Monday, September 19, 2016

Who Gets What and Why, in China

I'll be travelling to China today, to speak in Changsha and Lanzhou, as a guest of the Times Media Group, to talk about the Chinese edition of my book Who Gets What and Why.

Here's a news story...
诺奖得主来华:共享经济时代如何优化资源配置?
Nobel Laureate in China: how to optimize the sharing of economic resources?

Google translate has trouble with my name in Chinese:  here are some variants they produce:
Erwin · E · Ross (Alvin E. Roth)
Elvin Ross

Sunday, September 18, 2016

Public schools in Indianapolis advertise for enrollment, in competition with private schools

There's an enrollment contest underway in Indianapolis, and a new law against cash bonuses for referrals.
The Indianapolis Business Journal has the story:
Competition for school kids heats up across Indy

"Most Indianapolis kids went back to class in early August. But across town, billboards, yard signs and mailers put out by schools are making a last-minute pitch to parents: Enroll your child here.

"Public schools—including traditional, district-run schools and charters—are employing ever-more sophisticated advertising and marketing campaigns. The goal is to meet enrollment targets by the time the official state count day rolls around. This year, a school’s attendance on Sept. 16 determines its funding levels for the fall semester.
...
"Carpe Diem Meridian charter school’s 2015 marketing campaign tactic—offering $100 gift cards to anyone who referred a student who enrolled—was later that year made illegal by the Indiana General Assembly.

"The law says that a “school may not offer or give, as an enrollment incentive, any item that has monetary value, including cash or a gift card that may be used at a retail store, grocery store, online store, or other commercial enterprise” to prospective students in exchange for enrolling or to anyone who makes referrals."

Saturday, September 17, 2016

Unraveling of apprenticeships in Switzerland

The Neue Zurcher Zeitung has the story: Die heikle Jagd nach den besten Lehrlingen von Hansueli Schöchli
Die Lehrstellen in der Schweiz werden zum Teil «zu früh» vergeben. Absprachen zwischen den Lehrbetrieben wären ein Gegenmittel. Doch solche Absprachen scheitern oft.

Google translate: "The tricky hunt for the best apprentices--The apprenticeships in Switzerland are awarded partly "too early". Agreements between educational establishments would be an antidote. But such agreements often fail."

Friday, September 16, 2016

Decentralized College Admissions by Che and Koh

In the Journal of Political Economy:


We study decentralized college admissions with uncertain student preferences. Colleges strategically admit students likely to be overlooked by competitors. Highly ranked students may receive fewer admissions or have a higher chance of receiving no admissions than those ranked below. When students’ attributes are multidimensional, colleges avoid head-on competition by placing excessive weight on school-specific attributes such as essays. Restricting the number of applications or wait-listing alleviates enrollment uncertainty, but the outcomes are inefficient and unfair. A centralized matching via Gale and Shapley’s deferred acceptance algorithm attains efficiency and fairness but may make some colleges worse off than under decentralized matching.

The Handbook of Experimental Economics, volume 2, edited by John Kagel and Al Roth (forthcoming Sept 27:)


The Handbook of Experimental Economics, Volume 2 Hardcover –  forthcoming, September 27, 2016
by John H. Kagel (Editor), Alvin E. Roth (Editor)

