Thursday, October 16, 2014

I'll speak today at San Jose State U. on "The Economist as Engineer"

If you're in the neighborhood, come on by...


Silicon Valley Leaders Symposium - Alvin E. Roth



Alvin Roth
Since Fall 2002, the Charles W. Davidson College of Engineering has hosted the Silicon Valley Leaders Symposium (SVLS). The Symposium hosts industry and technology leaders to talk about business and technology trends. It also features prominent leaders who discuss broader societal and political issues that shape our life and society.
Speaker: Alvin E. Roth, Nobel Memorial Prize in Economic Sciences 2012, Professor, Harvard University and Stanford University

Thursday, 10/16/14


Contact:

Website: Click to Visit

Cost:

Free

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Silicon Valley Leaders Symposium

San Jose State University
Engineering Building Room 189
San JoseCA 95192

Email: ahmed.hambaba@sjsu.edu
Website: Click to Visit

Here is the full Fall schedule of speakers. The symposia take place every Thursday from 12:00 pm to 1:00 pm in the Engineering building auditorium, ENG 189.

Wednesday, October 15, 2014

Congratulations to Jean Tirole

Hearty congratulations to Jean Tirole, who won the 2014 Nobel Prize in Economics.

Or did he win The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, or perhaps the Nobel Memorial Prize in Economics?


Here are some data, from Google Ngrams...



And here's Shakespeare on the subject:
"What’s in a name? that which we call a rose
By any other name would smell as sweet"

Congratulations again, Jean, on a well deserved award, whatever it's called.

*************
update:


Tuesday, October 14, 2014

Helping low income students with college applications


David Leonhardt in the NY Times recently wrote about ‘A National Admissions Office’ for Low-Income Strivers, about a nonprofit company called Questbridge.

He writes that it "has quietly become one of the biggest players in elite-college admissions. Almost 300 undergraduates at Stanford this year, or 4 percent of the student body, came through QuestBridge. The share at Amherst is 11 percent, and it’s 9 percent at Pomona. At Yale, the admissions office has changed its application to make it more like QuestBridge’s."
...
"QuestBridge has figured out how to convince thousands of high-achieving, low-income students that they really can attend a top college. “It’s like a national admissions office,” said Catharine Bond Hill, the president of Vassar.
...
"College admissions officers attribute the organization’s success to the simplicity of its approach to students. It avoids mind-numbingly complex talk of financial-aid forms and formulas that scare away so many low-income families (and frustrate so many middle-income families, like my own when I was applying to college). QuestBridge instead gives students a simple message: If you get in, you can go.
...
The group’s founders, Michael and Ana Rowena McCullough, are now turning their attention to the estimated $3 billion in outside scholarships, from local Rotary Clubs, corporations and other groups, that are awarded every year to high school seniors. The McCulloughs see this money as a wasted opportunity, saying it comes too late to affect whether and where students go to college. It doesn’t help the many high-achieving, low-income strivers who don’t apply to top colleges — and often don’t graduate from any college.

“Any private scholarship given at the end of senior year is intrinsically disconnected from the college application process,” Dr. McCullough said, “and it doesn’t have to be.”

They plan to offer prizes in some cases to high school juniors, like a summer program or a free laptop, to persuade them to apply. To win the prize, the junior would need to fill out a detailed application, which could become the basis for his or her college application. The idea draws on social science research, which has shown that people often respond better to tangible, short-term incentives (a free laptop) than to complicated, longer-term ones (a college degree, which will improve your life and which you can afford). Two pilot programs started with donors — one focused on New Yorkers, one on low-income Jewish students — have had encouraging results, the McCulloughs say.
...
"It has an early application deadline, in late September, and a long application form, designed to get students to tell the story of their lives.

