Wednesday, April 17, 2013

When Economists Have an Auction

I just got back from the Berkeley Economics annual skit party. The skit party is combined with an auction to raise money for the Graduate Economics Association. Professor Yuriy Gorodnichenko contributed a very interesting auction item: a promise to pay $500 if Christina Romer or Janet Yellen becomes Fed chair at any time in the future.

The bidding started at $50, and quickly jumped up to $200. I was bidding against Gabriel Chodorow-Reich, a fellow macro student. I chickened out and went silent after he bid $220, so he won. Immediately after, I was kicking myself for not sticking in a little longer. I think Gabe got a heck of a deal-- plus I would just love to be able to say that I had bought this unique asset.

Professor Gorodnichenko (who also swept the awards ceremony tonight, winning the Best Professor and Best Adviser awards) donated another auction item-- a check with the amount drawn from a beta distribution with parameters alpha=3 and beta=2, multiplied by $100. The beta distribution is only nonzero on the unit interval, so the check will have value between $0 and $100. The mean of the beta distribution is alpha/(alpha+beta), so the expected value should be $100 (3/5)=$60. The item went for $50 -- so everyone in the audience must have been risk averse, loss averse, financially illiterate, or liquidity constrained (or some combination, like me.) A bottle of wine from Professor David Card's vineyard was the highest-priced item, going for $240.

The most creative item was donated by grad student Kaushik Krishnan. He collected and printed all of Brad DeLong's "Liveblogging World War II" blog posts and put them into a binder, which he promises to get signed by DeLong next time he's in Berkeley. If I remember right, that went for around $40.

6 comments:

Anonymous said...

Kaushik's item went for way more than 40, but I forgot the final price.

Matthew said...

This is hilarious.

Claudia said...

Fun post...sounds like a great skit party.

I recall a funny moment at one of mine: When the student who was voted 'most likely to succeed in research' was not there to accept, because he was off presenting at a conference. And yes, that student was your advisor, Yuriy.

Liam said...

Sounds like Cal is a lot more fun than Maryland was.

Ken Houghton said...

So someone left a sawbuck on the ground and no one picked it up?

Elira Karaja said...

As I had the check today thought to get back to your post. I won't say the value but that, as I mentioned to Yuriy today, my bid was on the value of the cheque (signed by Yuriy), not on the monetary value of the cheque.
Not sure if others were thinking the same ; )