PARAG PATHAK
http://www.fas.harvard.edu/~ppathak
ppathak@fas.harvard.edu
HARVARD UNIVERSITY
CGOLDIN@HARVARD.EDU
Placement Director: Claudia Goldin
Graduate Student Coordinator: Nicole Tateosian
NATATEOS@FAS.HARVARD.EDU
617-495-3934
617-495-8927
Home Contact Information
221 Norfolk Street, #2
Cambridge, MA 02139
Home phone number: (617) 864 6211
Office Contact Information
420E Baker Library, Harvard Business School
Boston, MA 02163
Cell phone number: (857) 928 3704
Personal Information: DOB: 06/08/1980, Gender: M, Citizenship: USA
Undergraduate Studies:
A.B., Applied Mathematics, Harvard University, Summa cum laude, 2002
Phi Beta Kappa, Thomas T. Hoopes Thesis Prize
Graduate Studies:
S.M., Applied Mathematics, Harvard University, 2002
Ph.D. Candidate, Business Economics, Harvard University, 2003 to present
Thesis Title: “Essays on Market Design”
Expected Completion Date: June 2007
Thesis Committee and References:
Professor Alvin E. Roth (primary advisor)
441 Baker Library, Harvard Business School
(617) 495 5447, Al_Roth@harvard.edu
Professor Gary Chamberlain
Littauer 123, Harvard University
(617) 495 1869, gary_chamberlain@harvard.edu
Professor Drew Fudenberg
Littauer 310, Harvard University
(617) 496 5895, dfudenberg@harvard.edu
Professor Ariel Pakes
Littauer 117, Harvard University
(617) 495 5320, ariel@ariel.fas.harvard.edu
Teaching and Research Fields:
Primary fields: Microeconomic Theory, Public Economics, Applied Econometrics
Secondary fields: Market Design, Industrial Organization, Finance, Experimental Economics
Teaching Experience:
Spring 2004
Game Theory (graduate), Harvard, Professor Attila Ambrus
Fall 2004
International Trade (graduate), Harvard, Professor Elhanan Helpman
Spring 2005
Continuous Time Finance (graduate), Harvard, Professor Robert Merton
Fall 2005
Econometric Methods (graduate), Harvard, Professor Gary Chamberlain
Research Experience and Other Employment:
4/02-9/02
Research Assistant, Prof. Paul Milgrom (Stanford) Putting Auction Theory to Work
6/02-9/02
US Department of Justice, Antitrust, Economic Analysis Group
9/02-6/03
Visiting student, Chateaubriand Fellow, IDEI, Toulouse
Professional Activities
Seminars: International Monetary Fund (Annual Research Conference), November 5, 2004
Conference on Market Design Stanford University, December 5, 2004
AEA Meetings, Market Design Session, Philadelphia, January 7, 2005
Banque de France (Paris) February 5, 2005
Stanford University (lecture to Market Design graduate course), May 26, 2005
Hebrew University Summer School on Market Design, July 11, 2005
Yahoo! Market Design Group, July 14, 2006
Conference co-organizer: Mindich Conference on ``Designing Choice’’ at Harvard, April 6-7, 2006
Honors, Scholarships, and Fellowships:
2003-2006
National Science Foundation Graduate Fellowship
2003-2005
Paul and Daisy Soros Fellowship for New Americans
2005
Spencer Foundation Dissertation Fellowship
2005
Lincoln Institute for Land Economics Fellowship
2005
George Dively Award for Outstanding Pre-Dissertation Research
2006
John R. Meyer Dissertation Fellowship
2006
State Farm Companies Doctoral Dissertation Award
2006
Q-Group Research Grant: “Short Sales Constraints”
2006
GIC Award for Excellence in Teaching Economics
Publications:
“Short Interest, Institutional Ownership and Stock Returns” (with Paul Asquith and Jay Ritter), Journal
of Financial Economics, 78, pp. 243-276, 2005.
“The New York City High School Match’’ (with Atila Abdulkadiroğlu and Alvin Roth), American
Economic Review, Papers and Proceedings, pp. 364-367, 2005.
“The Boston Public School Match’’ (with Atila Abdulkadiroglu, Alvin Roth, and Tayfun Sönmez),
American Economic Review, Papers and Proceedings, pp. 368-371, 2005.
“The Dynamics of Open Source Contributors’’ (with Josh Lerner and Jean Tirole), American Economic
Review, Papers and Proceedings, pp. 114-118, 2006.
Research Papers:
“Lotteries in Student Assignment” (Job Market Paper)
Public school choice plans across the United States use lotteries to make assignments. Motivated by
design issues in the New York City High School match, this paper compares lotteries in the allocation
of school seats. The first mechanism, random serial dictatorship, is based on a single lottery: it selects
an ordering from a given distribution and assigns the first student her top choice, the second student
his top choice among available schools, and so on. The second mechanism, top trading cycles with
random priority, is based on lotteries for each school: it selects an ordering from a given distribution
and sets that order as the priority for the first school, selects another ordering from the same
distribution and sets it as the priority for the second school, and so on. Then the mechanism finds an
assignment in the induced market with these priorities using top trading cycles, where cycles form
when each student points to the school she desires the most among available schools and each student
points to the student in the market who receives the highest priority at that school. This paper shows
that a random serial dictatorship is equivalent to top trading cycles with random priority.
“Incentives and Stability in Large Two-Sided Matching Markets” (with Fuhito Kojima)
The paper analyzes the scope for manipulation in many-to-one matching markets (college admission
problems) under the student optimal stable mechanism when the number of participants is large and
the length of the preference list is bounded. Under a mild independence assumption on the distribution
of preferences for students, the fraction of colleges that have incentives to misrepresent their
preferences approaches zero as the market becomes large. We show that truthful reporting is an
approximate equilibrium under the student optimal stable mechanism in large markets that are
sufficiently thick, a condition that allows for certain types of heterogeneity in the distribution of
student preferences.
