Adriana Lleras-Muney in Vox and The New York Times

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Adriana Lleras-Muney’s co-authored article on mothers’ pensions has been cited in two national news outlets this month, The New York Times and Vox.  The New York Times article cites Lleras-Muney’s study in an article about supply side economics, while Vox draws upon her research in connection to child poverty in the U.S..  Professor Lleras-Muney’s paper shows how paying cash to poor families where the breadwinner died led those children to earn significantly higher incomes.

Jay Lu wins Winter 2017 Scoville Teaching Award

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We would like to congratulate Jay Lu for winning the Scoville Award for best undergraduate teaching in Winter 2017 for his class Econ 148 on Behavioral Economics.

Jay Lu

Behavioral economics is a subfield of economics that incorporates insights from psychology and other social sciences. The broad goal is to improve the realism of economic models by incorporating features such as aversion for losses, problems with self-control, or concern for others. The class reviews some of the standard assumptions made in economics, examines evidence on how human behavior systematically departs from these assumptions and explores alternative models of human decision-making in order to help improve economic analyses. This is Jay Lu’s second time winning this award.  Congratulations!

2017 West Coast Experiments Conference

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Rosa Matzkin

Rosa Matzkin

The tenth annual West Coast Experiments Conference was co-organized by Professor Rodrigo Pinto.

The Conference was held at UCLA on April 24-25, 2017, preceded by in-depth methods training workshops on Sunday, April 23.  The West Coast Experiments Conference is an annual conference that brings together leading scholars and graduate students in economics, political science, and other social sciences who share an interest in causal identification broadly speaking.  Now in its tenth year, the WCE is a venue for methodological instruction and debate over design-based and observational methods for causal inference, both theory and applications.

UCLA Professor Roza Matzkin presented a paper on identification in simulation equation models. The conference was attended by a PhD students and experts, including Nobel Prize winner Angus Deaton and Turing Awards winner Judea Pearl.

 

 

Marek Pycia featured in Reuters

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Today, Marek Pycia‘s paper on UCLA’s voucher system was featured in Reuters. Traditionally, kidney donors directly donate kidneys to their relatives. However, what if the kidney donor is elderly, and the relative does not need the kidney immediately (e.g. they have early stage kidney disease)? Professor Pycia’s paper discusses UCLA’s new voucher system which enables donors to “pay it forward”, donating today in return for a promise that their relative will be at the front of the queue when they need a kidney. The paper is with Jeffrey Veale, a member of UCLA’s Medical School, and other coauthors. It is published in Transplantation and has become the basis for a national system of kidney transplant vouchers used by over twenty transplant centers.

John Asker awarded Lanzillotti antitrust prize.

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John Asker’s award-winning paper  is titled “The Competitive Effects of Information Sharing.” The paper won the ninth annual Robert F. Lanzillotti prize for the best paper in antitrust economics.

The abstract of the paper reads as follows:

 

“We investigate the impact of information sharing between rivals in a dynamic auction with asymmetric information. Firms bid in sequential auctions to obtain inputs. Their inventory of inputs, determined by the results of past auctions, are privately known state variables that determine bidding incentives. The model is analyzed numerically under different information sharing rules. The analysis uses the restricted experience based equilibrium concept of Fershtman and Pakes (2012) which we refine to mitigate multiplicity issues. We find that increased information about competitors’ states increases participation and inventories, as the firms are more able to avoid the intense competition in low inventory states. While average bids are lower, social welfare is unchanged and output is increased. Implications for the posture of antitrust regulation toward information sharing agreements are discussed.”

John Asker wins Antitrust Award

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Professor John Asker was awarded the “Best Antitrust Academic Article in Economics” by the Concurrences Antitrust Writing Awards for his article entitled “Diagnosing Foreclosure due to Exclusive Dealing” published in the Journal of Industrial Economics in September 2016.

The abstract is as follows: Exclusive dealing arrangements, in which a distributor contracts to work exclusively with a single manufacturer, can be efficiency enhancing or they can be an anticompetitive means to foreclose markets. This paper evaluates the effect of exclusive distribution arrangements on competition in the Chicago beer market in 1994. A diagnostic test is provided to judge whether exclusive arrangements between brewers and their distributors lead to foreclosure. To implement this test I estimate a model of consumer demand and firm behavior that incorporates industry details and allows for distribution through exclusive and shared channels. The test indicates that foreclosure effects are not present in this market, suggesting that the most likely effect of intervention would be to reduce social welfare.

Ph.D. Student Placement

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Congratulations to our Ph.D. students for their success in the job market. They will be heading to the following places:

Omer Ali: Analysis Group

Adrien d’Avernas: Stockholm School of Economics

Xue Hu: Amazon

Mat Miller: Amazon

Ruoyao Shi: UC Riverside

Chad Stecher: Rensselaer Polytechnic Institute

Colin Weiss: Federal Reserve Board

Sibo Yan: KPMG

Gabriel Zaourak: World Bank

Andreas Gulyas: University of Mannheim

Lauren Lucido Watkins

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Ever since the 5th grade, Lauren Lucido Watkins knew she wanted to be a Bruin. There was no rhyme or reason, nor strong family legacy ties – Lauren was simply drawn to the prestige that came with the name and the energy that radiated from everyone who spoke about the university. Without ever considering a second option, she accepted her offer and graduated from UCLA in 2011 with a BA in Business Economics and a minor in Accounting.

