus, Damascus and Aleppo – operated all day and all night, a sensational innovation in the pre-electricity age, when people usually went to bed early.

...

"The presence of the clients, some of whom would be seated in the street, attracted peddlers, who offered skewers of roasted meat, another nuisance and source of dirt. Tobacco was another new pleasure that the authorities and clerics tried to fight – again unsuccessfully – and the smoke of water pipes, sometimes mingled with the aroma of opium, became an inseparable part of the new coffeehouse experience. And because all the clients of these new institutions were men, for whom the public space, both religious and secular, was exclusively reserved in the Ottoman Empire – the coffeehouses were also accused of encouraging homosexuality and of generating an atmosphere liable to give rise to sexual harassment.

...

"“The story of this country is singular, because two coffee traditions coexisted here over time: Ottoman-Turkish-Arabian coffee that is cooked; and Western coffee, which is filtered and prepared by a variety of methods and in different utensils,” says Yahel Shefer, the exhibition’s co-curator (with Noa Berger), who spent the past five years studying the subject and collecting rare items associated with the material culture that sprang up side by side with the social etiquette that accompanies coffee consumption.

...

Coffee, she adds, “also gives rise to a unique institution dedicated to it, which becomes the most popular gathering place in the world. In Palestine, coffeehouses were established in the Ottoman-Arab tradition but also in the European-Western tradition, which was brought by the [German] Templers and by Jewish immigrants from Central and Eastern Europe. In the early 20th century, people in Zion Square in Jerusalem would drink Turkish-Arabian coffee in the morning, and in the afternoon hang out in the famous Café Europa.”

...

"The owners of the Jerusalem cafés opened by the mid-16th century were for the most part Muslims, though they were frequented by Jews and Christians as well. Jewish clerics joined their Muslim colleagues in expressing misgivings about the popular new beverage and the social institution that was springing up around it.

“The first Hebrew mention of a coffeehouse appears in Safed in the 1560s,” says Prof. Yaron Ben-Naeh from the department of Jewish history at the Hebrew University. “The Safed café is mentioned as having a dubious reputation, or in the words of the text, it was a place of ‘frivolous company.’ The religious arbiters of Judaism, like their Muslim counterparts, are undecided about whether it is permitted to drink coffee. Isaac Luria, the holy ‘Ari’ [“Lion,” his epithet], the greatest of the kabbalists, rules that drinking coffee is forbidden, but the believers simply ignore it. No one abides by the prohibitions.”

...

"Early evidence for the institutionalization of a local coffee culture is the existence of the coffee-sellers’ guild, which appears in the records of the Muslim court in Jerusalem in 1590."

Sunday, August 1, 2021

Market design, redesigned (in startups and university labs)

Market design is evolving, and new ways of organizing it are being explored. 

In my post yesterday, I talked about the early work on school choice that Atila Abdulkadiroglu, Parag Pathak, Tayfun Sonmez and I did under the auspices of Boston schools Superintendent Tom Payzant. The market design by economists in Boston, as with the earlier successful effort in New York City, was conducted as part of our research work as professors.  Not a penny changed hands, and we all felt good about that.

But if there was a flaw in that working arrangement, it was that no contracts were signed, and so as staff turnover took place in school districts, and the individuals we had dealt with departed, the district's institutional memory eroded, and they didn't always remember to turn to us when difficulties arose that we could have helped them with. Partly to address that, and to have at least one person able to devote time to approaching school districts, Parag and Atila and I supported Neil Dorosin in founding the non-profit  Institute for Innovation in Public School Choice, which during its lifetime helped school choice in a number of American cities, including Denver, New Orleans, and Washington D.C.

Parag and Atila went on to be founding members of MIT's School Effectiveness and Inequality Intiative, which just this week was "relaunched" with a different team as MIT Blueprint Labs, which aims to build on MIT's strengths not just in school choice but in a much wider area of market design and policy analysis, and to be a lab with a large staff and extensive fundraising:

Launch announcement of MIT Blueprint Labs


Featuring



 
Professor Parag Pathak
Faculty Director
MIT SEII / Blueprint Labs
Research spotlight: K-12 education

 


 
Professor Joshua Angrist
Faculty Director
MIT SEII / Blueprint Labs
Research spotlight: Higher education and the workforce

 


 
Professor Nikhil Agarwal
Faculty Director, Health Care
MIT SEII / Blueprint Labs
Research spotlight: Health care




 
Eryn Heying
Executive Director
MIT SEII / Blueprint Labs

 

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

Update: and here's the Blueprint Labs new (announced Aug. 11) website: https://blueprintlabs.mit.edu/

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In a related development, Parag has cofounded a new for-profit Ed-tech startup called Avela, that plans to spread the technologies he's helped pioneer.  A for-profit firm has some funding, employment and investing opportunities that aren't available to non-profits or university labs, let alone to teams of professors organized informally. And as in the Blueprint Lab, they hope that the tools they will develop will be readily applicable to quite a broad range of matching markets and market designs.

***************
These various efforts look to me like design experiments themselves, in the search for sustainable ways of making market design a permanent part of not only the research that economists do, but of the practical effects we hope to foster.

Observing all this from the West Coast, and over several decades, I can't help noticing that these institutional changes have been accompanied by team changes, and shifting collaborations among market designers.  

There are also a growing number of different kinds of economists (and computer scientists, operations researchers and businesses) involved in designing and assessing markets, and market design has not only changed markets, but changed the way economists work, in many small and large ways.  Econometricians and development economists have led the way in organizing large labs, and market design may be heading in that direction as well. Big and small tech firms have also started to think of market design as among their core competencies, and as a discipline they should be hiring.
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Here in California, I'd be remiss if I didn't mention that my colleague Paul Milgrom has for a long time engaged in auction design through his for-profit company Auctionomics.
And Susan Athey is the faculty director of a big lab at Stanford using different technologies in other areas of market design:  the Golub Capital Social Impact Lab, which describes itself this way:

"We use digital technology and social science research to improve the effectiveness of leading social sector organizations.

"Based out of Stanford GSB, the lab is a research initiative of affiliated academics and staff, as well as researchers and students, who are passionate about conducting research that guides and improves the process of innovation.

"Research Approach

We collaborate with a wide range of organizations, from large firms to smaller startups, for-profits to nonprofits, and NGOs to governments, to conduct research. Then, we apply and disseminate our insights to achieve social impact at large scale."