Saturday, October 21, 2017

Information, school quality and school choice

Here's a recent article by Gail Cornwall in The Atlantic, summarizing some of the work on school choice which points out that it is easier for parents to judge the test scores of graduates than the value-added by the school.

Why Parents Make Flawed Choices About Their Kids' Schooling
A new study shows that families act on insufficient information when it comes to figuring out where to enroll their children.

It covers (among other things) work by Atila Abdulkadiroglu and Parag Pathak and various colleagues, including the recent NBER working paper

Do Parents Value School Effectiveness?

Atila AbdulkadirogluParag A. PathakJonathan SchellenbergChristopher R. Walters

NBER Working Paper No. 23912
Issued in October 2017
NBER Program(s):   ED   LS 
School choice may lead to improvements in school productivity if parents' choices reward effective schools and punish ineffective ones. This mechanism requires parents to choose schools based on causal effectiveness rather than peer characteristics. We study relationships among parent preferences, peer quality, and causal effects on outcomes for applicants to New York City's centralized high school assignment mechanism. We use applicants' rank-ordered choice lists to measure preferences and to construct selection-corrected estimates of treatment effects on test scores and high school graduation. We also estimate impacts on college attendance and college quality. Parents prefer schools that enroll high-achieving peers, and these schools generate larger improvements in short- and long-run student outcomes. We find no relationship between preferences and school effectiveness after controlling for peer quality.

Friday, October 20, 2017

The AEA and the job market

Should the American Economic Association make further interventions to facilitate the job market for new economists?  Should it issue a code of conduct to guide behavior in various realms in which economists interact?  Both of those are under consideration, as announced today on the society's website.

Here's the text of the email announcement to members:


Statement of the AEA Executive Committee
October 20, 2017

To: Members of the American Economic Association
From: Peter L. Rousseau, Secretary-Treasurer
Subject: Statement of the AEA Executive Committee
Many members of the economics community have expressed concern about offensive behavior within our profession that demeans individuals or groups of individuals. The American Economic Association strongly condemns misogyny, racism, homophobia, antisemitism and other behaviors that harm our profession.

AEA President Alvin E. Roth has charged an ad hoc committee on professional conduct to formulate a set of guidelines for economists to be considered by the Executive Committee. The ad hoc committee is charged with evaluating various aspects of professional conduct, including those which stifle diversity in Economics. It will submit a report in time for discussion in January. There will be a period for comment by the AEA membership on that report following its release.

The Association is also exploring the possibility of creating a website/message board designed to provide additional information and transparency to the job market for new Ph.D.s, and will be surveying departments to assess what information about their search processes might be shared.

Repugnance watch: Appeals court in SF allows challenge to state law banning prostitution

The SF Chronicle has the story: Appeals court in SF allows challenge to state law banning prostitution

"Advocates of legalized prostitution took their challenge to California’s 145-year-old ban on commercial sex before a federal appeals court Thursday and appeared to get a hint that they’ll have another chance to show why the law should be cast aside.


The case was brought by three former prostitutes, a would-be client and the Erotic Service Providers Legal, Educational and Research Project. They contend the law violates the right to engage in consensual sex, as defined by the U.S. Supreme Court in a 2003 ruling overturning criminal laws against gay sexual activity.

U.S. District Judge Jeffrey White of Oakland rejected their argument last year, saying the high court ruling protected only intimate personal relationships, not commercial sex. He said the state had adequately justified the current law as a deterrent to violence against women, sexually transmitted diseases and human trafficking.

But at Thursday’s hearing, members of a three-judge panel of the Ninth U.S. Circuit Court of Appeals in San Francisco suggested that the law might need closer scrutiny, given today’s less restrictive standards, as recognized by the high court, on sex between consenting adults.

Why should it be illegal to sell something that it’s legal to give away?” asked Carlos Bea, one of the court’s most conservative judges.

Another conservative, Judge Consuelo Callahan, pointed out that prostitution, like gay sex, had historically been “subject to moral disapproval.” Just as in 2003, the current case, she said, “deals with individuals’ rights,” so why wouldn’t a ruling for the right to engage in prostitution be “a natural extension of Supreme Court precedent?”


Deputy Attorney General Sharon O’Grady, the state’s lawyer, responded that the difference is in “the commercial aspect ... the commodification of sex.”

“The state is not telling anyone who they can sleep with,” O’Grady said. It is prohibiting only a harmful category of business transactions, not intimate or enduring relationships, she said.

But Bea said the 2003 Supreme Court ruling might require the court to send the case back to White for another review, and perhaps even a full-scale trial, in which the state would have to show a compelling need for the law.

