Biological markets--from primates to cleaner wrasses to plants

Evolution as the designer of market exchange between and among members of different species: here's a Bloomberg article about the work of the primatologist Ronald Noe, the mathematical biologist Peter Hammerstein and a variety of other biologists.

The Secret Economic Lives of Animals
Wasps do it, baboons do it. Economics isn’t just a human activity.

"In 1994, Noë and Hammerstein laid out their new theory of biological markets in the journal Behavioral Ecology & Socialbiology. The paper fused the biologists’ different styles: Hammerstein developed the mathematical models, while Noë dug through the scientific literature for evidence from the field. Examples turned up across the animal kingdom. Male scorpion flies offer females a “nuptial gift” of prey before mating. In some species of bird, such as the purple martin, a male will allow another male to occupy part of his territory in exchange for help raising his young. Lycaenid butterfly caterpillars produce a sweet “nectar” whose only purpose is to attract ants, which eat the nectar and protect the caterpillars from predators.
...
"Noë and Hammerstein admit that one of the hardest parts of their theory is to fix quantities and exchange rates; most of the time they can only say how a change in supply and demand will influence an exchange. And they are also careful to draw distinctions between human and biological markets. Animals obviously can’t use currency or sign contracts. And the animal kingdom has no third-party institutions to punish cheaters. Evolution may have produced fish dentists, but it has yet to produce fish lawyers."


Here are my earlier posts about work by Ronald Noe

The accidental experiment with legal prostitution in Rhode Island

A scholarly paper and an easy to read-or-listen-to NPR report recount the period in which indoor prostitution was legal in Rhode Island.

The paper (forthcoming in Review of Economic Studies):

Decriminalizing Indoor Prostitution:Implications for Sexual Violence and Public Health  by Scott Cunningham and Manisha Shah

Abstract:
Most governments in the world, including the United States, prohibit sex work.Given these types of laws rarely change and are fairly uniform across regions, our knowledge about the impact of decriminalizing sex work is largely conjectural.  We exploit the fact that a Rhode Island District Court judge unexpectedly decriminalized indoor sex work to provide causal estimates of the impact of decriminalization on the composition of the sex market, reported rape offenses, and sexually transmit-ted infections.  While decriminalization increases the size of the indoor sex market, reported rape offenses fall by 30 percent and female gonorrhea incidence declines by over 40 percent.
***********

And here's the NPR report and podcast:
Prostitution decriminalized: Rhode Island’s experiment

It's worth reading, with lots of interesting bits, and links.  Here is a section of the transcript that struck me:

"So, what did she and her colleague, Scott Cunningham at Baylor University, find?

The obvious: sex work exploded.

But then, the not so obvious: female gonorrhea rates statewide plummetedduring the overt decriminalization period.

"It goes down by around 40 percent," Shah said. "We spent a lot of time beating up the data and estimating these things in different ways, and we just can't get the results to go away, regardless of what we do, they're there.

A forty percent drop is a big deal in the world of public health. Shah thinks one of the reasons for this positive outcome is that legalization empowered sex workers to say no to riskier sexual behavior. She also wonders if newer people were entering the market and didn't have as big of an STD risk.

Still, perhaps even more surprising than the decrease in gonorrhea was another public health development. Sexual violence, or rapes, dipped dramatically. And this wasn't just amongst sex workers. It was across the board, according to FBI crime reports and jurisdiction level data.

"Reported rape offenses decreased by about 30 percent," Shah said.

That's another big decrease. Shah says, if anything, you'd expect rape to go up as when prostitution is decriminalized, sex workers are more likely to report rapes. She compared this to neighboring states, too. The drop was only in Rhode Island. So she examined other crime data in Rhode Island, like burglaries and murders, to see if there had just been a drop in crime generally.

It didn't match. So what happened?

That, she says is harder to answer. She has a theory, though, in that while she knows for some men rape is about power, "I think the argument that we're making is that that might not be true for all men, and for some, these activities could be substitutes."

In other words, for some men, rape may be just about sex. And if there's a legal and accessible market for it, the number of rapes in a community may go down.

This has not been a popular theory or study. And for many, it challenges the notion that rape is about violence and power, and not sex.

"So I consider myself a feminist, but I think this finding angers a lot of feminists," Shah said. "It is a very controversial idea."

And then there's that other controversial area: could decriminalization fuel sex trafficking and sexual exploitation?