from Princeton University Press
Table of Contents [PDF] pdf-icon


from Amazon

From the Back Cover

"This new volume of Kagel and Roth's indispensable handbook covers the latest dramatic developments that have led experimental economics into areas such as market design and neuroeconomics, and also offers fresh insights into more traditional areas. It is all here, and all told in a manner both informative and engaging."--Gary Bolton, University of Texas, Dallas
"Kagel and Roth have done it again. While the first volume of the Handbook showed how experimental economics had reached its maturity as a scientific method, this second volume shows just how wide its reach has become, and how deep these tools can take our understanding of economic theory and human behavior. This book will change the way the world views economics."--James Andreoni, University of California, San Diego
"The contributors provide insights that will be invaluable to anyone seeking a deeper understanding of the issues at hand. I know of no other book that covers the same breadth of material in the same way. People will use this as a reference book for many years to come."--Tim Salmon, Southern Methodist University
"A worthy successor to the first volume. This ambitious and well-written book will appeal to a broad economic audience."--Tom Wilkening, University of Melbourne
"I wish every economist and economics graduate student would read this book. Those who are considering running experiments should be forced to; this is a bible in how to run good experiments. Every chapter is amazingly comprehensive and has been written by a true expert in the field. But economists who would never dream about running an experiment can benefit from reading this just as much. The beauty of experiments is that they force theorists to think carefully about their theories."--Richard Thaler, Cornell University
"This Handbook surveys one of the most important developments in economics in the last decade, the flowering of experimental economics. Led by two of the leaders of current economic theory and experimental economics, an impressive group of researchers provides the reader with an excellent up-to-date overview of one of the most fascinating and promising areas of current economic research."--Ariel Rubinstein, Princeton University
"The Handbook is not only a contribution to experimental economics, it is a major contribution to social science. It successfully combines the rigor and clarity of economic analysis with a commitment to open-minded examination of data, and a refreshing willingness to question dogma. Every student of human choice and action will find this text useful."--Daniel Kahneman, The Woodrow Wilson School of Public and International Affairs, Princeton University
"Experimental economics comes of age with this volume. At last the dust begins to clear, and it becomes possible to confront theory with coherent and reliable laboratory data."--Ken Binmore, University College of London

Thursday, September 15, 2016

Sally Satel, on how she was lucky twice, and others shouldn't have to be

Sally Satel, the tireless fighter to make kidney transplants more accessible, writes in two recent articles about her good luck in receiving organs from friends, and about how providing greater incentives to donors might work...

This one is in Slate:

A College Tuition Payment for Your Spare Kidney? 
A new bill proposes an alternative way to compensate people for their organ donation. We should try it.
(The URL is as informative as the headline: http://www.slate.com/articles/health_and_science/medical_examiner/2016/09/the_current_kidney_donation_system_is_failing_us.html )

And this one is in Statnews:
 Vouchers and incentives can increase kidney donations and save lives

Wednesday, September 14, 2016

Quién obtiene qué y por qué. Who gets what and why, in Spanish

Who gets what and why is coming out in Spanish (in October). The publisher is Antoni Bosch, the economist.



Quién obtiene qué y por qué

LA NUEVA ECONOMÍA DEL DISEÑO DE MERCADOS

Alvin E. Roth
2016 (octubre)



Surrogacy repugnance and judicial approval: a strange case from Wisconsin

A surrogacy contract often requires a judge's approval for the birth certificate, and such a case went radically bad in Wisconsin where paid surrogacy is legal, but nevertheless regarded as repugnant in some quarters:
These Two Dads Almost Lost Their Son In A Bizarre Surrogacy Case
Jay Timmons and Rick Olson thought they’d have no legal trouble using a surrogate to birth their son. Then a rogue judge in Wisconsin pulled them into an 11-month legal battle.