California made prostitution a crime in 1872, defining “every common prostitute” as a “vagrant” subject to a $500 fine and six months in jail. The law was updated in 1961 to reclassify prostitution or soliciting prostitution as disorderly conduct, a misdemeanor punishable by a $1,000 fine and six months in jail.

The Ninth Circuit left the state law intact in a 1988 ruling that said the relationship between a paid escort and a client “possesses few, if any, of the aspects of an intimate association.” H. Louis Sirkin, the plaintiffs’ lawyer in the current case, argued that the ruling is no longer binding.

The Supreme Court’s 2003 decision established “the right of individuals to make their own individual choices as to how they want to behave” in consensual sexual relationships, Sirkin told the court. “If people put a dollar amount on it, that should not alter the intimate relationship.”

Thursday, October 19, 2017

NBER Market Design Working Group Meeting tomorrow and Saturday

The market design meeting starting tomorrow in Boston includes two "New Directions" sessions, one on Transportation and Market Design and one on Development Economics and Market Design.

Here's the program: Market Design Working Group Meeting
Michael Ostrovsky and Parag A. Pathak, Organizers
October 20-21, 2017

NBER
Feldstein Conference Room, 2nd Floor
1050 Massachusetts Avenue
Cambridge, MA
Friday, October 20

9:00 am
Haluk Ergin, University of California at Berkeley
Tayfun Sönmez, Boston College
Utku Unver, Boston College
Efficient and Incentive Compatible Liver Exchange
9:45 am
Nikhil Agarwal, Massachusetts Institute of Technology and NBER
Itai Ashlagi, Stanford University
Michael A. Rees, University of Toledo Medical Center
Paulo J. Somaini, Stanford University and NBER
Daniel C. Waldinger, Massachusetts Institute of Technology
An Empirical Framework for Sequential Assignments: The Allocation of Deceased Donor Kidneys
10:30 am
Break
11:00 am
Eric Budish, University of Chicago and NBER
Robin S. Lee, Harvard University and NBER
Will the Market Fix the Market? A Theory of Stock Market Competition and Innovation
11:45 am
Albert "Pete" Kyle, University of Maryland
Jeongmin Lee, Washington University in St. Louis
Toward a Fully Continuous Exchange
12:30 pm
Lunch
2:00 pm
Paul Milgrom, Stanford University
Ilya Segal, Stanford University
Deferred-Acceptance Clock Auctions and Radio Spectrum Reallocation
2:45 pm
Lawrence Ausubel, University of Maryland
Christina Aperjis, Power Auctions LLC
Oleg V. Baranov, University of Colorado Boulder
Market Design and the FCC Incentive Auction
3:30 pm
Ulrich Doraszelski, University of Pennsylvania and NBER
Katja Seim, University of Pennsylvania and NBER
Michael Sinkinson, Yale University and NBER
Peichun Wang, University of Pennsylvania
Ownership Concentration and Strategic Supply Reduction
4:15 pm
Break
New Directions: Transportation and Market Design
4:30 pm
Michael Ostrovsky, Stanford University and NBER
Michael Schwarz, Google Research
To Be Announced
5:00 pm
Peter Cramton, University of Maryland
Richard Geddes, Cornell University
Axel Ockenfels, University of Cologne
Markets for Road Use: Eliminating Congestion through Scheduling, Routing, and Real-Time Road Pricing
5:30 pm
Juan Camilo Castillo, Stanford University
Dan Knoepfle, Uber Technologies
Glen Weyl, Microsoft Research
Surge Pricing Solves the Wild Goose Chase (slides)
6:00 pm
Adjourn

