Friday, August 4, 2023

AEA Guidance on the 2023-24 Economics Job Market Cycle

In an effort to forestall/halt/slow unravelling in the market for new Ph.D. economists, the American Economic Association has released some guidelines regarding interviews and offers.

 AEA Guidance on the 2023-24 Economics Job Market Cycle


July 27, 2023

To: Members of the American Economic Association and Economics Department Chairs
From: Peter L. Rousseau, Secretary-Treasurer
Subject: AEA Guidance on the 2023-24 Economics Job Market Cycle

AEA Guidance on the 2023-24 Economics Job Market Cycle

The AEA Executive Committee, in conjunction with its Committee on the Job Market, recognizes that it is to the benefit of the profession if the job market for economists is thick, with many employers and job candidates participating in the same stages at the same time.  Moreover, the AEA's goals of diversity, equity, and inclusion are fostered by having a timeline that remains widely known and accepted, ensuring that candidates can correctly anticipate when each stage will occur.  The AEA has a role to establish professional norms, which includes ensuring fair treatment of job candidates, including that they have enough time to consider job offers.

With these goals in mind, and in light of inquiries from both job candidates and employers about how to proceed, the AEA asks that departments and other employers consider the following timeline for initial interviews and “flyouts” in the upcoming job cycle (2023-24). 

Timing of interview invitations
The AEA suggests that employers wait to extend interview invitations until the day after job market signals are transmitted to employers (roughly December 1).

Rationale: the AEA created the signaling mechanism to reduce the problem of asymmetric information and allow job candidates to credibly signal their interest to two employers. The AEA asks that employers wait to extend interview invitations until those signals have been transmitted, and to use that information to finalize their set of candidates to interview. This helps the job market in several ways: it reduces the problem of imperfect information, it helps ensure a thick market at each stage, and it promotes the AEA’s goals of diversity, equity, and inclusion. Job candidates from historically under-represented groups may lack informal networks and thus may especially rely on the signals to convey their interest. Waiting to review the signals before issuing invitations promotes a fairer, more equitable process.

We also ask that all employers indicate on EconTrack when they have extended interview invitations. This allows candidates to learn about the status of searches without visiting websites posting crowd-sourced information and potentially inappropriate other content.

Timing of interviews
Initial interviews may take place any time after the AEA signals are sent (roughly December 1). The AEA recommends that all initial interviews take place virtually (e.g. by Zoom). We suggest that interviews not take place during the AEA meeting itself (January 5-7, 2024).

Rationale: In the past, interviews were conducted in-person at the AEA/ASSA meetings. This promoted thickness of the market, because most candidates and employers were present at the meetings, but had the disadvantage of precluding both job candidates and interviewers from fully participating in AEA/ASSA sessions. 

Initial job interviews went online during COVID, and feedback indicated that the benefits of virtual first-round interviews (e.g. low monetary cost, zero cost in travel time, scheduling flexibility, convenience) outweighed the limitations (e.g. less rich interaction).

We ask that interviews NOT take place during the AEA/ASSA meetings (January 5-7, 2024) in order to allow job candidates and interviewers to participate in the conference.

Timing of flyouts
Flyouts have historically happened at times appropriate for the employer, and the AEA sees no reason to suggest otherwise.  We ask that all employers indicate on EconTrack when they have extended flyout invitations. Unlike with interviews, the AEA does not take a position on whether flyouts should be virtual or in-person.

Timing of offers and “exploding” offers
In order to ensure that the job market remains sufficiently synchronized and thick, and that candidates have a chance to compare offers, the AEA recommends that employers leave job offers open (i.e. do not require candidates to accept or decline) until at least January 31.

The AEA also strongly recommends that employers give candidates at least two weeks to consider their job offer.  We recognize that offers made late in the job market season (e.g., March or later) may be of shorter duration.  In some circumstances, employers are under heavy pressure to give less time to candidates for various reasons.  If that is absolutely necessary, we recommend that employers give candidates a minimum of one week to consider the offer, and that candidates be given advance notice of this (e.g. at the flyout stage) whenever possible. 