"Jay Timmons and Rick Olson, a married gay couple from Virginia, didn’t think they’d have any trouble becoming the legal parents of the baby boy who their surrogate, a Wisconsin woman, delivered for them last year.
They had gotten the frozen embryo that became their son as a gift from straight friends whose in vitro fertilization created more embryos than they could use. They had chosen a Wisconsin surrogate specifically because the state’s Supreme Court had upheld surrogacy, and other same-sex couples had had smooth sailing there. And by just about any measure, the two intended fathers were prime parent material: They both had good jobs, they had been together for 25 years, and they were already raising two daughters from previous surrogacies.
But their careful plans went awry the month before their son, Jacob, was born, when their effort to be named his legal parents landed before a conservative judge who saw surrogacy as a form of human trafficking. Over the next 11 months, the couple’s bizarre legal battle cost more than $400,000 and kept them in constant terror of losing their son.
...
"But the Wisconsin case is likely unprecedented, legal experts say, in that the surrogate, her husband, and the intended parents were all happy with their arrangement. Only the judge was not.
...
"Dane County Circuit Court Judge Jim Troupis, appointed by Gov. Scott Walker last year, opened his March opinion with the statement, “Human trafficking comes in many forms.” And although he went on to describe the two dads as a “spectacular set of parents’’ who would raise the child “in a nurturing environment with unmatched financial resources,’’ he made it clear that he was bothered by the fact that the couple had paid a woman to carry a baby who was not related to them.
“The fundamental fact remains that another couple has provided the child as a gift to the petitioners, and the child has no genetic relationship to the petitioners,’’ Troupis wrote. “In order to bring the child into world, the petitioners have paid a significant amount of money. Without those payments there would be no child.’’
...
"There is no federal law on the subject, and state laws vary enormously. California, for example, where Timmons and Olson hired the surrogates who delivered their two daughters, is the center of the nation’s surrogacy industry, thanks to a friendly state law.
But most states don’t have any surrogacy laws on the books. Some simply refuse to enforce surrogacy contracts. Others, including Virginia, don’t allow surrogacy unless at least one of the intended parents has a genetic connection to the baby. New York and Washington allow only unpaid, or “altruistic” surrogacy, and Michigan has criminal penalties for all types.
...
"Despite the legal limbo, because of the rise of in vitro fertilization — now responsible for nearly 2% of US births — and the legalization of same-sex marriage, demand is also rising for surrogates. And, partly to avoid legal snags, these women are generally “gestational surrogates,” meaning that they carry embryos that are not genetically related to them. According to the CDC, there were 3,432 gestational surrogates in 2013, up from 727 in 1999.
...
"Although the case was in Dane County, the liberal stronghold that contains Madison, Judge Troupis appointed as the child’s legal guardian Mark Knutson, a lawyer 70 miles away whose radio broadcast, The Word on The Law, aims to reconcile God’s word with the law. Knutson, in turn, brought in another lawyer from his firm, Erik Krueger, who had worked with Liberty Counsel, a group that defends public officials like Kim Davis, the Kentucky county clerk who refused to issue marriage licenses to same-sex couples.
...
"In November, Knutson filed a 45-page report to Judge Troupis, calling for more court oversight of surrogacy cases and arguing that rubber-stamping a gestational surrogacy contract made by two men with no genetic connection to the child would open the way to a dangerous expansion of the concept of parenthood.
Such surrogacy contracts, his report said, broker pregnancy, commodify children, and meet the needs of wealthy intended parents at the expense of the children involved.
...
"In his March decision, Judge Troupis seemed to rely on many of Knutson’s arguments. He terminated the surrogate’s maternal rights and gave the Virginia men only temporary custody, technically leaving Jacob an orphan.
...
"The Troupis decision left Timmons and Olson at a crossroads: They could continue to appeal in Wisconsin, or take a different route, pursuing an adoption in their home state of Virginia. While they weighed these options from their home in Virginia — while caring for Jacob and their young daughters — they had a lucky break: Judge Troupis resigned May 2, to try, unsuccessfully, for a seat on the Wisconsin Supreme Court.
Timmons and Olson had already moved to reopen and reconsider Judge Troupis’s ruling, but with the judge’s resignation, their case was transferred to yet another judge, Peter Anderson, who overturned Judge Troupis’s “faulty’’ opinion, which he criticized for using language that was “unduly harsh and kind of weird.’’
********

HT: Kim Krawiec

Tuesday, September 13, 2016

Ransom as a (not so) repugnant transaction

The United States is revising some policies regarding dealing with Americans held hostage, e.g. in the middle east.  The NY Times has the story:
In a Shift, U.S. Includes Families in Hostage Rescue Efforts
By ADAM GOLDMANSEPT. 11, 2016

It includes the following observation:
"And while the administration has continued its policy of not paying ransoms, it has now pledged not to criminally charge families if they decide to pay one."

Monday, September 12, 2016

A chat about the design of ad auctions with Gabriel Weintraub

Gabriel Weintraub has just moved to Stanford from Columbia. Here's a recent interview with him about bidding for online advertisements.
A Chat With AppNexus Chief Economist Gabriel Weintraub

"RTBlog: What is market design?

Weintraub: It’s an area of economics that uses tools from game theory, econometrics, and micro-economic theory to understand how marketplaces work. It looks at what the dynamics are, and advertising auction logic that affects incentives to achieve certain objectives. It looks at how to set up rules to make the auction more efficient.

If your goal is increasing a seller’s revenue, that’s a goal market design can address. Another goal is efficiency and making markets safe. And you want to monetize the inventory, and outcomes that are fair for both buyers and sellers. Market design is having a significant impact on how digital marketplaces are being run."