"I definitely worry about that," Shah said. "It's an area that I would love to, to be able to do more with."

Still Shah believes there's no solid evidence yet that decriminalizing prostitution does lead to an increase in trafficking women and forcing them into prostitution.

"There is not good empirical evidence for this either way, and part of that is because it's just very, very hard to collect good data on numbers of human trafficking."

*************
Scott Cunningham has been studying black markets for some time, and I'm a long time fan of his work. Here are some of my earlier posts covering it.

Harry Potter and the Resident Match | ZDoggMD.com

To some medical students, the resident match seems like sorcery. Here's a video for them (and for everyone else who feels that things are not entirely under control in whatever labor market they're in...)






HT: Jacob Leshno

The match for larygology fellowships

In The Laryngoscope"

Perceptions of the laryngology Match: A survey of program directors and recent trainees

Eric J. Formeister, Mark S. Courey and Katherine C. Yung

Version of Record online: 7 AUG 2017 | DOI: 10.1002/lary.26761

• Abstract
• Article
• PDF(182K)
• References

"The Match for laryngology fellowship training was instituted for the 2012/2013 application cycle on a voluntary basis and has been operational since. Twenty-three laryngology fellowship programs are now participating in the Match for the 2017/2018 application cycle.
...
"the Match was created to allow applicants the opportunity to review all programs they were interested in prior to feeling pressure to select a program. This early selection pressure has been referred to as “early and exploding offers” by Niederle and Roth, who cite this as the principal motivating factor that influenced the adoption of a gastroenterology fellowship Match.[2] It also allows program directors time to interview more applicants while mitigating the pressure to provide early offers to the most desirable candidates. In a free-market system without a Match, these pressures tend to create earlier and earlier applicant selection. A match with uniform deadlines allow interview seasons to begin later in the course of a residency program, theoretically increasing the number of interested applicants.[1]
...
"42% of pre-Match trainees interviewed prior to their PGY4 year, compared to 22% in the post-Match cohort. There were statistically significant differences between the number of programs applied to, interview offers received, and interviews attended between the pre-2012 and post-2012 cohort. Trainees in the post-Match cohort applied to, on average, 6.9 programs, received interview offers at 6.5 programs, and attended 5.3 interviews, compared to an average number of 4.2 applications, 3.3 interview offers, and 3.5 interviews attended in those applying prior to institution of the Match
...
"Our results indicate that both applicants and program directors believe that the Match is a positive development for laryngology. However, fellowship directors appear to be more guarded in their support, as evidenced by only one-third agreeing or strongly agreeing that the Match improves their ability to procure the best fellows. Perhaps this is due to cases in which there has been internal selection of excellent candidates via the Match who would have been selected regardless of whether or not a Match program existed. This is supported by the free-text response from one anonymous fellowship director, who stated that a distinct disadvantage of the Match is an inability to internally select a candidate early and then mentor them in laryngology during residency. It is also noteworthy that trainees who applied before adoption of the Match were significantly more likely to support the notion that the Match is a positive development for the specialty (89%), versus only 56% of those who applied after the Match agreeing with this statement. This difference could be reflective of the reported frustrations that accompany the Match process (e.g., more interviews demanding more time and money from applicant to maximize their perceived chances of matching), compared to the theoretical benefits perceived by those earlier trainees who did not apply via this standardized process.

Undoubtedly, a laryngology Match increases the consumption of time, resources, and cost for both fellowship directors and candidates, as the average number of applicants interviewed at each program from pre-Match to post-Match doubled from approximately three to approximately six, and the number of programs applied to, interview offers received, and interviews attended by applicants all increased significantly compared to prior to the Match. Although there is an obvious advantage inherent in the ability to sample more programs (72% of applicants cite this as an advantage) or to interview more applicants (55% of program directors report this as an advantage) prior to deciding, the Match does have the potential to unnecessarily inflate the number of applications and interviews at each program. This is especially true in the case of internally selected candidates, where applying via the Match essentially becomes a formality."

Was air-conditioning a repugnant transaction?

The Atlantic has a story that says air conditioning initially received a chilly reception:
The Moral History of Air-Conditioning
Cooling the air was once seen as sinful. Maybe the idea wasn’t entirely wrong.

"Even into the early 1900s, the U.S. Congress avoided the use of manufactured air in the Capitol, afraid voters would mock them for not being able to sweat like everyone else.