"Crucially, the program promises a scholarship not just for one year but for four. As Mrs. McCullough, the organization’s chief executive, said, “Unless you make that kind of promise to the students and their parents, they’re going to worry, ‘Will the schools really pay for all four years?’ ”
...
"The winners of the scholarships — which colleges pay for, as they do for much of QuestBridge’s budget — go through a matching process. They attend their first choice among any of the 35 participating colleges that admit them. Hundreds of scholarship finalists who don’t win are admitted separately to the colleges, through a more typical admissions process, often with nearly full scholarships. The students form a support network for one another, they say."
...
"As much as QuestBridge has grown, it of course remains tiny relative to the population of college-ready, low-income teenagers. Only a small slice of them will attend colleges with the resources to offer full scholarships. That’s why the larger lessons of QuestBridge are so important.

"What are they? One, the complexity of the financial-aid process is scaring students away from college. “You don’t even know what it’s talking about half the time,” Mr. Parker said of the federal form. The Obama administration has taken steps to simplify it, but a full revamping would require help from Congress.

"Two, large amounts of well-meaning scholarship money — from private sources as well as from Washington and state governments — is fairly ineffectual. It helps many students who would graduate from college regardless, rather than those with the skills to graduate who are at risk of not doing so.

"Three, not every problem created by inequality is fiendishly difficult to solve.

"Yes, many of them are, from growing gaps in health and family structure to struggling public K-12 schools. Yet some gritty teenagers, like Ms. Trickey and Mr. Slate, still figure out a way to emerge from high school with stunning résumés. They’re on track to become quintessentially American success stories — and far too many of them still end up falling short."

Monday, October 13, 2014

Market design at Stanford, Fall 2014 (current course materials)

The URL of the Stanford course on market design that I'm teaching with Muriel Niederle this quarter is too long to fit into the heading of this blog, but here it is if you'd like to see our class materials, which are the slides presented so far:
https://coursework.stanford.edu/portal/site/F14-ECON-285-01 


F14-ECON-285-01 - Matching and Market Design

Course Information
Term:FALL 2014
Instructor(s):Muriel Niederle, Alvin Roth
Long Description

F14-ECON-285-01 This is an introduction to market design, intended mainly for second year PhD students in economics (but also open to other graduates students from around the university and to undergrads who have taken undergrad market design). It will emphasize the combined use of economic theory, experiments and empirical analysis to analyze and engineer market rules and institutions. In this first quarter we will pay particular attention to matching markets, which are those in which price doesn't do all of the work, and which include some kind of application or selection process. In recent years market designers have participated in the design and implementation of a number of marketplaces, and the course will emphasize the relation between theory and practice, for example in the design of labor market clearinghouses for American doctors, and school choice programs in a growing number of American cities (including New York and Boston), and the allocation of organs for transplantation. Various forms of market failure will also be discussed. Assignment: One final paper. The objective of the final paper is to study an existing market or an environment with a potential role for a market, describe the relevant market design questions, and evaluate how the current market design works and/or propose improvements on the current design.


Update: I hadn't realized that you need a Stanford login to get to the course page, and I haven't figured out a way around that...:(

Sunday, October 12, 2014

The brains of psychopaths (serial killers) and extraordinary altruists (nondirected kidney donors)

First, the altruists, in PNAS:
Neural and cognitive characteristics of extraordinary altruists
Abigail A. Marsha,1, Sarah A. Stoycosa, Kristin M. Brethel-Haurwitza, Paul Robinsonb, John W. VanMeterc, and Elise M. Cardinalea

Abstract: "Altruistic behavior improves the welfare of another individual while reducing the altruist’s welfare. Humans’ tendency to engage in altruistic behaviors is unevenly distributed across the population, and individual variation in altruistic tendencies may be genetically mediated. Although neural endophenotypes of heightened or extreme antisocial behavior tendencies have been identified in, for example, studies of psychopaths, little is known about the neural mechanisms that support heightened or extreme prosocial or altruistic tendencies. In this study, we used structural and functional magnetic resonance imaging to assess a population of extraordinary altruists: altruistic kidney donors who volunteered to donate a kidney to a stranger. Such donations meet the most stringent definitions of altruism in that they represent an intentional behavior that incurs significant costs to the donor to benefit an anonymous, nonkin other. Functional imaging and behavioral tasks included face-emotion processing paradigms that reliably distinguish psychopathic individuals from controls. Here we show that extraordinary altruists can be distinguished from controls by their enhanced volume in right amygdala and enhanced responsiveness of this structure to fearful facial expressions, an effect that predicts superior perceptual sensitivity to these expressions. These results mirror the reduced amygdala volume and reduced responsiveness to fearful facial expressions observed in psychopathic individuals. Our results support the possibility of a neural basis for extraordinary altruism. We anticipate that these findings will expand the scope of research on biological mechanisms that promote altruistic behaviors to include neural mechanisms that support affective and social responsiveness."