Rationale: Recently, there is concern about a rise in “exploding offers” – i.e., offers for which candidates are given too few days to sufficiently consider the offer and their alternatives. This can prevent candidates from learning about their options or comparing offers, and at the extreme can be coercive.  Giving candidates two weeks (or, late in the job market season, at least one week) to consider an offer is a reasonable standard.

We also ask that all employers indicate on EconTrack when they have completed or closed their search.

Job market institutions and mechanisms
Please keep in mind the various job market institutions and mechanisms created by the AEA to improve the job market:

We encourage all employers to review and abide by Best Practices for Economists to Build a More Diverse, Inclusive, and Productive Profession, and in particular those for conducting a fair recruiting process.

Thank you for helping to ensure a transparent and equitable job market for new Ph.D. economists.  

Thursday, August 3, 2023

Market design conferences: Marseille, 11 – 15 December, and Santiago 18-20 December, 2023

 Here's the conference announcement from Marseille: 

From matchings to markets. A tale of Mathematics, Economics and Computer Science. Des matchings aux marchés. Une histoire de mathématiques. 11 – 15 December 2023, at the CIRM center in Marseille, France.

"This conference aims at gathering researchers from the fields of mathematics, computer science and economics (broadly defined) sharing common interests in the study of matching problems and the design of their markets. The presentations can cover a wide variety of topics and methods: specific matching markets, general models, theory, empirical analysis. . . etc"

Scientific Committee 
Comité scientifique 

Nick Arnosti (University of Minnesota)
Michal Feldman (Tel Aviv University)
Alfred Galichon (Science Po & New York University)
Michael Jordan (University of Stanford)
Claire Mathieu (CNRS – Collège France)

Organizing Committee
Comité d’organisation

Nick Arnosti (University of Minnesota)
Julien Combe (CREST & École Polytechnique)
Claire Mathieu (CNRS – Paris)
Vianney Perchet (ENSAE & Criteo AI lab)

*******
And here's the announcement of the conference in Santiago:

Keynote Speakers
Omar Besbes
Columbia University
Nicole Immorlica
Microsoft Research New England
Alvin Roth
Stanford University
Participants



Itai Ashlagi
Stanford University

Martin Castillo
New York University

Francisco Castro
University of California

José Correa
Universidad de Chile

Sofía Correa
Universidad de Chile

Andrés Cristi
Universidad de Chile

Juan Escobar
Universidad de Chile

Maximilien Ficht
Universidad de Chile

Yannai Gonczarowski
Harvard University

Nima Haghpanah
Pennsylvania State University

Jason Hartline
Northwestern University

Tibor Heumann
Pontificia Universidad Católica de Chile

Rahmi Ilkilic
Universidad de Chile

Revi Jagadeesan
Stanford University

Max Klimm
Technische Universität Berlin

Tomás Larroucau
Arizona State University

Mariana Laverde
Boston College

Ilan Lobel
New York University

Alfonso Montes
Universidad de Chile

Marcelo Olivares
Universidad de Chile

Renato Paes Leme
Google Research New York

Juan Sebastián Pereyra
Universidad de Montevideo

Adriana Piazza
Universidad de Chile

Dana Pizarro
Universidad de O'Higgins

Marco Scarsini
Universidad Luiss Guido Carli

Vasiliki Skreta
University of Texas at Austin

Laura Vargas-Koch
ETH Zurich

Víctor Verdugo
Universidad de O'Higgins

Matt Weinberg
Princeton University

Gabriel Weintraub
Stanford University

Asaf Zeevi
Columbia University

Wednesday, August 2, 2023

SITE 2023 Session 2: Market Design Thu, Aug 3 2023, 9:00am - Fri, Aug 4 2023, 5:00pm PDT

 SITE 2023  Session 2: Market Design  Thu, Aug 3 2023, 9:00am - Fri, Aug 4 2023, 5:00pm PDT

Landau Economics Building, 579 Jane Stanford Way, Stanford, CA 94305

ORGANIZED BY  Mohammad Akbarpour, Stanford University, Piotr Dworczak, Northwestern University, Ravi Jagadeesan, Stanford University, Shengwu Li, Harvard University, Ellen Muir, Harvard University

This session seeks to bring together researchers in economics, computer science, and operations research working on market design.  We’re aiming for a roughly even split between theory papers and empirical and experimental papers.  In addition to faculty members, we also invite graduate students on the job market to submit their paper for shorter graduate student talks.