"While adoption of air-conditioning demanded industrial ingenuity, it also required renouncing the vice of cooling the inside air.
...
"Even today, air-conditioning remains controversial. Due to their environmental impact, some advocates call for disuse of these machines. Others accuse the air conditioner of chauvinism, forcing women in the workplace to dress one way inside and another outside. It has become both a symbol of human ingenuity and of weakness, acclimatizing human bodies so that they are less resilient against natural heat without the aid of machines."
***********

HT: Sandro Ambuehl

A tree grows at the Technion

When I was at the Technion this week I visited a tree that I planted in 2013.
Someone has been watering it:

In this picture taken by Maya Bar Hillel, you can see it's a lot bigger than when it was planted: that picture is here:

Sunday, June 23, 2013

"דוקטור לשם כבוד" honorary doctorate at the Technion

13th workshop of Matching in Practice, Aug 28-9 in Brussels

 Here's the preliminary program:

13th workshop of Matching in Practice
August 28 @ 12:00 pm - August 29 @ 2:30 pm
Université Libre de Bruxelles, Avenue Franklin Roosevelt 42, Brussels, 1050 Belgium

Day 1: August 28, 2017

12:15-1:30 pm	Lunch (cafeteria of R42 building, 3rd floor)
1:30 -2:30 pm	Keynote lecture: Invariance and matching outcomes
	Marek Pycia (University of Zurich)
2:30 – 2:45 pm	Coffee break
2:45 – 4:15 pm	Session 1: Choice and school segregation
	“Segregation and school enrolment policies” by Thomas Wouters (KU Leuven)
	“How do restrictive zoning and parental school choices impact social diversity in schools? An empirical evaluation in France” by Béatrice Boutchenik (INSEE) (joint with Pauline Givoir and Olivier Monso)
4:15 – 4:30 pm	Coffee break
4:30 – 6:30 pm	Session 2: Advances in Matching Theory
	“Efficient and essentially stable assignments” by Peter Troyan (University of Virginia) (joint with Andrew Kloosterman)
	“A dOOR to Ordinality in Assignment Problems: Outside Option Robustness” by Antonio Miralles (Universitat Autonoma de Barcelona) (joint with Caterina Calsamiglia)
	“Graduate Admission with Financial Support” by Mustafa Afacan (Sabanci University)
Dinner

Day 2: August 29, 2017

8 :30 – 10:30 am	Session 3: Strategic incentives and actual behavior in matching mechanisms
	“Manipulability and tie-breaking in constrained school choice” by Benoît Decerf (University of Namur) (joint with Martin Van der Linden)
	“Strategic “Mistakes”: Implications for Market Design Research” by Yinghua He (Rice University) (joint with Georgy Artemov and Yeon-Koo Che)
	“Obvious mistakes in a strategically simple college-admission environment” by Sándor Sóvágó (Vrije Universiteit Amsterdam) (joint with Ran Shorrer)
10:30 – 10:45 am	Coffee break
10:45 – 12:15 pm	Session 4: Preference formation
	“What’s in a name? Expectations, heuristics and choice during a period of radical school reform” by Olmo Silva (LSE) (joint with Marco Bertoni and Stephen Gibbons)
	“Early offers and preference formation in college admissions” by Julien Grenet (Paris School of Economics) (joint with Dorothea Kübler and Yinghua He)
12:15 – 12:30 pm	Coffee break
12:30 – 1:30 pm	Policy round table: Transparency and social acceptability of matching mechanisms
	With Peter Biro (Hungarian Academy of Science), Li Chen (University of Gothenburg), somebody involved with current transparency efforts of the French university admission platform (TBC), Jean-Pierre Verhaeghen (LOP Ghent, TBC)
1:30 pm	Lunch and farewell

Scientific Committee

The scientific committee of the 13th workshop of Matching in Practice consisted of Péter Biró, Francis Bloch, Estelle Cantillon and Juan Pereyra.

Kidney cooperatives as a way of recruiting donors?

Here's an article in J. of Health Economics which proposes a novel way of giving monetary compensation to kidney donors, in a way that the authors think might not arouse repugnance. (I think they might underestimate the repugnance in some quarters.)

Solving the kidney shortage via the creation of kidney donation cooperatives
K.C.Eames, Patrick Holder,Eduardo Zambrano
J Health Econ. 2017 July, 54, 91-97. doi: 10.1016/j.jhealeco.2017.04.001. Epub 2017 Apr 18.