Here's a news story on the article: Who Would Donate a Kidney to a Stranger? An ‘Anti-Psychopath’
"In recent decades, psychopathy is something that’s captured the attention of both academics and the mainstream. Psychopaths play big roles in movies and even occasionally on public radio, and there’s evidence that a few of them may be in your company’s boardroom right this minute. 
But emerging research is changing how experts understand the condition. “There was a time when people thought of psychopaths as this sort of unique group of individuals — as in, there were normal people, and there were psychopaths,” said Georgetown University psychologist Abigail Marsh. “But now we’re finding that psychopathic traits work the same as other mental-illness symptoms. So with psychopathy, like almost anything else, people will have more or fewer of those traits, and so you have people at one end and most people in the middle.” Marsh calls this the “caring continuum,” and its existence, she said, “begs the question: What’s at the other end of the curve?”
New research she just published in Proceedings of the National Academy of Sciences suggests an answer: If the dark, scary end of the caring continuum is inhabited by psychopaths, way down at the other end is a group of what she calls “anti-psychopaths” — ultra-do-gooders who are extraordinarily compassionate, prosocial, and empathetic.
Marsh wanted to study the characteristics of these sorts of people, so she sought so-called “altruistic kidney donors” who offer up a kidney to anyone who needs it (as opposed to those who donate a kidney to a friend or loved one), figuring they would fit the bill."
**************

As it happens, at the recent Google Zeitgeist conference I  heard James Fallon speak about psychopathology (and his own brush with it...). Here's the video of his 30 minute talk/




You can find videos of the other talks given at Google Zeitgeist 2014 here.

Saturday, October 11, 2014

Australian discussion of market design

For some reason, the public discussion of market design in business and government in Australia seems to hit a lot of the right notes, at least as superficially reported in the press. I don't always have the context to know what they are talking about, and whether I agree or disagree, but I like discussions that operate on the level of market design.

 For example, here's a story on the market for something they call vocational and educational training:
VET market ‘doesn’t work for everybody’: BCA’s Jennifer Westacott

"FAD-DRIVEN market reforms have left vocational education and training more disjointed than ever, according to two of the country’s biggest employer groups.

"Business Council of Australia chief executive Jennifer Westacottsaid that governments were pursuing contestable funding as “a policy vision in and of itself”, with no clear idea of why they were doing so.

We can’t just say let the market work, because it doesn’t always work for everybody — and I say that as the queen of capitalism,” Ms Westacott told the TAFE Directors Australia conference.

“It doesn’t often work for disadvantaged people, it doesn’t work in certain locations (and) it doesn’t work for emerging skills. Whenever you hear people say, ‘Let the market just run,’ you say: to what end and what purpose?

“Market reform has to be about outcomes, not fads.”

"Ms Westacott said she did not think it would ever be possible to establish a “completely free” market in VET. She said locational issues, low demand for some qualifications and special needs of some student groups would force governments to assert a degree of control.
...
"Ms Westacott acknowledged that market design was no simple task. “If this were easy, they’d do it,” she said."

Friday, October 10, 2014

Who prefers centralized to decentralized matching?

Here's a paper that looks at the question of centralized versus decentralized matching from an interesting angle:

 College Admissions with Entrance Exams: Centralized versus Decentralized
Isa E. Hafalir, Rustamdjan Hakimov, Dorothea Kübler, Morimitsu Kurino
September 2, 2014

Abstract: " We theoretically and experimentally study a college admissions problem in which colleges accept students by ranking students’ efforts in entrance exams. Students’ ability levels affect the cost of their efforts. We solve and compare equilibria of “centralized college admissions” (CCA) where students apply to all colleges, and “decentralized college admissions” (DCA)
where students only apply to one college. We show that lower ability students prefer DCA whereas higher ability students prefer CCA. The main predictions of the theory are supported by experiments, yet we find a number of differences that render DCA less attractive than CCA compared to equilibrium benchmark."

