Football cadence in a noisy stadium

Oklahoma State is playing Iowa State at Iowa State. The crowd is very noisy when OKST is on the field, so the players can not hear the snap count from the quarterback. Usually this leads to a silent count where the offensive players can not anticipate the snap count as they usually do. However, OKST is having the center do a visual snap count. Before he snaps the ball, he sticks his arm straight forward then brings it back and when it gets past his head he snaps the ball. Sometimes he snaps it the first time he does this, sometimes the second, just like a snap count. He his allowed to do this just like he is allowed to point to defenders and make calls. I have never seen this done in the NFL, I wonder if it will catch on.

Optimal PhD core exam implementation

Suppose you are administering a core exam in a PhD program. Your material is such that you want a certain amount of material available to the students while they take this exam. Suppose you decided two years ago that you would let every student take into the exam 3 sheets of paper with students' notes on both sides. Now assume that a student's score is a function of how good and plentiful the information on his sheet is. You find that too many students are passing your minimum threshold because they are bringing in more notes than you thought they could on 3 pages. You realize they are doing this not by handwriting any smaller and smaller, but they are coming up with other ways to get more information on the page, typing it, coming up with shortcuts or abbreviations, etc. You do not want to change your threshold of passing score, but you want fewer students to pass. So you must reduce the distribution of scores by decreasing the amount of notes students are allowed to bring in.

Now you have three options I can see. The first way is to give everyone the same set of notes that the professors would prepare, but then everyone would get the same score, so they can't do that. The second is telling students they can no longer type, and they must write it by hand. The third way is by telling students they may now only bring in 1 sheet of paper front and back. This reduces the information by 2/3.

Which of option 2 or 3 should they choose. I propose they choose the third option. Not only is it easier to enforce, it also selects for more innovative and technologically savvy people compared to option 2. Option 2 on the other hand, is hard to enforce, and instead selects for people that can write small. I would argue in today's society, being technologically savvy and innovative has a stronger correlation with success in almost every field than being able to write small.

Indeed they have chosen option 3.

Eagles draft a Northwesterner

They didn't draft me, but the Eagles drafted the quarterback from Northwestern. Check out the stock photo the Eagles use on their website when they were phone interviewing him. Oh and his name is Kafka.

The role of agents in the NFL draft game

I was explaining how the NFL draft works basically from scratch to an econ PhD student, let's call him Sam. At first Sam thought that teams bid for the players much like free agency. I explained that teams select players and then have the exclusive rights to sign them to a contract for the next year. Sam had big misgivings about this structure. His complaint was that this gives so much power to the teams and that they would be able to get a very good deal since the player has no outside options besides waiting a year and re-entering the draft (where the player would be drafted in a later round and would have a lower expected payoff).

It took me a little while to reconcile why this doesn't happen. Top picks in the draft are generally believed to be overpaid in comparison to what they would be paid in a free agency model. This must mean that the players have much more power than the teams, especially for early draft picks. I resolved this by realizing that the role of agents is more than just understanding the legal intricacies of the contracts. Agents, and the agency problem that ensues, are used by college players entering the draft as a commitment device to reject low offers.

Suppose that Sam Bradford, the consensus number one pick this year had no agent. He would be picked first by the St. Louis Rams, but both the Rams and Bradford would know that if Bradford did not sign, he would have to enter the draft again next year, and after a year of not playing, he would be drafted much lower, maybe at the 10th pick. Suppose the 10th pick usually gets paid half as much as the first pick. Bradford can not credibly threaten not to sign for a low amount if it is higher than what he would get had he been drafted at number 10. The teams can credibly threaten not to raise their offer since they are in a repeated game with draft picks every year, while Bradford is in a single shot game.

But the agents change the game. The agents have an agency problem, which actually serves to benefit the player. While the player can not credibly threaten to not accept an offer higher than his reservation wage, the agent can credibly threaten not to accept an offer higher than the player's reservation wage. This is because the agent is also in a repeated game. If Sam Bradford's agent accepts a deal which is 20% lower than the deal the first pick got last year, he will never work again. So teams know that the agent needs to get a decent deal (relative to past deals).

If the teams try to lowball the offer and the agent refuses and the player enters the draft the next year, this is very bad for the player, but it is not very bad for the agent. The agent gains a reputation for refusing lowball offers, which makes him even more likely to be hired by future college players.

In an ultimatum game setting, suppose the person receiving the offer was allowed to hire an agent to make his decisions and that this agent was a public figure with a reputation. Which agents would be most desirable from the receiver's perspective? They would be the agents who have a reputation for rejecting any offer less than 95% of the total pool. This threat is credible to the person making the offer in the ultimatum game since the agent has a reputation that is valuable to him and would be destroyed by accepting a low offer. So the ability of players in the ultimatum game to hire publicly known agents completely reverses the power each player has in the game, and shifts the rational equilibrium from the offering player extracting most of the surplus to the receiving player extracting most of the surplus. The agents, and the agency problem, act as a commitment device which benefits the players hiring the agents.

Did H1N1 save lives?

Long time, no blog.

Did H1N1 save lives?

This article from philly.com suggests that the H1N1 virus might have actually saved lives. It uses the observation that this winter there was less flu than in recent flu seasons. My initial reaction to this, and in my mind the natural reaction, was that of course there was less flu, people were washing their hands all the time. The article makes reference to hand washing parenthetically, but dismisses it as the cause for no apparent reason. This past winter I washed my hands more than twice as much as usual, and we all know the plural of anecdote is data.

I see no reason why people's fear of swine flu and their subsequent good hygiene could not have caused a drastic drop in the flu this past season. Often the simplest explanation is the correct one, although maybe not the one that makes for a 3 page newspaper article.

Strip iterated prisoner's dilemma

(Image courtesy of xkcd, click for larger image)

Consider the following two player game. Players 1 and 2 have strictly increasing and strictly convex preferences which admit a utility function representation over the number of songs they see a stripper dance to. The game they play is a finitely iterated game in which each player chooses cooperate or defect in the beginning of the period. The payoffs of the game are as follows. If both players choose cooperate, the stripper dances to two songs in the period. If both players choose defect the stripper dances to one song in the period. If one player chooses cooperate and the other chooses defect, the player choosing defect will receive a 3 song private dance.

How does the sub game perfect Nash equilibrium depend on the parameters of the number of periods and the curvature of the utility functions? With the assumptions in the statement of the problem, is it possible for cooperate cooperate to be played repeatedly in the infinitely repeated game?

Quote of the week

Another one from my macro professor. I think the material is really boring, but he says some funny things every now and then.

On why Ricardian Equivalence (the concept that the timing of taxes does not impact consumer choices i.e. it doesn't matter if you finance government spending with taxes today or taxes tomorrow) might fail in the real world:

"People could be retards...sorry I'm not supposed to say that."