Wagaroo update: designing a mechanism to identify responsible sources for pet dogs

In February, Christine Exley, a graduate student in economics at Stanford, introduced us to Wagaroo, a new market for pets, here. Since then, she has developed an interesting new mechanism to screen out puppy mills from her Owner Rehoming Program. Her Owner Rehoming Program is also serving as a substitute for animal shelters for some dogs.   As Wagaroo expands she and her colleagues hope this will help drive down the animal shelter population. (You can hear her in the last link below, a video...)  

She writes:

"Wagaroo makes it easy for people to find dogs from ethical sources.  We only post dogs from the shelters, rescues, responsible breeders, and families needing to rehome their dogs.  Dogs are adopted from the last group via our Owner Rehoming Program, which involves owners who need to find new loving homes for their dogs due to a variety of reasons, such as a death in the family, financial challenges, or having to move.  By using our Owner Rehoming Program, these owners keep their dogs until they find a new family for their dog – that is, they keep their dogs out of animal shelters.

"When we were developing our Owner Rehoming Program, we wanted to develop a system that keeps out puppy mills, places that cruelly mass-produce puppies in horrid conditions.   To do so, we thought of a mechanism that aligns incentives.  To illustrate, lets assume Alice wants to adopt a dog from Bob through our Owner Rehoming Program.   To finalize the adoption, Wagaroo asks Alice to pay a $100 adoption fee to Wagaroo, 50% of which is donated to a local animal shelter.  

"How does this keep out puppy mills?   First, Bob does not receive any money for his dog, so he clearly is not a puppy mill trying to make money by selling dogs.  Since Alice does not want a dog from a puppy mill, we can rely on her to not pay Bob.   Second, Bob wants to avoid problems that can arise when giving away dogs for free, such as them being used in dog fights or other cruel ways.   Because of this, we can rely on Bob making sure Alice pays the adoption fee to Wagaroo. This aligns incentives well, and the system is working wonderfully so far!

"If you would like to support our cause, please join in our crowdfunding campaign on indiegogo. You may also learn more about the economics behind Wagaroo in this video!"