The paper begins with a description of some of the variety in college admissions around the world, before concentrating on the two extreme cases:

"In some countries, the application and admission process is centralized. For instance, in Turkey university assignment is solely determined by a national examination called YGS/LYS. After learning their scores, students can apply to a number of colleges. Applications are almost costless as all students need only to submit their rank-order of colleges to the central authority.1 On the other hand, Japan has a centralized “National Center test,” too, but all public universities including most prestigious universities require the candidate to take another, institution-specific secondary exam which takes place on the same day. This effectively prevents the students from applying to more than one public university.2 The admissions mechanism in Japan is decentralized, in the sense that colleges decide on their admissions independent of each other. In the United States, students take both centralized exams like the Scholastic Aptitude Test (SAT), and also complete college-specific requirements such as college admission essays. Students can apply to more than one college, but since the application process is costly, students typically send only a few applications (the majority being between two to six applications, see Chade, Lewis, and Smith, 2014). Hence, the United States college admissions mechanism falls in between the two extreme cases.

1. Greece, China, South Korea, and Taiwan have similar national exams that are the main criterion for the centralized mechanism of college admissions. In Hungary, the centralized admission mechanism is based on a score that combines grades from school with an entrance exam (Biro, 2012).
2. There are actually two stages where the structure of each stage is as explained in Section 4. The difference between the stages is that the capacities in the first stage are much greater than those in the second stage. Those who do not get admission to any college spend one year preparing for the next year’s exam. Moreover, the Japanese high school admissions authorities have adopted similar mechanisms in local districts. Although the mechanism adopted varies across prefectures and is changing year by year, its basic structure is that each student chooses one among a specified set of public schools and then takes an entrance exam at his or her chosen school. The exams are held on the same day. Finally, institution-specific exams that prevent students from applying to all colleges have also been used and debated in the United Kingdom, notably between the University of Cambridge and the University of Oxford. We thank Ken Binmore for pointing this out."

Thursday, October 9, 2014

Medically assisted dying: debated in the NY Times

Here's the debate on medically assisted dying  in Tuesdays NY Times:

UPDATED OCTOBER 7, 2014 12:53 PM

Expanding the Right to Die

INTRODUCTION

André da Loba
Some readers who commented on a Room for Debate forum about the dismal state of elder care said they wanted to be able to end their lives on their own terms to avoid a drawn-out, onerous death. A 29-year-old woman with terminal brain cancer has announced a campaign to support physician-assisted suicide leading up to her own death next month. Since Oregon became the first state to legalize physician-assisted suicide for terminally ill patients, Montana, New Mexico, Vermont and Washington have permitted it.
Should the right to die be expanded further, and if so, what should the standards be?
READ THE DISCUSSION »
DEBATERS


Wednesday, October 8, 2014

Incentives in multi-hospital kidney exchange

Itai Ashlagi and I have a paper in the latest issue of Theoretical Economics:
Free riding and participation in large scale, multi-hospital kidney exchange
Volume 9Issue 3pages 817–863September 2014
Abstract: "As multi-hospital kidney exchange has grown, the set of players has grown from patients and surgeons to include hospitals. Hospitals can choose to enroll only their hard-to-match patient–donor pairs, while conducting easily arranged exchanges internally. This behavior has already been observed.

We show that as the population of hospitals and patients grows, the cost of making it individually rational for hospitals to participate fully becomes low in almost every large exchange pool (although the worst-case cost is very high), while the cost of failing to guarantee individual rationality is high—in lost transplants. We identify a mechanism that gives hospitals incentives to reveal all patient–donor pairs. We observe that if such a mechanism were to be implemented and hospitals enrolled all their pairs, the resulting patient pools would allow efficient matchings that could be implemented with two- and three-way exchanges."