"Kidney cooperatives follow a simple set of principles. Patients in need of a kidney donate a set amount of money to the cooperative if they are able to do so, whereas those who need a kidney but are unable to make the requisite monetary donation go on a “waiting list”. Healthy patients donate kidneys to the cooperative, which first allocates kidneys to patients who donated money, then disburses any remaining organs to those on the waitlist. All revenue raised by the cooperative is split equally among the kidney donors, who also receive lifetime “kidney insurance”.

co-operatives

follow

a

simple

set

of

principles.

Patients

in

need

of

a

kidney

donate

a

set

amount

of

money

to

the

co-

operative

if

they

are

able

to

do

so,

whereas

those

who

need

a

kidney

but

are

unable

to

make

the

requisite

monetary

donation

go

on

a

Markets for ivory

National Geographic brings us up to date on American markets for ivory:

Why D.C. Is the New Hub for U.S. Ivory Sales
"As states impose their own bans on ivory to help save elephants, it appears the market is simply shifting to other spots."

"Los Angeles, New York City, and San Francisco have long been the main ivory hubs in the U.S. The surveys conducted for this report, she says, suggest sales have shifted, most likely because California and New York have imposed restrictions on the ivory trade far stronger than regulations in many other states.
...
"Much of the illegal ivory sold in the U.S. is passed off as legal ivory, usually labeled as antique, which is why advocates are eager to close down the legal markets as much as possible.
...
"The sale of ivory across international boundaries has been banned since 1990, but the U.S.—like many countries—has continued to allow people to buy and sell ivory within its borders, subject to certain regulations. The federal government, however, only has the power to regulate trade across state lines, not within states themselves.

"The federal government’s newest regulations, enacted July 2016, were part of a joint agreement with China in which both countries announced to “near-total” bans on their domestic ivory trades in an effort to protect African elephants. The U.S.’s rules limit interstate commercial trade to antiques that are more than a hundred years old. Within states themselves, the federal government only has authority to limit ivory sales to items imported before the international ban in 1990.

"California, Hawaii, Nevada, New Jersey, New York, Oregon, and Washington are the only states with their own ivory trading bans. Since 2015 California, for example, has allowed ivory items to be sold within the state only if they’re more than a hundred years old and composed of less than 5 percent ivory.

...

"As new regulations are implemented, it’s important to keep an eye on where sales are increasing. There’s one place in particular the report identifies: the Internet. (See: Internet Giants Struggle to Keep Ivory Off the Market)."

*************

Speaking of internet sales of ivory, Japan's Rakuten retail site bans ivory sales
"One of Japan's largest online retailers has banned the sale of ivory, closing a major marketplace for the controversial trade."

Global Kidney Exchange: a reply to some skeptics, forthcoming in the AJT

Our recent paper in the American Journal of Transplantation about the first Global Kidney Exchange chain was accompanied by a skeptical editorial, and has now also drawn some letters to the editor.  Our reply is forthcoming, and is now online here:

Global Kidney Exchange: Financially Incompatible Pairs Are Not Transplantable Compatible Pairs
Authors
M. A. Rees, S. Paloyo, A. E. Roth, K. D. Krawiec, O. Ekwenna, C. L. Marsh, A. J. Wenig, T. B. Dunn.   Accepted manuscript online: 31 July 2017

Here is the full text pdf file.

Here are the first sentences and the main paragraph.

