Saturday, November 24, 2012

Anti-economics (If Michael Sandel Ruled the World)


The first sentence of the first paragraph: "If I ruled the world, I would rewrite the economics textbooks."

The first sentence of the second paragraph: "Consider the case for a free market in human organs—kidneys, for example."

Economics is important...sounds like someone should study it...

Friday, November 23, 2012

A philosopher looks at repugnant markets

The Dutch philosopher/economist Ingrid Robeyns writes about Roth and Satz on repugnant/noxious markets

She writes that "economists would benefit from explicitly introducing values in their analysis of repugnant markets (and markets in general)," and holds up the work of Debra Satz as a good example of how to go about this.


(Here are my previous posts related to the work of my now-colleague Debra Satz.)

Thursday, November 22, 2012

Happy Thanksgiving (and kidney exchange)

A very happy Thanksgiving to all who read this:)

I got the following very informative greeting (sort of a year-end letter and report) from my friends at the Alliance for Paired Donation. Among the exciting things going on there is an attempt to design a new financial architecture for kidney exchange.

Tuesday, November 20, 2012

Breast milk exchange?


Ben Greiner writes:

This might be an interesting upcoming story on repugnance: Due to the general positive effects, but also the social pressure to breast feed, there seems to be a developing exchange market for breast milk. For example there are organizations like

or
or

who actively promote breast milk sharing, in particular also with strangers over the internet and/or facebook.

However, in particular in the U.S. mothers are starting to ask for money in exchange for breast milk. There also seem to be stories about some mothers diluting their breast milk with water to make more money out of them. Another issue is hygiene and sterilization.

So I guess in short or long there will be a discussion about whether it is ok to share or even sell breast milk, and if trade is allowed, about how to regulate this trade given baby safety risks etc.


Monday, November 19, 2012

Game theory and differential privacy

Here's a lecture on game theory and differential privacy, by Aaron Roth, an up and coming computer scientist whose work I've followed for a long time


DIMACS Tutorials - Oct 24, 2012: Aaron Roth - Game Theory and Differential Privacy

Sunday, November 18, 2012

State laws against price gouging

Michael Giberson provides this list:

State
Year
Notes
Alabama
1996
Code of Ala. § 8-31-1 thru § 8-31-6. LINK Alabama law; Any commodity or rental facility.
Arkansas
1997
A.C.A. § 4-88-301 – 4-88-305.
California
1994
Cal. Pen. Code § 396.
Connecticut
1986
Conn. Gen. Stat. § 42-230.
District of Columbia
2007
D.C. Code § 28-4101 thru 28-4102.
Florida
1992
Fla. Stat. § 501.160.
Georgia
1995
O.C.G.A. § 10-1-393.4.
Hawaii
1983
Haw. Rev. Stat. § 209-9
Idaho
2002
Idaho Code § 48-603; Food, fuel, pharmaceuticals, water.
Illinois
2005
Ill. Admin. Code tit. 14, §§ 465.10 thru 465.30.
Indiana
2002
Ind. Code §§ 4-6-9.1-1 thru 4-6-9.1-7; Fuel.
Iowa
1993
61 IAC 31.1(714); Merchandise needed by victims of disasters.
Kansas
2002
K.S.A. § 50-6,106; Any necessary property or service.
Kentucky
2004
Ky. Rev. Stat. Ann.  § 367.374.
Louisiana
1993
La. R.S. 29:732 LINK Louisiana law.
Maine
2006
10 M.R.S.A. § 1105.
Massachusetts
1990
Md. Reg. Code tit. 940, § 3.18; Petroleum products only.
Michigan
*
Mich. Stat. Ann. § 445.903(1)(z); General consumer code provisions not limited to emergencies.
Mississippi
1986
Miss. Code Ann. § 75-24-25(2).
Missouri
1994
15 CSR § 60-8.030; Necessities.
New Jersey
2001
N.J.S.A. §§ 56:8-107 to 8:109; LINK New Jersey law; Necessities.
New York
1979
NY Gen Bus §396-r.
North Carolina
2003
N.C. Gen. Stat. § 75-38; LINK North Carolina law.
Oklahoma
1999
15 OK St. §§ 777.1 thru 777.5.
Oregon
2007
ORS 401.960 thru 401.970; LINK Oregon law; Essential consumer goods and services.
Pennsylvania
2006
Rhode Island
2012
Rhode Island General Laws §30-15-19; Essential commodities including home heating fuels, motor fuels, food and water.
South Carolina
2002
SC Code 39-5-145.
Tennessee
2002
TCA Title 47 Chapter 18 Part 51; LINK Tennesee Law.
Texas
1995
Tex. Bus. & Com. Code Ann. § 17.46(b)(27) LINK Texas law; Necessities.
Utah
2005
Utah Code § 13-41-101 thru 13-41-202. Link Utah law; Retail goods and services.
Vermont
2006
9 V.S.A. § 2461d; LINK Vermont law; Petroleum or heating fuel product only.
Virginia
2004
Va. Code §§ 59.1-525 et seq., LINK Virginia law; Any necessary goods and services.
West Virginia
2002
W.V. Code § 46A-6J-1
Wisconsin
2006
Wisc. ATCP Ch. 106; Link Wisconsin law.
List updated November 3, 2012 by Michael Giberson.
Please see list of resources below for useful links on price gouging. (http://knowledgeproblem.com/2012/11/03/list-of-price-gouging-laws/