“Leveling the Playing Field: Sincere and Sophisticated Players in the Boston Mechanism” (with Tayfun
Sönmez)
Empirical and experimental evidence suggests different levels of sophistication among families in the
Boston Public School (BPS) student assignment plan. In this paper, we analyze the Nash equilibria of
the preference revelation game induced by the Boston mechanism when there are two types of players.
Sincere players are restricted to report their true preferences, while sophisticated players play a best
response. The set of Nash equilibrium outcomes is characterized in terms of the set of stable
matchings of an economy with a modified priority structure, where sincere students lose their priority
to sophisticated students. While there are multiple equilibrium outcomes, a sincere student receives the
same assignment in all equilibria. Finally, the assignment of any sophisticated student under the
Pareto-dominant Nash equilibrium of the Boston mechanism is weakly preferred to her assignment
under the student-optimal stable mechanism, which was recently adopted by BPS for use in 2006.
“Strategy-proofness versus Efficiency in Matching with Indifferences: Redesigning the NYC High
School Match’’ (with Atila Abdulkadiroğlu and Alvin Roth)
The design of the New York City (NYC) High School match involved tradeoffs between incentives
and efficiency, because some schools are strategic players that rank students in order of preferences,
while others order them into big priority classes. Therefore it is desirable for a matching mechanism
to produce stable matchings (to avoid giving the strategic players incentives to circumvent the match),
but it is also necessary to use tie-breaking for schools whose capacity is sufficient to accommodate
some but not all students of a given priority. We analyze a model that encompasses one-sided and
two-sided matching models, and study the set of stable matchings as well as the set of student-optimal
matchings. Our main result is that a student-proposing deferred acceptance mechanism that breaks
indifferences the same way at every school’s preference relation is not dominated by any other
strategy-proof mechanism. That is, from the point of view of students, any mechanism that Pareto
dominates a fixed tie breaking deferred acceptance algorithm cannot be strategyproof. Finally, using
data from the recent redesign of the NYC High School match, we document that the extent of potential
efficiency loss is substantial, about 10% of assigned students could have improved their assignment in
a (non strategy-proof) student optimal mechanism, if the same student preferences would have been
revealed.
“Changing the Boston School Choice Mechanism: Strategyproofness as Equal Access” (with Atila
Abdulkadiroğlu, Alvin Roth, and Tayfun Sönmez)
In July 2005 the Boston School Committee voted to replace the existing Boston school choice
mechanism with a deferred acceptance mechanism that simplifies the strategic choices facing parents.
This paper presents the empirical case against the previous Boston mechanism, a priority matching
mechanism, and the case in favor of the change to a strategy-proof mechanism. We present evidence
both of sophisticated strategic behavior among some parents, and of unsophisticated strategic behavior
by others. We find evidence that some parents pay close attention to the capacity constraints of
different schools, while others appear not to. In particular, we identify a certain kind of mistake that
can be observed in the data without knowing the true preferences of a family. Families that make this
mistake are disproportionately unassigned, and in many cases they would have been assigned but for
the mistake. This interaction between sophisticated and unsophisticated players identifies a new
rationale for strategy-proof mechanisms based on fairness, and was a critical argument in Boston’s
decision to change the mechanism.
“Cooperation over Finite Horizons: Theory and Experiments” (with Attila Ambrus)
This paper proposes a theory of cooperation over finite horizons, focusing on public good contribution
games, that implies the broadly documented feature of decreasing cooperation over time. The central
assumption is that there are two types of players: those who only care about their own material
payoffs, and those who reciprocate others’ contributions. The main result is that if reciprocity
functions satisfy some regularity conditions, then generically there is a unique perfect equilibrium, in
which contributions are decreasing. In this equilibrium, selfish players contribute to induce subsequent
contributions by reciprocal players, and this incentive diminishes as the end of the play approaches.
The model explains the puzzling restart effect and is consistent with various other empirical findings.
In one-shot games, the model predicts no contributions. We also report the results of a series of
experiments, using a probabilistic continuation design in which after each round, the game is restarted
with low probability. The results support the implications of our model that the restart effect is present
even with experienced players, whereas, in one-shot games, contributions disappear with experience.
We show that experienced players correctly foresee the pattern of contributions, suggesting that the
declining pattern comes from equilibrium play. We also identify the presence of conditional
reciprocity among experienced players, and document that selfish players (identified exogenously)
stop contributing earlier than reciprocal players, as implied by the model.
“Speculative Attacks and Risk Management” (with Jean Tirole)
The paper builds a simple, micro-founded model of exchange rate management, speculative attacks,
and exchange rate determination. The country may defend a peg in an attempt to signal a strong
currency and thereby boost the government's future re-election prospects or attract foreign capital. The
paper relates the size of the speculative attack and government's defense strategy to the market's prior
beliefs about the strength of the currency, the ability of foreign speculators to short sell the currency,
domestic politics, and initial debt composition. Speculative activities can exhibit strategic
complementarity or substitutability. Finally, features of original sin covary with the maintenance of
pegs, as letting residents hedge the currency or incentivizing them to lengthen their debt maturity
structure is an admission that the currency is overvalued and undoes the signal sent by defending the
currency.
Research Paper(s) in Progress
Lotteries in the Transfers Problem: Designing an Appeals Process in NYC
The Demand for High School in New York City (with Atila Abdulkadiroğlu)
The Equity Lending Market (with Paul Asquith and Andrea Au)
The Demand for Housing in Greater Boston