"Honest debate makes ideas better; we appreciate our colleagues’ engagement. We agree with Wiseman and Gill that Global Kidney Exchange (GKE) must be conducted in an ethical manner that is sensitive to the possibilities of commodification and exploitation and, that it is important to be both careful with and transparent about how patient-donor pairs are selected from developing countries.1,2 We further agree that GKE should continue to be run in a way that enhances rather than competes with local medical services. However, Wiseman and Gill approached GKE from their American and Canadian perspective of near universal access to healthcare for end stage renal disease. They view GKE through a lens of commodification and exploitation...
...
"Let us be clear: without GKE the Filipino husband was never going to receive his spouse’s kidney. Without GKE, the husband was going to die, the wife was going to lose her spouse, and their son was going to be fatherless. That is exactly how the story was going to end without GKE. The goal of GKE is to change this fate for emotionally-related pairs referred by our medical collaborators in their home country when financial barriers prevent transplantation. Our selection process aims to provide a transplant for every GKE-eligible pair that creates enough savings to pay for a GKE transplant.  It is not scalable to propose that GKE could take place without consideration of the savings produced by transplanting patients in the United States. There are not unlimited philanthropic resources available to overcome the needs of patients facing financial barriers to transplantation. By creating and utilizing a portion of the savings produced by reducing the cost of dialysis in the United States through accelerated access to renal transplantation, GKE becomes scalable. However, the net savings produced by GKE must exceed the overall cost in order for US-based healthcare payers to participate. Thus, if we want to achieve GKE’s first goal: to help impoverished patients by overcoming financial barriers to transplantation, GKE must take account of the savings produced. We have now performed four GKE transplants—all funded by philanthropy. We simply evaluated every patient who presented for evaluation and moved forward with every instance where the projected savings from accelerated transplantation of American incompatible pairs in the Alliance for Paired Donation (APD) pool exceeded the cost of the GKE by an amount greater than the anticipated cost. To scale this concept, we are working to produce an ethical and legal process, built on sound business principles, so that it can scale to help as many rich and poor patients as possible. In this first case, an easy-to-match unsensitized blood type A GKE candidate with a blood type O donor easily produced more transplants/savings in the APD pool than without their participation.  No alternative existed for this Filipino pair and millions more like them.3 GKE did not exploit this Filipino couple—it provided the mechanism for the wife to literally save her husband’s life. They could not afford dialysis. Two months prior to travelling to the US and after their identification and evaluation for participation in GKE, their Filipino physician called to say that if the APD did not pay for the husband’s continued dialysis in the Philippines, that he was going to die as no additional funds were available to pay for dialysis. At a societal level, did American patients with access to dialysis really disproportionally benefit from the APD’s “exploitation” of this patient by paying for two months of dialysis in the Philippines? When the husband lived instead of dying, was the Filipino donor’s kidney really undervalued? We ask Wiseman and Gill to seriously consider whether the Filipino wife feels she disproportionately benefited American patients rather than her own family. For three years on Father’s Day the couple’s child has written our team to thank us for saving his daddy’s life. Two and a half years after this first GKE transplant, both the Filipino donor and recipient have normal renal function, countering the editorial’s accusation that “limited post-transplant care provided to the Filipino recipient were probably inequitable.” While the gratifying success of the first case does not guarantee the same outcome for all future patients, it does demonstrate how GKE—even if inequitable—is able to add years of life to patients who would have died without it."
******

There's a lot more that can be said, and I have an inkling that I'm going to have the opportunity to say a lot more, as there are going to be more critiques and objections.  Issues of repugnance deserve to be taken seriously.  The many positive responses (like this and this from Mexico) that GKE has received gives me cautious hope that we'll be able to move forward in a way that addresses the chief concerns and  commands broad support.  There are lots of families in which someone has kidney failure whose life could be saved by giving them access to a transplant through kidney exchange.
**********
Here are all my posts on Global Kidney Exchange

Organ donation in Israel

The Israeli Ministry of Health has a number of interesting web pages concerning organ transplantation.

Here is the one on the compensation of living donors for related expenses:

Compensating Live Organ Donors

The compensation is given to donors when the donation and transplant surgery is performed in Israel.

For this purpose, the following refunds are given: 

• Refund due to loss of earnings - A sum equivalent to the benefit paid by the National Insurance Institute to a person serving in reserve duty for a period of less than 40 days: minimum NIS 7,841, maximum NIS 57,563 
• Refund of travel expenses - In a standard and set sum of NIS 2,676, with no need to produce receipts.
• Psychological treatment - Refund for 5 treatments to the value of up to NIS 428 per treatment, subject to the presentation of receipts proving that the treatment was performed, and subject to the treatments being conducted within a period of up to 48 months after the donation.
• Recovery leave - Refund for vacation in a hotel for a period of 7 consecutive days at a value of up to NIS 535 per day. Subject to the presentation of receipts and subject to the vacation being taken within a period of up to 90 days after the donation is made.

Insurance refunds

• Private medical insurance or supplementary insurance of healthcare organizations - Refund to the value of up to NIS 59 per month for a period of 60 months, subject to presentation of the policy and receipts proving purchase of the insurance. It is advisable to purchase this insurance before the operation or in the first three months after the operation.
• Loss of working capacity insurance - Refund to the value of up to NIS 203 per month for a period of 60 months, subject to presentation of the policy and receipts proving purchase of the insurance.
• Life insurance - Refund to the value of up to NIS 128 per month for a period of 60 months, subject to presentation of the policy and receipts proving purchase of the insurance.