Thursday, August 3, 2023 8:30 AM - 9:00 AM PDT Check-in & Breakfast

9:00 AM - 9:45 AM PDT

The Combinatorial Multi-Round Ascending Auction

Presented by: Bernhard Kasberger (Heinrich Heine University Düsseldorf). Co-author(s): Alexander Teytelboym (University of Oxford)

The Combinatorial Multi-Round Auction (CMRA) is a new auction format which has already been used in several recent European spectrum auctions. We characterize equilibria in the CMRA that feature auction-specific forms of truthful bidding, demand expansion, and demand reduction for settings in which bidders have either decreasing or non-decreasing marginal values. In particular, we establish sufficient conditions for riskless collusion. Overall, our results suggest that the CMRA might be an attractive auction design in the presence of highly complementary goods on sale. We discuss to what extent our theory is consistent with outcomes data in Danish spectrum auctions and how our predictions can be tested using bidding data.


AUG 3  9:45 AM - 10:15 AM PDT  Break

AUG 3  10:15 AM - 11:00 AM PDT

Entry and Exit in Treasury Auctions 

Presented by: Milena Wittwer (Boston College)   Co-author(s): Jason Allen (Bank of Canada), Ali Hortaçsu (University of Chicago), and Eric Richert (Princeton University)

Regulated banks—dealers—have traditionally dominated Treasury markets. More recently, less regulated institutions, such as hedge funds, have entered these markets. Understanding this phenomenon and its consequences is challenging because there is limited data on how hedge funds trade. We document steady dealer exit and rising, yet volatile hedge fund participation in the Canadian primary market. To understand hedge fund entry and to trade-off the benefits of greater competition against the costs of higher market volatility, we introduce and estimate a model with multi-unit auctions and endogenous entry. A counterfactual analysis suggests that hedge fund entry was largely driven by dealer exit, and that competition benefits are large compared to volatility costs. This trade-off is likely present in other markets with regular and irregular participants, which can be studied in our framework.

AUG 3  11:00 AM - 11:30 AM PDT Break

AUG 3 11:30 AM - 12:15 PM PDT

Principal Trading Arrangements: Optimality under Temporary and Permanent Price Impact

Presented by: Markus Baldauf (University of British Columbia)

Co-author(s): Christoph Frei (University of Alberta) and Joshua Mollner (Northwestern University)

We study the optimal execution problem in a principal-agent setting. A client (e.g., a pension fund, endowment, or other institution) contracts to purchase a large position from a dealer at a future point in time. In the interim, the dealer acquires the position from the market, choosing how to divide his trading across time. Price impact may have temporary and permanent components. There is hidden action in that the client cannot directly dictate the dealer’s trades. Rather, she chooses a contract with the goal of minimizing her expected payment, given the price process and an understanding of the dealer’s incentives. Many contracts used in practice prescribe a payment equal to some weighted average of the market prices within the execution window. We explicitly characterize the optimal such weights: they are symmetric and generally U-shaped over time. This U-shape is strengthened by permanent price impact and weakened by both temporary price impact and dealer risk aversion. In contrast, the first-best solution (which reduces to a classical optimal execution problem) is invariant to these parameters. Back-of-the-envelope calculations suggest that switching to our optimal contract could save clients billions of dollars per year.