Lauren Lucido Watkins

Lauren has always been a strategic thinker and natural problem-solver. Lauren attributes her first venture into the realm of strategy and consulting as a core member for the Daily Bruin, first working as an intern, moving to internal advertising sales, and ultimately working as the assistant manager during her junior and senior years. In a time where the technological revolution was on the cusp of breaking through, Lauren and other members of the Daily Bruin were tasked with countering the demise of print paper and shift to online news platforms. While figuring out how to generate revenue beyond print and assessing the internal structure of the Daily Bruin, Lauren realized the importance of aligning your team with your business needs. Without a strong people strategy, she knew that business changes couldn’t follow. Lauren followed her passion, which culminated into an internship in Los Angeles with Deloitte Consulting in their Human Capital practice.

Lauren excelled as a top analyst while at Deloitte. She worked in their organization and talent group for two years before being approached by Christian Dior, who at the time was looking for business-minded candidates to take part in their re-launched management training program. Lauren knew that an opportunity in high fashion may not come again, so she decided to take a leap of faith, recognizing a greater end goal, and leave her job at Deloitte. Within a week, Lauren went from being a consultant advising clients, to working the floor at the Christian Dior Boutique on Rodeo Drive learning all facets of the luxury retail landscape. Such a drastic change in environment is no easy feat. Lauren believes her time spent at UCLA working at the Daily Bruin contributed to her successful transition between two very distinct worlds. She draws parallels between working at the Daily Bruin and her first work experiences at Christian Dior, both times in which she was a part of a group of people whose main focus was working as a team to grow the business in a fast-moving environment.

The Daily Bruin was not Lauren’s only extracurricular activity at UCLA. Lauren is a sister of Kappa Alpha Theta, serving as the Internal Social Chair and VP of Membership, and was the Consulting Director of the Undergraduate Business Society during her senior year. In terms of academics, her favorite class she took while at UCLA was Real Estate Investments, taught in tandem with professors and students from the Anderson School of Management. She has used many of the learnings to assess investments in her own life, including purchasing a home in San Francisco.

Upon transitioning to Christian Dior, Lauren spent one year in Beverly Hills focused on client development strategies and was then promoted to Christian Dior’s New York flagship where she was tasked at driving sales and overseeing the shoe department. Fast-forward to present day and Lauren has scaled the corporate ladder, now the Assistant Boutique Manager for the Christian Dior boutique in San Francisco, which she helped to open last year.

As a lover of high fashion myself, I was keen on hearing about how Lauren acquired such a vast knowledge of the high fashion realm in order to be working at one of the powerhouses in the industry. Her advice was to constantly stay active in obtaining knowledge and keeping an eye on the ever-changing landscape of fashion. I also asked her if there was any advice she wished she could say to her college-self. “Be fearless, take risks, and do [things] you’re passionate about.” Lauren reminded us that unless you put yourself out there, you can never truly reap the rewards from all the opportunities in life.

Written by Katie Kim, Undergraduate

Click here to see more Alumni Interviews.

Recruiting Talent

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Mortiz Meyer-ter-Vehn

The success of most firms is built upon hundreds of individuals who take thousands of decisions, making it critical to identify and recruit the best talent. Such human capital is a key source of competitive advantage in a wide range of industries, from service to technology. For instance, the standing of a university depends more on the quality of its professors than on its real estate. Talent is also critical for consultants, salesmen and firms like Netflix, whose human resource manual states “One outstanding employee gets more done and costs less than two adequate employees. We endeavor to have only outstanding employees”.

Differences in talent across firms perpetuate through hiring because talented managers have better judgment and better information. For example, in academia, a star professor can easily evaluate the quality of an applicant’s research. And, at Netflix, talented managers can use their professional connections to investigate a potential recruit.

Simon Board

Based on these tenets – that talent matters and perpetuates through hiring – professors Simon Board, Moritz Meyer-ter-Vehn, and Tomasz Sadzik propose a new model of firm dynamics in their working paper entitled “Recruiting Talent”. The key contribution of the paper is to place talent at center stage, in comparison to traditional models of firm dynamics that characterize firms through their stock of capital or labor. The resulting model generates persistent differences between firms’ talent, productivity and wages, consistent with the large dispersion found in the empirical literature. A firm’s stock of talent thus gives it an advantage in identifying future talent and provides a sustainable competitive advantage.

Tomasz Sadzik

The first step in the analysis is to show that firms with many talented employees optimally pay high wages and attract the best applicants. Intuitively, skilled recruiters have a comparative advantage in hiring from a high-wage applicant pool with a balance of talented workers, rather than hiring from a low-wage pool in which few talented applicants remain. If firms start off initially similar then, over time, better endowed firms accumulate talent, while the worse endowed hire from poor, deteriorating applicant pools and lose talent. Countering this is the natural regression to mediocrity that results from noise in the hiring process. The economy then converges to a steady state that exhibits persistent heterogeneity in wages, talent and productivity where these two forces offset each other. While low-quality firms could in principle catch up by posting higher wages and hiring more talented workers, it is not profitable for them to do so.

Building on this model, the paper generates a rich set of predictions. An increase in screening skills, say, due to technological innovation, raises the dispersion of wages and the segregation of workers across firms, helping to explain recent trends documented in the empirical literature. The paper also cautions against splurging on “super-stars” for firms that wish to rise in the rankings. The authors show that such a strategy may be a waste of money when the current organization lacks the capabilities to identify the stars of tomorrow; a gradual increase in wages is preferable. Finally, the results show that welfare is increased by policies that reduce wage inequality, lowering the dispersion of talent and the segregation of workers across firms.