Britains ministry of nudges

The nytimes has a nice article on the efforts of nudges in Britain.

Graduate Students on the JM: Pete Troyan

Pete Troyan is a theorist with a strong interest in matching theory who is also open to experiments. His JM paper, joint with Dan Fragiadakis (about whom I blogged yesterday), is theory paper on matching: Specifically, it deals with two-sided matching problems, where the other side may be objects or agents (such as medical residency positions to medical students, school slots to students, military assignments to military cadets, etc). Their starting point is that often in such assignments, the designer (the school board, the medical association etc) wants to have fulfill certain distributional constraints: for example a minimum number of medical residents in rural areas, or cadets in each branch, or, thinking about diversity, demographic distributions in each school. 

The abstract continues as:
"Standard assignment mechanisms implemented in practice are unable to accommodate all of these constraints. This leads policymakers to resort to ad-hoc solutions that eliminate blocks of seats ex-ante (before agents submit their preferences) to ensure that all constraints are satisfied ex-post. 

We show that these solutions ignore important information contained in the submitted preferences, resulting in avoidable inefficiency. We introduce a new class of dynamic quotas mechanisms that allow the institutional quotas to dynamically adjust to the submitted preferences of the agents. We show how a wide class of mechanisms commonly used in the field can be adapted to our dynamic quotas framework. Focusing in particular on a new dynamic quotas deferred acceptance (DQDA) mechanism, we show that DQDA Pareto dominates current solutions. While it may seem that allowing the quotas to depend on the submitted preferences would compromise the strategyproofness of deferred acceptance, we show that this is not the case: as long as the order in which the quotas are adjusted is determined exogenously to the preferences, DQDA remains strategyproof. Thus, policymakers can be confident that efficiency will be improved without introducing perverse incentives. Simulations with school choice data are used to quantify the potential efficiency gains."

Pete has, next to his JM paper which is an theory paper on matching, three more matching papers, one of which is already published, and one of which is an experiment (the paper that Dan Fragiadakis uses as a JM paper). Pete has also theory work not related to matching. 

Graduate Students on the JM: Dan Fragiadakis

Dan Fragiadakis is an experimental economist with a strong background in matching theory. His JM paper, joint with Pete Troyan (about whom I'll blog tomorrow), is an experiment on matching: Specifically, it deals with the issue where objects are allocated to agents without the use of money (such as school slots to students, teaching assignments at TFA to applicants, houses to college students, or trips abroad to MBA's at many business schools). Their main point is that while market designers have in the past promoted strategy-proof mechanisms, in some environments non-strategyproof mechanisms (such as the one employed by Stanford GSB) may yield superior outcomes not only in theory but also in experiments.This suggests that we should reopen the debate, as market designers, on the use of non-strategyproof mechanisms.

Dan has, next to his JM paper which is an experiment on matching, one more experimental paper (joint with me and Dan Knoeplfe, another Stanford grad student), and two theory papers on matching, one of which is the paper that Pete Troyan uses as his JM paper. I'll blog about Pete Troyan tomorrow.