AUG 3  12:15 PM - 1:45 PM PDT Lunch

AUG 3 1:45 PM - 2:05 PM PDT

Principal-Agent Problems with Costly Contractibility: A Foundation for Incomplete Contracts

Presented by: Roberto Corrao (Massachusetts Institute of Technology)

Co-author(s): Joel P. Flynn (Massachusetts Institute of Technology) and Karthik A. Sastry (Harvard University)

We study implementable and optimal mechanisms in principal-agent problems when agents’ actions are partially contractible. Fixing the extent of contractibility, we characterize implementable and optimal contracts. We provide conditions under which optimal mechanisms specify discontinuous payments for agents’ actions that take the form of “fines” or “bonuses.” When the principal can choose the extent of contractibility and additional contractibility has strictly positive marginal cost, we show that any optimal contract features a finite menu. This provides a foundation for the optimal incompleteness of contracts: even under arbitrarily small costs of contracting, optimal contracts specify finitely many contingencies. We apply these results to study optimal regulation of imperfectly contractible pollution, optimal incentive contracts when employees work from home, and the optimal pricing and remuneration of content creation.


AUG 3 2:05 PM - 2:25 PM PDT

The Simple Economics of Optimal Bundling

Presented by: Frank Yang (Stanford University)

We study optimal bundling when consumers differ in one dimension. We introduce a partial order on the set of bundles defined by (i) set inclusion and (ii) sales volumes (if sold alone and priced optimally). We show that if the undominated bundles with respect to this partial order are nested, then nested bundling (tiered pricing) is optimal. We characterize which nested menu is optimal: Selling a given menu of nested bundles is optimal if a smaller bundle in (out of) the menu sells more (less) than a bigger bundle in the menu. We present three applications of these insights: the first two connect optimal bundling and quality design to price elasticities and cost structures; the last one establishes a necessary and sufficient condition for costly screening to be optimal when a principal can use both price and nonprice screening instruments.

AUG 3 2:25 PM - 2:45 PM PDT

Incentive Compatibility in the Auto-bidding World

Presented by: Yeganeh Alimohammadi (Stanford University)

Co-author(s): Aranyak Mehta (Google Research) and Andres Perlroth (Google Research)

Auto-bidding has recently become a popular feature in ad auctions. This feature enables advertisers to simply provide high-level constraints and goals to an automated agent, which optimizes their auction bids on their behalf. These auto-bidding intermediaries interact in a decentralized manner in the underlying auctions, leading to new interesting practical and theoretical questions on auction design, for example, in understanding the bidding equilibrium properties between auto-bidder intermediaries for different auctions. In this paper, we examine the effect of different auctions on the incentives of advertisers to report their constraints to the auto-bidder intermediaries. More precisely, we study whether canonical auctions such as first price auction (FPA) and second price auction (SPA) are auto-bidding incentive compatible (AIC): whether an advertiser can gain by misreporting their constraints to the autobidder.

AUG 3 2:45 PM - 3:05 PM PDT

An Empirical Framework for Waitlists with Endogenous Priority: Evaluating the Heart Transplant Waitlist

Presented by: Kurt Sweat (Stanford University)

Waitlists that prioritize specific agents to achieve certain policy goals are common in practice, but policy makers often use endogenous characteristics of agents to assign waitlist priority. I study the heart transplant waitlist in the United States where the treatment that a patient receives is used to assign waitlist priority. Policy makers recently changed the prioritization in an attempt to reduce waitlist mortality by assigning higher priority to patients receiving specific treatments associated with high waitlist mortality. First, I document a significant response to waitlist incentives as usage of these treatments tripled once they were assigned higher priority, while usage of other treatments declined. Then, I estimate a dynamic discrete choice model of the treatment and transplant decision for patients on the waitlist to evaluate the effect of the change on the distribution of patient outcomes. Counterfactual outcomes estimated from the model demonstrate that the current design results in healthier patients receiving high priority treatments and better long-run outcomes. This is contrary to the policy makers goals of transplanting sicker patients and suggests that patients should be targeted using characteristics other than treatments.