Saturday, November 17, 2012

Organ harvesting and Chinese-Israeli diplomacy


How Israel and China got into a diplomatic row over Knesset members and organ harvesting: Chinese embassy demands clarifications from Jerusalem after report on the settler radio station with the headline 'Israeli MKs to the UN: Investigate China’s organ harvest.'

Signing petitions without reading them can cause diplomatic problems (or maybe claiming not to have read them is a diplomatic solution).

Friday, November 16, 2012

Israel Radio: Douglas Goldstein interviews Bob Aumann about 2012 Economics Nobel

Bob Aumann is interviewed on Israel Radio, and talks about the 2012 Nobel Memorial Prize in economics.

"What is pairwise matching, and how does it affect our decisions in life, such as who we marry or where we study? Nobel Prize winner Robert Aumann explains the meaning of pairwise matching, which was the subject that brought the current winners, Alvin Roth and Lloyd Shapley, their prize."


Thursday, November 15, 2012

Economic Science Association conference in Tucson, Nov 15-17

The North American regional conference will be held again in Tucson this year,from Thursday evening November 15 (reception) through Saturday 6:00p.m. November 17 (but there's a good chance that it will move in the future, as none of the current organizers are presently located in Tucson...)

The keynote speakers will be Ulrike Malmendier and Guillaume Frechette.

And "Four pioneers of experimental economics (John Kagel, Charles Plott, Reinhard Selten, and Vernon Smith) will offer their perspectives on how the field developed and where it should be headed."



Wednesday, November 14, 2012

Matching in the EU: Market Failures and Solutions

The Bellaterra Campus of the Universitat Autònoma de Barcelona is the center of matching and market design this week, with two conferences.


Scientific Comittee: Estelle Cantillon (ECARES), Antonio Miralles (UAB-MOVE) and Péter Biro (HAS)
Program: download pdf
For further information: please write at info@movebarcelona.eu This e-mail address is being protected from spambots. You need JavaScript enabled to view it



November 16: The European Science Foundation is sponsoring a workshop called

Matching in the EU: Market Failures and Solutions
Convened by: Péter Biró, Estelle Cantillon and Flip Klijn


"The proposed workshop (and future research) is exploratory and novel as it focuses on the frontiers at the interface of matching theory, laboratory experiments, empirical analysis and market design / policy making. The goal is to bring together active researchers from different fields to systematically explore the current European practices in student admissions (primary, secondary, and higher), entry-level professional labour markets, and other matching markets. We aim to find out
- which clearinghouses and decentralized matching markets are at work in the EU;
- what are the economical and social implications of the different policies;
- which problems (if any) are experienced by the matching schemes;
- how market failures can be solved; and
- how cultural differences between different EU countries do or should play a role in the redesign of the matching markets that experience failures."