Repugnant language: some reflections on profanity

The Canadian magazine Maclean's has a very polite (but nontheless interesting) essay on profanity
Are we wearing out obscenities?
"Profanity sinks deep emotional roots in our brains. When words develop duelling meanings, the bad stuff almost always wins out.
...
"In short, if English should lose its surprisingly small profane vocabulary set through overusage, we would be forced to invent new obscenities. That would be no easy task, given the polished perfection of what biology, time and chance has already bequeathed us."

Sunday, September 11, 2016

Has the internet "wrecked" college admissions?

That's what the headline writers at the Washington Monthly think:
How the Internet Wrecked College Admissions: Colleges are drowning in online applications, which is bad news for both schools and students.  by Anne Kim

Here are the opening paragraphs:
"Over the last decade, the internet has made it much easier for students to apply to college, especially thanks to services like the “Common App.” For the nearly 700 schools now part of the Common Application—the nation’s leading standardized online college application portal—students can browse by name, state, or region, by the type of institution (public or private), and by whether it’s co-ed or single-sex. Clicking on a college takes students to a brief profile of the school and then an invitation: “Ready to apply?”

And now that students can apply to more colleges with the click of a few buttons, they are doing exactly that. In 2013, according to the National Association of College Admissions Counselors (NACAC), 32 percent of college freshmen applied to seven or more colleges—up 10 percentage points from 2008. Almost all of this growth has been online. In the 2015–16 admissions cycle, over 920,000 students used the Common App, more than double the number in 2008–09."

Saturday, September 10, 2016

Friday, September 9, 2016

Knuth award to Noam Nisan

Mazel tov to Noam Nisan!

Hebrew University's Nisan Cited for Fundamental and Lasting Contributions to Theoretical Computer Science

New York, September 8, 2016 —The 2016 Donald E. Knuth Prize will be awarded to Noam Nisan of the Hebrew University of Jerusalem for fundamental and lasting contributions to theoretical computer science in areas including communication complexity, pseudorandom number generators, interactive proofs, and algorithmic game theory. The Knuth Prize is jointly bestowed by the ACM Special Interest Group on Algorithms and Computation Theory (SIGACT) and the IEEE Computer Society Technical Committee on the Mathematical Foundations of Computing (TCMF). It will be presented at the 57th Annual Symposium on Foundations of Computer Science (FOCS 2016) in New Brunswick, NJ, October 9–11.
Nisan’s work has had a fundamental impact on complexity theory, which examines which problems could conceivably be solved by a computer under limits on its resources, whether it is on its computation time, space used, amount of randomness or parallelism. One of the major ways in which computer scientists have explored the complexity limits is through the use of randomized algorithms. Nisan has made major contributions exploring the power of randomness in computations. His work designing pseudorandom number generators has offered many insights on whether, and in what settings, the use of randomization in efficient algorithms can be reduced.
Nisan has been a major player in Algorithmic Game Theory, and, through his 1999 paper with Amir Ronen, has laid the foundation of Algorithmic Mechanism Design. A mechanism is an algorithm or protocol that is explicitly designed so that rational participants, motivated purely by their self-interest, will achieve the designer's goals. This is of paramount importance in the age of the Internet, with many applications from auctions to network routing protocols. Nisan has designed some of the most effective mechanisms by providing the right incentives to the players. He has also shown that in a variety of environments there is a tradeoff between economic efficiency and algorithmic efficiency. Nisan is a co-editor of Algorithmic Game Theory, a fundamental text in the field.
He is also a leading authority in communication complexity, an area of computer science research that examines the amount of information that needs to be transferred between parties for computational problems. With Eyal Kushilevitz, Nisan co-authoredCommunication Complexity, an authoritative text in the field.
Nisan is professor of computer science and engineering at the Hebrew University of Jerusalem. He is also a graduate of Hebrew University, and earned his Ph.D. from the University of California, Berkeley. He received the 2012 Gödel Prize (with Elias Koutsoupias, Christos Papadimitriou, Amir Ronen, Tim Roughgarden and Éva Tardos), the 1990 ACM Doctoral Dissertation Award for his dissertation, “Using Hard Problems to Create Pseudorandom Generators,” and the 2004 Michael Bruno Memorial Award.
The Donald E. Knuth Prize is named in honor of Donald Knuth of Stanford University who has been called the “father of the analysis of algorithms.”