AUG 3  3:05 PM - 3:45 PM PDT  Break

AUG 3 3:45 PM - 4:30 PM PDT

Trading with a Group

Presented by: Elliot Lipnowski (Columbia University)

Co-author(s): Nima Haghpanah (Pennsylvania State University) and Aditya Kuvalekar (University of Essex)

A buyer trades with a group of sellers whose heterogeneous willingness to trade is private information. She must trade with all sellers or none, and is required to offer sellers identical terms of trade. We characterize the optimal mechanism: trade occurs if and only if the buyer's benefit of trade exceeds a weighted average of sellers' virtual values. These weights are endogenous, with sellers who are less ex-ante inclined to trade being given greater influence. This mechanism uses sellers' private information in a continuous way, and always outperforms posted price mechanisms. In an extension, we characterize the entire Pareto frontier.


AUG 3  4:30 PM - 5:00 PM PDT Break

AUG 3 5:00 PM - 5:45 PM PDT Matching with Costly Interviews: The Benefits of Asynchronous Offers

Presented by: Akhil Vohra (University of Georgia)

Co-author(s): Nathan Yoda (University of Georgia)

In many matching markets, matches are formed after costly interviews. We analyze the welfare implications of costly interviewing in a model of worker-firm matching. We use our model to understand the trade-offs between a centralized matching system and a decentralized one, where matches can occur at any time. Centralized matching with a common offer date leads to coordination issues in the interview stage. Each firm must incorporate the externality imposed by the interview decisions of the firms ranked above it when deciding on its interview list. As a result, low-ranked firms often fail to interview some candidates that ex-ante have high match quality. A decentralized setting with exploding offers generates, at a minimum, the same welfare as the centralized setting, though the set of candidates who receive interviews is different. Total welfare is generally maximized with a system that ensures firms interview and match in sequence, clearing the market for the next firm. Such asynchronicity reduces interview congestion. This system can be implemented by encouraging top firms to interview and match early and allowing candidates to renege on offers.

AUG 3 6:30 PM - 8:30 PM PDT  Dinner

Friday, August 4, 2023

8:30 AM - 9:00 AM PDT Check-in and Breakfast

AUG 4  9:00 AM - 9:45 AM PDT

Describing Deferred Acceptance to Participants: Experimental Analysis

Presented by: Ori Heffetz (Cornell University and Hebrew University)

Co-author(s): Yannai Gonczarowski (Harvard University), Guy Ishai (The Hebrew University of Jerusalem), and Clayton Thomas (Princeton University)

Designed markets often relies on carefully crafted descriptions of mechanisms. By and large, these descriptions implicitly attempt to convey as directly as possible how outcomes are calculated. Are there principled, alternative theories of how to construct descriptions to expose different properties of mechanisms? Recently-proposed menu descriptions aim to provide such a theory towards exposing the strategyproofness of real-world mechanisms such as Deferred Acceptance. We design an incentivized experiment to test the ability of a menu description (compared to a traditional description) to affect participant behavior and their understanding of strategyproofness. We also design treatments conveying the property of strategyproofness itself rather than the full details of the mechanism, with one treatment inspired by traditional definitions and one inspired by menu descriptions.


AUG 4  9:45 AM - 10:15 AM PDT Break

AUG 4 10:15 AM - 11:00 AM PDT

An Experimental Evaluation of Deferred Acceptance

Presented by: Jonathan Davis (University of Oregon)

Co-author(s): Kyle Greenberg (West Point) and Damon Jones (University of Chicago)

We present evidence from a randomized trial of the impact of matching workers to jobs using the deferred acceptance (DA) algorithm. Our setting is the U.S. Army’s annual many-to-one marketplace that matches over 14,000 officers to units. Officers and jobs are partitioned into over 100 distinct markets, our unit of randomization. Matching with DA reduced officers’ attrition in their first year in their new match by 16.9 percent, but these gains disappear in the second year. We can rule out a 1.5 pp reduction in attrition within two years. Matching with DA had no impact on performance evaluations or promotions. Although matching with DA increased truthful preference reporting by a statistically significant 10 percent, many officers matched by DA misreport their true preferences. We present new evidence suggesting that communication and coordination of preferences may limit the benefits of strategyproofness in matching markets where each side actively ranks the other.