Tuesday, November 13, 2012

Dean Rachel Croson

Economist Rachel Croson Named Dean of the UT Arlington College of Business

"Much of Croson’s research has centered on experimental and behavioral economics, investigating how people make economic decisions and how to improve them, she said.

"Those subject areas draw on and contribute to many disciplines, including economics, management, marketing, operations, political science and sociology, and her work has been published in myriad journals. As director of UT Dallas’ Negotiations Center, she connected negotiation scholars with practitioners and business leaders to inform business practice through education and outreach.

"Croson also is the co-editor of a forthcoming book, Oxford Handbook of Economic Conflict Resolution, with Gary Bolton, and is currently researching motivations for charitable giving, among other subjects."
**********

A big mabruk to Dean Rachel Toni Algaze Croson.

Bicker at Princeton

Vikram Rao writes about recent changes in the matching process of students to eating clubs at Princeton:


Professor Roth,

I'm a fan of your blog and recently came across an event that you might find interesting. I studied as an undergrad at Princeton, which is known for its "eating clubs" - similar to frats or sororities, but they are co-ed, serve meals, and function as daytime study and lounge spaces. Anyway, admission to half the eating clubs is by "sign-in" where a lottery occurs if too many students try to sign in. The other half of the clubs have a process called "bicker" - a traditional matching process where prospective members show up for a few days of events and then members discuss and vote on each prospective member.

Recently, a few of the clubs decided to allow prospective members to bicker two clubs instead of one (http://www.dailyprincetonian.com/2012/11/08/31741/). Students rank their clubs and then show up to events for both; they are NOT allowed to indicate equal preference for both clubs (this fact isn't in the article but I know from friends). The interesting situation arises when a student is accepted at both clubs - the matching algorithm will always default to the student's preference for club (so if I get into club A and B and said I preferred B beforehand, I will be placed in B). 

On the face of things, this sounds unremarkable. However, I think this matching market has an interesting wrinkle for students who are admitted to two clubs. 

Following the "bicker" process, prospective members are ranked by each club. Prospective members aren't supposed to find out how they did at bicker, but as you might imagine gossip spreads and the people who were ranked the highest often find out about it. Those who did well feel like they belong and are more excited about the club. 

Given the opportunity to bicker more than one club, I suspect that some students will be indifferent or close to indifferent between two clubs. But they will be forced to rank the two clubs. Following the bicker process, it might turn out that they did much better at their #2 ranked club. But the match will sort them into their #1 ranked club. Given the aforementioned desire to “belong”, it’s possible that this could lead to instability in the match (Student: “Now that I know I did so much better at club C bicker, I wish I ranked it ahead of club D!”). Perhaps a way to solve this is to let students indicate indifference between the two clubs beforehand and then have the algorithm place them in the club that ranked them higher.

This situation seems to differ from say a medical residency or a job where most people probably want their best possible job regardless of how well their application was perceived by those doing the evaluation. With a social group like this, you don’t just want to get in but might also want to feel “wanted” in an ongoing way.

Monday, November 12, 2012

David Warsh reflects on Howard Raiffa's memoir and career

On the anniversary of the Cuban Missile crisis, David Warsh reads some books, ending up with Howard Raiffa's memoir, about which he has this to say:


High drama, great stuff.  But I wanted something a little closer to life as we had lived it in the decades since that narrow escape. I found it in Memoir: Analytical Roots of a Decision Scientist, by Howard Raiffa. His name is hardly a household word. Raiffa is one of those intellectuals who in the years since World War II fundamentally transformed the world in which we live, as one of the foremost pioneers of the application of mathematics to business – not just game theory, but Bayesian statistical decision analysis as well.
Aas it happens, between 1968 and 1975 Raiffa also organized, and then  administered the joint US- Soviet think-tank known as the International Institute for Applied Systems Analysis. IASSA (pronounced YASSA), itself hardly a household word, is one of the durable outgrowths of the Cuban missile crisis and, in many ways, a symbol of the strange interregnum of the 1970s known as détente. Last week in Vienna, IASSA celebrated its fortieth anniversary having been, among other things, the cradle of climate modeling.
It is not the career you would have expected from a rangy kid in the Bronx who loved basketball better than schoolbooks.  At thirteen, Raiffa played in a high school championship game inMadison Square Garden. At sixteen, in 1940, however, he met Estelle Schwartz, whom he would marry five years later. She was a student at Manhattan’s High School of Music and Art; to stay close, he enrolled in the City College of New York. He loaded up on math courses; his basketball aspirations shifted from playing to coaching. Three semesters later, he enlisted, eventually becoming an air traffic control officer working on radar for the Army Air Corps. When peace came, he was sent toJapan.
After mustering out, Raiffa switched to theUniversity of Michigan.  He turned out to be a much better student that he had thought. Since the engineering profession was said to be generally anti-Semitic; he resolved to become an actuary. Estelle Raiffa obtained a masters degree in elementary education, teaching autoworkers’ kids at Willow Run, near Ann Arbor.  Six years later they were still there.  Raiffa had run into Kenneth Arrow, Robert Tucker, John Nash, Abraham Wald, Lawrence Klein and Robert Solow. He had become a mathematician, working in the borderlands of economics, psychology and the new field of operations research.
Abraham Wald was killed in a air crash; to replace him, Columbia hired Raiffa in 1952.  (He turned down what would have been a better-paying offer to work with Claude Shannon at Bell Labs).   Columbia had been a hotbed of statistics since before the war; it was teaching there that Raiffa began his conversion to the Bayesian approach, gradually learning to update initial beliefs with objective new information as it arrived, just as Rev. Thomas Bayes, the early eighteenth-century amateur mathematician, had first maintained should be done when thinking probabilistically.
Having been trained in the verities of classical (Neyman-Pearson) statistics, Raiffa’s colleagues complained: “Look, Howard [he says they would say], what are you trying to do?  Introduce squishy judgmental psychological stuff into something which we think is a science?”  In reply, he quoted the legendary Leonard Jimmie Savage (by then Savage had joined Milton Friedman and Allen Wallis at the University of Chicago): “Yes, I would rather build an edifice on the shifting sands of subjective probabilities than build upon a void.”
(For an illuminating account of this revolution in statistical thinking, including a chapter on what Raiffa did next, see The Theory that Would Not Die: How Bayes Rule Cracked the Enigma Code, Hunted Down Russian Submarines, & Emerged Triumphant from Two Centuries of Controversy, by Sharon Bertsch McGrayne, Yale University Press, 2011.  It is at least a very useful complement to Nate Silver’s The Signal and the Noise – Why So Many Predictions Fail but Some Don’t, Penguin, 2012, and in some ways a much better book.)
It was when HarvardBusinessSchoolhired him in 1957 that Raiffa’s major phase began. By then, Games and Decisions: Introduction and Critical Survey, the text he had written withDuncan Luce, had appeared and opened a portal through which game theorists and economists would pass in the next generation. (Its original title had been Conflict, Cooperation, and Conciliation.)  A new department of statistics was forming, one that included Frederick Mosteller, Raiffa, John Pratt and, for a time, the ancient Greek scholar Robert Schlaifer. In the next few years Raiffa’s students included Richard Zeckhauser, Robert Wilson, Michael Spence. Edith Stokey, Roger Myerson, Eric Maskin (at least three future Nobel laureates among them), and even a young Lawrence Summers, who pronounced Games and Decisions among the most eye-opening books he had ever read.  B-school students called Raiffa “Mr. Decision Tree.”  He started an institute to intensively train forty professors in the new methods of game theory, decision analysis, and operations research. Several subsequently became influential business school deans: Lawrence Fouraker at Harvard; Robert Jaedicke at Stanford; Donald Jacobs at Northwestern.