The paper was actually written some time ago, and took a long time to publish partly because the phenomenon it identifies, the withholding of easy to match pairs by big transplant centers, was controversial among referees. It isn't controversial anymore: it's one of the clearest features of contemporary kidney exchange that the flow of incoming patients to multi-hospital kidney exchange is skewed towards the hardest to match patients. Hence the success of  potentially long, non-simultaneous extended altruistic donor chains (NEAD chains), which we've explored in other papers.

Tuesday, October 7, 2014

More transplant troubles in Germany

Rosemarie Nagel points me to this article, in German: Transplantationen: Prüfer decken Manipulationen am Berliner Herzzentrum auf

Google Translate gives this for the summary:
"The German Heart Institute Berlin has manipulated according to a report in 14 cases in transplantation. Syndromes were described incorrectly and the dose of medication was overstated in order to get donor organs faster."

Some earlier posts are here:
Deceased donor waiting lists in Germany: scandal and aftermath

Incentives and organ donation in Germany

Monday, October 6, 2014

Cooperating with the future, and renewable resources

Here's a paper that I missed when it came out:





Cooperating with the future

Nature   25 June 2014

Sunday, October 5, 2014

More on eating horse meat (and saving horses)

Eat ponies to save them - says charity

"It maybe be controversial but an animal group is the latest to endorse the Princess Royal's suggestion of eating ponies in a bid to save their species..
The Dartmoor Hill Pony Association (DHPA) says the best way to save herds on the ancient moorland is by creating a "market" for them by eating them.
It follows comments by Princess Anne endorsing eating horses to improve their welfare.
...
"Founder of the DHPA, Charlotte Faulkner believes herders will only continue to keep the animals if there is a "sustainable market" for them.
In a letter proposing the idea sent to South West Equine Protection (SWEP), she said: "I am writing to ask whether SWEP would consider giving measured support to this understandably upsetting subject, which as pony lovers we find so hard to accept."

HT: Shengwu Li

Saturday, October 4, 2014

The wholesale used car market

My colleague Brad Larsen has an NBER paper that looks at the post-auction bargaining for used cars that didn't reach their reserve price in the market to dealers.

The Efficiency of Real-World Bargaining: Evidence from Wholesale Used-Auto Auctions

Bradley Larsen

NBER Working Paper No. 20431
Issued in August 2014
NBER Program(s):   IO 
This study quantifies the efficiency of a real-world bargaining game with two-sided incomplete information. Myerson and Satterthwaite (1983) and Williams (1987) derived the theoretical efficient frontier for bilateral trade under two-sided uncertainty, but little is known about how well real-world bargaining performs relative to the frontier. The setting is wholesale used-auto auctions, an $80 billion industry where buyers and sellers participate in alternating-offer bargaining when the auction price fails to reach a secret reserve price. Using 270,000 auction/bargaining sequences, this study nonparametrically estimates bounds on the distributions of buyer and seller valuations and then estimates where bargaining outcomes lie relative to the efficient frontier. Findings indicate that the dynamic mechanism attains 80-91% of the surplus which can be achieved on the efficient frontier.


Friday, October 3, 2014

Combinatorial clock auctions

My colleagues Jon Levin and Andy Skrzypacz have an NBER paper on combinatorial clock auctions of the kind proposed by Ausubel, Cramton and Milgrom (2006), which are becoming widely used outside of the U.S. to auction spectrum. They point to it's multiplicity of equilibria, in some of which bidders can act to raise their competitors' payments without changing their own, as a source of potential problems, some of which may have been observed in practice,

Are Dynamic Vickrey Auctions Practical?: Properties of the Combinatorial Clock Auction

Jonathan LevinAndrzej Skrzypacz

NBER Working Paper No. 20487
Issued in September 2014
NBER Program(s):   IO 
The combinatorial clock auction is becoming increasingly popular for large-scale spectrum awards and other uses, replacing more traditional ascending or clock auctions. We describe some surprising properties of the auction, including a wide range of ex post equilibria with demand expansion, demand reduction and predation. These outcomes arise because of the way the auction separates allocation and pricing, so that bidders are asked to make decisions that cannot possibly affect their own auction outcome. Our results obtain in a standard homogenous good setting where bidders have well-behaved linear demand curves, and suggest some practical difficulties with dynamic implementations of the Vickrey auction.