AUG 4  11:00 AM - 11:30 AM PDT Break

AUG 4 11:30 AM - 12:15 PM PDT

Design on Matroids: Diversity vs Meritocracy

Presented by: M. Bumin Yenmez (Boston College)

Co-author(s): Isa E. Hafalir (University of Technology Sydney), Fuhito Kojima (University of Tokyo), and Koji Yokote (University of Tokyo)

We provide optimal solutions to an institution that has dual goals of diversity and meritocracy when choosing from a set of applications. For example, in college admissions, administrators may want to admit a diverse set in addition to choosing students with the highest qualifications. We provide a class of choice rules that maximize merit subject to attaining a diversity level. Using this class, we find all subsets of applications on the diversity-merit Pareto frontier. In addition, we provide two novel characterizations of matroids.

AUG 4  12:15 PM - 1:45 PM PDT Lunch

AUG 4  1:45 PM - 2:30 PM PDT

Pareto Improvements in the Contest for College Admissions

Presented by: Ron Siegel (Pennsylvania State University)

Co-author(s): Kala Krishma (Pennsylvania State University), Sergey Lychagin (Central European University), Wojciech Olszewski (Northwestern University), and Chloe Tergiman (Pennsylvania State University)

College admissions in many countries are based on a centrally administered test. Applicants invest a great deal of resources to improve their performance on the test, and there is growing concern about the large costs associated with these activities. We consider modifying such tests by introducing performance-disclosure policies that pool intervals of performance rankings, and investigate how such policies can improve students’ welfare in a Pareto sense. Pooling affects the equilibrium allocation of students.

AUG 4 2:30 PM - 3:00 PM PDT  Break

AUG 4 3:00 PM - 3:45 PM PDT

Test-Optional Admissions 

Presented by: Alex Frankel (University of Chicago)

Co-author(s): Wouter Dessein (Columbia University) and Navin Kartik (Columbia University)

The Covid-19 pandemic has accelerated the trend of many colleges moving to test-optional, and in some cases test-blind, admissions policies. A frequent claim is that by not seeing standardized test scores, a college is able to admit a student body that it prefers, such as one with more diversity. But how can observing less information allow a college to improve its decisions? We argue that test-optional policies may be driven by social pressure on colleges’ admission decisions. We propose a model of college admissions in which a college disagrees with society on which students should be admitted. We show how the college can use a test-optional policy to reduce its “disagreement cost” with society, regardless of whether this results in a preferred student pool. We discuss which students either benefit from or are harmed by a test-optional policy. In an application, we study how a ban on using race in admissions may result in more colleges going test optional or test blind.


AUG 4  3:45 PM - 4:15 PM PDT Break

AUG 4  4:15 PM - 5:00 PM PDT

Equal Pay for Similar Work

Presented by: Bobby Pakzad-Hurson (Brown University)

Co-author(s): Diego Gentile Passaro (Brown University) and Fuhito Kojima (University of Tokyo)

Equal pay laws increasingly require that workers doing “similar” work are paid equal wages within a firm. We study such “equal pay for similar work” (EPSW) policies theoretically and empirically. In our model, we show that when EPSW restricts firms by protected class (e.g. no woman can be paid less than any similar man, and vice versa) firms segregate their workforce by gender in equilibrium. This endogenously lowers competition for workers, as it becomes costly for firms to poach from one another–doing so exposes them to the bite of the policy. When there are more men than women, EPSW leads to an increase in the equilibrium gender wage gap. For a sufficiently high ratio of men to women, there exist equilibria with arbitrarily low wages for women, leading to a particularly large wage gap. By contrast, EPSW that is not based on protected class can decrease the equilibrium wage gap. We test our model predictions using a difference-in-difference approach to analyze a gender-based EPSW enacted in Chile in 2009. We find that the EPSW increases the share of employees working at gender-segregated firms by 3% and increases the gender wage gap by 3%.

Tuesday, August 1, 2023

Ted Groves interviewed by Sandeep Baliga (video)

Ted Groves reflects on his career and collaborations, including his famous work with John Ledyard

 


Optimal allocation of public goods: A solution to the" free rider" problem

GrovesJ Ledyard - Econometrica: Journal of the Econometric Society, 1977 - JSTOR