
When I say "STEM is for Everyone," I mean it. STEM is not just for people who do STEM - problems that come up in our daily lives can be solved with the techniques we learn by studying STEM. When you hear "economics," don't think "price of wheat in a drought," think "hiring interns."
Here's why. A friend came to me with a problem her organization is having hiring interns. There are 7 divisions in her organization, and it used to be that each division handled intern hiring independently. Too often multiple divisions would end up giving offers to the same candidates, which confused the candidates and made it harder for the divisions to predict yield (that is, the percentage of candidates that will accept offers).
So a couple of years ago they switched to a coordinated hiring process, where each of the divisions would select their preferred candidates and representatives from each of the 7 divisions would sit in a room to resolve any conflicts. But these meetings could get very heated and led to inter-divisional conflicts. So they want to take emotions out of the process and develop a fair system allocate candidates between the divisions.
Economists will recognize this as a matching problem. Matching is a very complex problem - indeed, a matching algorithm was one of the accomplishments that led to the
2012 Nobel Prize in Economic Science for Lloyd Shapley and Alvin Roth. For various reasons, the organization is not going to use candidate preferences in making division assignments, which helps simplify the system to a more traditional resource allocation problem. Drafts, lotteries, and auctions are all mechanisms for allocating scarce resources. Picking the right system will help you get the right interns to the right groups. To figure out which is the right system, you need to understand your objectives and constraints, and how each system handles your situation. After the jump, I go through some of the possible intern assignment systems and their pros and cons.
I should point out that I have not studied either economics or game theory extensively - I find these issues fascinating, but true experts would have a lot more to say about this.