Thursday, October 2, 2014

Organ and blood donation from gay men

Several repugnancies coincide in this sad story that actually involves a suicide apparently resulting from bullying. So, read the whole story, but I'll just highlight here the parts about organ donation: Gay teen’s organ donation rejected

"Before he died, Betts had a request: Donate my organs. A 14-year-old boy received Betts’s heart, according to a letter Moore received, but she said his eyes were rejected.
"A Food and Drug Administration’s guidance for donor eligibility says men who have had sex with men in the past five years “should” be ruled as “ineligible” for donating certain tissues, labeling their behavior a “risk factor.”
...
"The FDA’s guidance reflects its ban on blood from men who have sex with men. That policy is a by-product of the AIDS crisis that ripped through the gay men’s community decades ago.
"The FDA explains its much harder line regarding blood as such: Men who have had sex with men “at any time since 1977 (the beginning of the AIDS epidemic in the United States) are currently deferred as blood donors” because “a history of male-to-male sex is associated with an increased risk for exposure to and transmission of certain infectious diseases, including HIV.”
"Critics have long called the policy discriminatory, but the FDA says it’snecessary: “FDA’s deferral policy is based on the documented increased risk of certain transfusion transmissible infections, such as HIV, associated with male-to-male sex and is not based on any judgment concerning the donor’s sexual orientation.”
...
"In the Journal of the American Medical Association, Glenn Cohen, a bioethics law professor at the Harvard Law School, wrote that the United States should repeal the rules about blood. “We think it’s time for the FDA to take a serious look at this policy, because it’s out of step with peer countries, it’s out of step with modern medicine, it’s out of step with public opinion, and we feel it may be legally problematic,” he told CBS
Cohen notes some contradictions in the FDA blood ban: Men who have sex with HIV-positive women or sex workers are banned for only a year.
Last summer, the American Medical Association voted to end the ban. According to Time magazine, William Kobler, a board member for the the association, said in a statement, “The lifetime ban on blood donation for men who have sex with men is discriminatory and not based on sound science.”
...
"In Betts’s case, his liver, lungs, kidneys and heart all found recipients. Unlike blood, as long as a recipient gives consent to any associated potential risks (such as HIV transmission) after counseling, certain organs can be donated. But because his mother could not confirm to the donor network that her son hadn’t been sexually active in the five years before his death, Betts’s eyes were rejected.
“This is archaic,” Moore told KCCI. “And it is just silly that people wouldn’t get the life-saving assistance they need because of regulations that are 30 years old.”

HT: Thayer Morrill

Wednesday, October 1, 2014

Helmet laws and organ donors

Would it be repugnant to have a state helmet/donor law that said you are free to ride a motorcycle without wearing a helmet, but when you do so you assert that you wish to be an organ donor in the event of a fatal accident?

Here's a paper from 2011 that suggests such a law might have some effect, since apparently helmet laws reduce organ donations.

Donorcycles: Motorcycle Helmet Laws and the Supply of Organ Donors

Stacy Dickert-ConlinTodd Elder (telder@msu.edu) and Brian Moore
Journal of Law and Economics, 2011, vol. 54, issue 4, pages 907 - 935
Abstract: Traffic safety mandates are typically designed to reduce the harmful externalities of risky behaviors. We consider whether motorcycle helmet laws also reduce a beneficial externality by decreasing the supply of viable organ donors. Our central estimates show that organ donations resulting from fatal motor vehicle accidents increase by 10 percent when states repeal helmet laws. Two features of this association suggest that it is causal: first, nearly all of it is concentrated among men, who account for over 90 percent of all motorcyclist deaths, and second, helmet laws are unrelated to the supply of donors who die in circumstances other than motor vehicle accidents. The estimates imply that every death of a helmetless motorcyclist prevents or delays as many as .33 death among individuals on organ transplant waiting lists.


Here's a related news story that came up when I searched:
Economist studies link between helmet-free bikers, organ donors