Airbnb consider market design changes to reduce discrimination

The NY Times has the story:
Airbnb Adopts Rules in Effort to Fight Discrimination by Its Hosts

"Airbnb, based in San Francisco, said that it would institute a new nondiscrimination policy that goes beyond what is outlined in several anti-discrimination laws and that it would ask all users to agree to a “community commitment” starting on Nov. 1. The commitment asks people to work with others who use the service, “regardless of race, religion, national origin, disability, sex, gender identity, sexual orientation or age.”

In addition, the company plans to experiment with reducing the prominence of user photos, which have helped signal race and gender. Airbnb said it would also accelerate the use of instant bookings, which lets renters book places immediately without host approval."
**********

There is a strong market design subtext to this story: Peter Coles, Airbnb's (new) chief economist, used to work at Harvard Business School, where some of his former colleagues conducted an experiment that helped focus on the possible discrimination problem.
Here's the current version of that paper:

Racial Discrimination in the Sharing Economy:Evidence from a Field Experiment
 Benjamin Edelman, Michael Luca, and Dan Svirsky
 September 4, 2016

 Abstract
Online marketplaces increasingly choose to reduce the anonymity of buyers and sellers in order to facilitate trust. We demonstrate that this common market design choice results in an important unintended consequence: racial discrimination. In a field experiment on Airbnb, we find that requests from guests with distinctively African-American names are roughly 16% less likely to be accepted than identical guests with distinctively White names. The difference persists whether the host is African-American or White, male or female. The difference also persists whether the host shares the property with the guest or not, and whether the property is cheap or expensive. We validate our findings through observational data on hosts’ recent experiences with African-American guests, finding host behavior consistent with some, though not all, hosts discriminating. Finally, we find that discrimination is costly for hosts who indulge in it: hosts who reject  guests are able to find a replacement guest only 35% of the time. On the whole, our analysis suggests a need for caution: while information can facilitate transactions, it also facilitates discrimination.

Thursday, September 8, 2016

The NBER market design lectures from the 2016 Summer Institute (Videos)

This summer the "methods lectures" at the NBER summer institute were on market design. Videos of the five lectures (each about 45 minutes long) are here.

Summer Institute 2016 Methods Lectures

July 26, 2015
Lecturers: Al Roth, Parag Pathak, Atila Abdulkadiroglu, Nikhil Agarwal, Itai Ashlagi

Reading List


Al Roth
Game Theory and Market Design

Al Roth: Game Theory and Market Design
You can download this video from here



Parag Pathak
Design of Matching Markets

NBER Summer Pathak Presentation 8.4.16 Sequence.03
You can download this video from here



Atila Abdulkadiroglu
Research Design meets Market Design

NBER Summer Atila Abdul 8.29.16 Sequence.02
You can download this video from here



Nikhil Agarwal
Revealed Preference Analysis in Matching Markets

NBER SUMMER Agarwal Presentation 9.2.16 Sequence.01
You can download this video from here



Itai Ashlagi
Matching Dynamics and Computation

NBER SUMMER ASHLAGI 9.1.16 Sequence.01
You can download this video from here 


And you can see a short introductory video in which I am interviewed about market design here (and for the time being on the NBER home page, http://nber.org/). 

Wednesday, September 7, 2016

The California Growers Association, and Proposition 64 (to legalize recreational use of marijuana)

Humboldt County is a great place to see tall trees, which is a relaxing way to spend some time.


But there are other things growing high up California's north coast, and the California Growers Association is divided over whether any further changes in marijuana licensing laws would be a good thing or not. The Humboldt Independent has the story:
Growers Association Still Divided Over Proposition 64, by Keith Easthouse

"With three months to go before voters decide the matter, the California Growers Associations remains divided over the statewide legalization initiative known as the Adult Use of Marijuana Act.

“Thirty-one percent say yes, 31 percent say no and 38 percent are undecided,” Hezekiah Allen, CGA’s executive director, said last week in reference to the group’s latest online survey of its membership.
...
"While CGA is a statewide organization, the bulk of its roughly 700 members — who include cultivators, manufacturers and retailers — come from three regions: The North Coast, with 161 members; the Sierra Foothills, with 145 members; and the Bay Area, with 145 members.

