Imagine Magazine - Johns Hopkins - November/December 2013 - (Page 4)

in my own words Breaking the Stereotype SUSAN ATHEY, PhD Professor of Economics, Stanford University In her work, Susan Athey uses mathematical methods and tools to make predictions, with applications in areas as diverse as consumer choice, media, industry, and government. In 2007, Athey became the first woman to win the prestigious John Bates Clark Medal in economics, given to the American economist under age 40 who has "made the most significant contribution to economic thought and knowledge." Today, in addition to conducting research and teaching, she holds multiple posts and appointments-among them, chief economist at Microsoft. With power, responsibility In college, I was studying math and computer science when I took a job as a research assistant with an economics professor. Working with him and doing independent research, I discovered how incredibly exciting economics could be. The thing that really stood out for me was the relevance of the work. You could do original mathematical modeling that could have an immediate and real impact on public policy. The first project I worked on in economics came out of a summer job I had working for a company that sold computers to the government. The federal government buys computers using a procurement auction, where firms submit the prices they will charge and the firm with the lowest prices wins the auction. I had observed that the process the government was using was causing problems, because losing bidders could "protest" the award and hold up the contract after the winning firm had already ordered the parts to build the computers. The government would encourage the winning bidder to make a side payment to the protesting firm to go away-thus encouraging something sort of like blackmail. When I told the professor I worked for about it, he showed me how I could use economic models to formalize the problem and prove that the rules around protests and 4 imagine settlements encouraged abuse and could be improved upon. My professor testified before the Senate about the results of this research. The employees of the company I worked for could see what was wrong, but they weren't able to affect change. But a leading economics professor, as an expert, knew how to make the arguments compelling and precise, from both a research and policy perspective, and could actually influence the legal environment. At that moment, I saw how incredibly powerful logic and analysis could be. But I also understood that people might actually make decisions based on my research and that I should choose problems that I thought would lead to an improvement in policy. If you're doing this kind of work, you have to understand from the beginning that it may be used for making important decisions. You have to hold yourself to a high standard through every step of the research process. Changing the rules Lately I've been studying the behavior of advertisers in Internet search advertising auctions. Whenever you do a search on Google or Bing, there's an auction held at that moment to decide which ads are displayed and in what order. There are billions of auctions taking place every month. The advertisers place standing bids that sit in a database waiting to be applied, and the moment a user enters a search, the bids are entered in an auction. I tried to model how advertisers' bidding behavior will respond if you change the rules of the auction a little bit: What would that do to the participation of bidders? What would that do to their bidding strategies? I developed some new theoretical models of search advertising auctions, as well as new statistical models that use data to make predictions. The work is relevant for helping advertisers understand what will affect their ability to reach their customers. It's also relevant in understanding the competition between Google and Bing as major search engines. I like problems that are intellectually interesting, those that I feel people aren't thinking about in the right way. I gravitate toward areas where I can do work that answers a specific question and changes the way people think. Nov/Dec 2013

Table of Contents for the Digital Edition of Imagine Magazine - Johns Hopkins - November/December 2013

In My Own Words
Interested in Econ
The World in Numbers
Reckoning with Randomness
Elliptic Curves
A League of Our Own
More Than Math
Developing Your Numbersense
Where Math Meets Imagination
Selected Opportunities & Resources
Dancing in the Footsteps of My Ancestors
Off the Shelf
Word Wise
Exploring Career Options
Planning Ahead for College
Students Review
Mark Your Calendar
Knossos Game

Imagine Magazine - Johns Hopkins - November/December 2013