Saturday, October 21
8:15 am
Coach Bus leaves Royal Sonesta Hotel for NBER
8:30 am
Continental Breakfast
9:00 am
Parag A. Pathak, Massachusetts Institute of Technology and NBER
Peng Shi, Massachusetts Institute of Technology
How Well Do Structural Demand Models Work? Counterfactual Predictions in School Choice
9:45 am
Georgy Artemov, University of Melbourne
Yeon-Koo Che, Columbia University
Yinghua He, Rice University
Strategic `Mistakes': Implications for Market Design Research
10:30 am
Break
11:00 am
Jacob D. Leshno, Columbia University
Irene Y. Lo, Columbia University
The Cutoff Structure of Top Trading Cycles in School Choice
11:45 am
Esen Onur, CFTC
David Reiffen, CFTC
Lynn Riggs, CFTC
Haoxiang Zhu, Massachusetts Institute of Technology and NBER
Mechanism Selection and Trade Formation on Swap Execution Facilities: Evidence from Index CDS
12:30 pm
Lunch
2:00 pm
Constantinos Daskalakis, Massachusetts Institute of Technology
Christos H. Papadimitriou, University of California at Berkeley
Christos Tzamos, Microsoft Research
Does Information Revelation Improve Revenue?
2:45 pm
Dirk Bergemann, Yale University
Tibor Heumann, HEC - Montreal
Stephen Morris, Princeton University
Information and Market Power
3:30 pm
Break
New Directions: Development Economics and Market Design
4:00 pm
Jean-François Houde, Cornell University and NBER
Terence R. Johnson, University of Notre Dame
Molly Lipscomb, University of Virginia
Laura A. Schechter, University of Wisconsin, Madison
Using Market Mechanisms to Increase the Take-up of Improved Sanitation in Senegal
4:30 pm
Reshmaan N. Hussam, Yale University
Natalia Rigol, Massachusetts Institute of Technology
Benjamin N. Roth, Massachusetts Institute of Technology
Targeting High Ability Entrepreneurs Using Community Information: Mechanism Design in the Field
5:00 pm
Yusuke Narita, Yale University
Experimental Design as Market Design: Billions of Dollars Worth of Treatment Assignments
5:30 pm
Adjourn

Wednesday, October 18, 2017

Remembering Howard Raiffa

The Negotiation Journal has published some memories of Howard Raiffa, who passed away in July of last year. Here's my contribution:


Some Memories of My Academic Grandfather

Authors

I first met Howard shortly after I received my Ph.D. from Stanford University in 1974. Robert B. Wilson, my advisor, had been Howard's student, and so Howard was my academic grandfather. I visited Howard in his office at Harvard Business School and talked with him about my dissertation. I had worked on a generalization of what were called von Neumann-Morgenstern solutions, which were sets of game outcomes, characterized by two properties, internal and external stability. As I recall the discussion, Howard said something like this to me: “If you want to generalize solutions, you have to give up one of those two properties. Which one did you give up?” When I told him I had relaxed the requirement of external stability, he paused and then said, “That's a lot to give up!” I recall thinking that my introduction to Howard had gotten off to a poor start.
I did not see Howard often after that until 1998, when my wife, Emilie, and I moved to Brookline, Massachusetts. We invited Howard and his wife, Estelle, to our Passover Seder, and they were among the last guests to arrive. They explained that they had driven from their home in Belmont to ours in Brookline, seen a line of cars parked outside a house similar to the one we had described, and had gone in and mingled. Only when that family took their seats for the Seder did they discover that they were at the wrong house. And indeed, they knew many more of the guests at our Seder. They became regulars at our Seder until they started spending more time in Arizona.
A distinguished line of academic descendants have followed Howard's lead in seeking what motivates practical behavior. These include Bob Wilson's students Paul Milgrom and Bengt Holmstrom, and a growing number of their students and mine as well. The thriving fields of experimental and behavioral economics and market design testify to Howard's legacy.
*************
Here is the table of contents of the special issue


  1. Special Issue: Celebrating Howard Raiffa's Legacy
    James K. Sebenius and Max H. Bazerman
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12209
  2. Prescriptions Based on a Realistic View of Human Behavior (pages 309–315)
    Max H. Bazerman
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12189
  3. Conflict Resolution by the Numbers (pages 317–322)
    Carrie Menkel-Meadow
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12190
  4. Balancing Analysis and Intuition (pages 323–327)
    Lawrence Susskind
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12191
  5. Howard Raiffa and Our Responsibility to Rationality (pages 329–332)
    Richard Zeckhauser
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12192
  6. A Short Course from Howard Raiffa (pages 333–335)
    Deborah M. Kolb
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12193
  7. Counting and Caring (pages 337–339)
    Lawrence H. Summers
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12194
  8. Mr. Positive Sum (pages 355–357)
    William Ury
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12198
  9. Tales of a True Mensch (pages 351–354)
    Robert H. Mnookin
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12197
  10. Howard Raiffa: Scholar, Leader, Teacher, Mentor, Friend (pages 359–362)
    Ralph L. Keeney
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12199
  11. Wisdom in Simplicity (pages 363–365)
    Jared R. Curhan
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12200
  12. Bridging Data, Decisions, and Negotiations (pages 367–370)
    Michael Wheeler
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12201
  13. Life Is Not Binary (pages 371–372)
    Mary Rowe
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12202
  14. Some Memories of My Academic Grandfather (pages 373–374)
    Alvin E. Roth
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12203
  15. Asking the Right Questions (pages 375–378)
    Susan G. Hackley
    Version of Record online: 18 OCT 2017 | DOI: 10.1111/nejo.12204