“Our membership [includes] the smaller, independently owned, value-added operations. We want a marketplace for those types of businesses,” Allen explained in an interview earlier this year.

The fact that there are provisions in Prop. 64 that are seen as overly friendly to big business interests and not friendly enough to small farmers lies at the heart of the doubts some members have about the measure."
***********

See my earlier post

The California marijuana market: the hippies now have to compete with the agribusinesses

Monday, September 5, 2016

Budapest in three photos

The parliament building, the Holocaust memorial by the river, and a shop with excellent, diverse flavors of ice cream...




MIÉRT GYERE EL? von Neumann lecture in Budapest on Who Gets What and Why, Sept 6

MIÉRT GYERE EL?
"We cordially invite you to the 2016 John von Neumann Award Ceremony and the public lecture held by the awardee on the 6th September. The title of the lecture will be "Who Gets What and Why: The New Economics of Matchmaking and Market Design”. 2012 Nobel laureate Professor Roth is going to talk about the matching markets hidden around us, from kindergarten choice through kidney transplantations to college football, and about how to make them work.

The lecture is organized by Rajk László College for Advanced Studies with the contribution of Institute of Economics of the Hungarian Academy of Sciences (KTI). The lecture will be held in English."
**********

Here's a news story announcing the event
Alvin E. Roth kapja az idei Neumann János-díjat
Google translate: Alvin E. Roth will receive this year's John Von Neumann Prize

The students at Rajk László College, who choose the recipient of this annual award, have done a good job in the past: https://en.wikipedia.org/wiki/John_von_Neumann_Award

Sunday, September 4, 2016

School choice discussion in Indianapolis

The Indy Star has the story:
Will Indy adopt central enrollment system for schools?

"A group is developing a one-stop enrollment system for Indianapolis schools but will the city’s largest education provider take part?

Indianapolis Public Schools leaders are weighing whether to join Enroll Indy, a nonprofit with plans to launch a unified enrollment process for IPS schools and charter schools within the district’s boundaries by next year.

The goal: Help parents find a school for their children in a city with growing options that feature charter schools, innovation network schools, magnet programs and more.

So far, IPS hasn’t made any commitments, though moving toward such a system is among the district’s priorities, IPS Superintendent Lewis Ferebee said.

“Whether Enroll Indy is the best fit for IPS to go down that path is to be determined,” Ferebee told IndyStar. “The concept itself could definitely benefit our families.”

Advocates for a central enrollment system say the way parents now shop for schools is disorganized. To find the best fit, parents must juggle different application deadlines and know what programs are out there, a daunting task with the city now playing host to more than 40 charter schools.

Wealthier families can find the process easier to navigate, placing lower-income families at a disadvantage, organizers say.

“If we’re going to say we have choice,” said Caitlin Hannon, Enroll Indy’s founder, “everybody should have equitable access to that choice.”

Hannon, a former IPS School Board member, said the group is hoping to launch its first application process next fall for the 2018-19 school year. But first it needs buy-in from the city’s schools, and Hannon started making her pitch to IPS this month.

A 2015 report by the Institute for Innovation in Public School Choice found that the city’s schools are in “intense competition to enroll students.”

“There is no incentive for IPS, for example, to tell parents about charter schools. Or for Ball State University to ensure families understand the IPS magnet school application,” according to the report. “In both cases, doing so would not be in their best self-interest. For families, though the distinction between authorizers is less important. Parents are looking for the best school for their child, regardless of who runs it. For them, not having the information in one easy-to-access place doesn’t make sense.”

Families would apply through Enroll Indy to any participating school, where they’d rank their school preferences and be matched with a program.

Hannon said families would be asked their priorities, such as location and where siblings attend. Students are then matched to the school “they want the most that they can get into, based on those priorities,” Hannon said.

“I like to explain it as all schools lotteries happening at the same moment…,” she said.

An analysis of a similar system run in Denver Public Schools found not enough seats existed in high-performing schools to serve demand. That meant students often were assigned to lower-performing schools than initially requested.

But the system would come with perks, Hannon said. Parents would no longer have to hold spots for their children at multiple schools, making it easier for administrators to plan staffing needs...."