It was in 1966 that President Lyndon Johnson asked National Security Advisor McGeorge Bundy to investigate whether some new form of high level cooperation with the Soviets might be possible. The missile crisis had demonstrated the value of the teletype connection linking the White House and the Kremlin that was the “hotline” that Thomas Schelling had proposed in 1958.  Stanley Kubrick’s Dr. Strangelove was making vivid to moviegoers the dangers of mutual incomprehension.  Perhaps a bricks-and-mortar East-West center for high-level social scientists working together on problems experienced by communist and capitalist societies alike – energy, water resources, food and agriculture, population studies, urban policies – would enhance chances for peace. (It subsequently turned out that Francis Bator, Bundy’s deputy at the NSC, had thought up IASSA and planted the idea with the president, much as W.W. Rostow had first imagined the UN’s Economic Commission for Europe as a bridge between East and West, over which economist Gunnar Myrdal would preside for a decade in Geneva in the 1950s.) In early 1968, Raiffa agreed to take on the task.
The Soviets agreed. Newly-elected President Richard Nixon signed on. Viennawas chosen. What emerged, when the heavily renovated old palace outside of Vienna finally opened its doors in 1973, was a thinking-person’s version of what by then truly was a household word:  the Club of Rome.  That self-proclaimed “group of world citizens, sharing a common concern for the future of humanity” had grabbed headlines in the early 1970s with a bootleg computer model designed to demonstrate the need  for “lifeboat ethics” – a Dr. Strangelove script for the newspapers.
Clearly some sort of deeper dispassionate long-term thinking was needed about where the planet was headed.  So Raiffa populated the Vienna installation with first-rate intellects willing to take one- or two-year appointments in order to get things started, including Arrow, George Dantzig, Tjalling Koopmans, William Nordhaus, Alan Manne — and Donella and Dennis Meadows, principal authors of Club of Rome’s Limits to Growth. Raiffa hired talented Soviets; decreed that seminars would be conducted only in English, anticipating a trend that has since spread around the world; and encouraged the development of small environmental models, as opposed to the behemoths that Soviet planners preferred. “Howard was a latter-day George Washington,” says Mark Thomson, who served as Raiffa’s executive assistant in those years. “He was devoted in every way possible to the overall cause.”  Bundy later said that IASSA had succeeded only “because Howard didn’t know that it was impossible.”
IASSA slowed down some when Raiffa returned to Harvard in 1975, after three years as director, and soon thereafter founded its Project on Negotiation. (His 1985 Art and Science of Negotiation: How to Resolve Conflicts and Get the Best Out of Bargaining is today Raiffa’s best-read book. Harvard Law Professor Roger Fisher, who died, at 90, in August, soon joined the Negotiation project and later  sold 8 million copies of Getting to Yes: Negotiating Agreement without Giving In, cowritten with William Ury. Events accelerated; IASSA’s appointments became less spectacular. There was a fracas during the Reagan administration over whether it had become a nest of Soviet spies.  Institutes for Advanced Study in Princeton and Berlin impinged on its turf.  Its most successful project, climate modeling, was essentially spun out, to the International Energy Workshop and the UN’sIntergovernmental Panel on Climate Change.
Still, if the YouTube selections from the celebration in Vienna last week are any guide, IASSA remains a vital intellectual center, sponsoring systems analysis work on an array of interesting problems, ready to play a part whenever the next global crisis – food? water? – becomes acute.  The Raiffas attended, despite a twenty-year-long battle with Parkinson’s Disease that has reduced his mobility, before flying home for his friend Fisher’s memorial service.
Decision analysis is now firmly established. The carefully–designed controlled experiments for which Daniel Kahneman (and, by extension, his late research partner Amos Tversky) received the 2002 Nobel Prize in Economics, were predicated on an extensive body of body of prior work. It was after receiving Carnegie-Mellon University’s Dickson Prize, one of a handful of such awards that exist within the penumbra of the Nobel, that Raiffa undertook his Memoir. In its closing pages, he envisages departments of decision science within universities. These, he says, would offer instruction to undergraduates (Societal Risk Analysis, for example, Organizational Design and Structures of Constitutions); perform research on decision-making at once empirical, normative and prescriptive; and train a new breed of specialists: decision advisors, or DAs, equipped to help decision makers confront the intricate choices they must make. It all takes time, of course. Big mistakes still occur (remember Saddam Hussein’s weapons of mass destruction?). But what a long way we have come in the half centuty since the Cuban missile crisis.