All of the insurance payments above will be made from the end of the first year of the donation and for 60 months (5 years). Before the end of the first year from the day of donation, the donor will receive a reminder to send the insurance forms, according to the breakdown appearing in the directions and forms for submitter of an application for expenses file.

*********

Here is the page on kidney exchange:

National Exchange Program for Live Kidney Donors

*************

And here's a page on deceased organ donation from the point of view of Jewish religious law:

According to Halacha…

2017 Subjective Probability, Utility and Decision Making (SPUDM 26) at the Technion

I'm on my way to SPUDM26 (The 26th Subjective Probability, Utility, and Decision Making Conference) August 20th-24th 2017, hosted by the Industrial Engineering and Management Faculty of the Technion in Haifa, Israel.

Here's the program.

My talk will be called Repugnant transactions and Forbidden Markets.

I’m planning to talk a bit about repugnant transactions generally, and why I think they are important, and perhaps also about black markets. But I’ll use kidneys as my main example, and some of the repugnance issues we’re encountering as we try to move forward with Global Kidney Exchange, in which we’ll include patient-donor pairs from poor countries in American kidney exchange…

Interview in London's Jewish Chronicle

Wait for this, they have a column called Jewniversity Corner:

Al Roth: Matching the market from dates to organs
In his latest Jewniversity Corner column, David Edmonds examines the theories of economist Al Roth

Notable quote (even though they put the apostrophe in the wrong place): "Born in New York City in 1951, Roth was raised in New York City, in the borough of Queens (which explains why, he told The JC, he speaks the Queen’s English). "

The ASSA / AEA meetings, preliminary program

This year's ASSA preliminary program is now online:  https://www.aeaweb.org/conference/2018/preliminary 
The AEA sessions were organized by President Elect Olivier Blanchard (and his program committee).  David Laibson will give the Ely lecture.

Here are two sessions that caught my eye from just the first page (of 11).

Thursday, Jan. 4, 2018   5:30 PM - 7:00 PM
 Marriott Philadelphia Downtown, Grand Ballroom Salon H
 Econometric Society Presidential Address

Drew Fudenberg, Massachusetts Institute of Technology 

Inner Workings of Organ Markets and Organ Allocation

Paper Session

• Chair: Eric Budish, University of Chicago

The Inner Workings of Kidney Exchange Markets

Nikhil Agarwal

,

Massachusetts Institute of Technology

Itai Ashlagi

,

Stanford University

Eduardo Azevedo

,

University of Pennsylvania

Clayton Featherstone

,

University of Pennsylvania

Omer Karaduman

,

Massachusetts Institute of Technology

Abstract

The market for kidney exchange was created to address the shortage of kidneys for donations. The market allows patients with a willing but incompatible live donor to swap donors, so that they can perform transplants, and has grown to about 800 transplants per year. This paper uses detailed administrative data to describe the functioning of this market. The most striking finding is that the market is fragmented into dozens of small platforms instead of working in a single large platform, with most transactions happening in platforms that operate within a single transplant center. This may lead to substantial inefficiency if there are increasing returns to scale to matching patients in a large, thick market.

A Regulated Market for Kidneys

Mohammad Akbarpour

,

Stanford University

Abstract

The persistent shortage of kidneys for transplantation is a global problem for end-stage renal disease (ESRD) patients. Many countries have tried to address this issue by increasing deceased donation, by introducing kidney exchange programs, and by optimizing the allocation algorithms. Despite such efforts, the problem of shortage is growing in most countries, with more than 100,000 people waiting for a kidney transplant only in the U.S. Iran is the only country in the world that has introduced a different program of living unrelated renal donation, which includes two kinds of monetary compensation of donors: a "gift for altruism" from the government to donors, as well as an additional compensation from the patients themselves. We will discuss the impacts of this program on waiting times, organ shortage, and its equilibrium effects on other kinds of live donation.

Strategic Behavior in the Kidney Waitlist

Nikhil Agarwal

,

Massachusetts Institute of Technology

Itai Ashlagi

,

Stanford University

Paulo J. Somaini

,

Stanford University

Abstract

A transplant can improve a patient's life while saving several hundred thousands of dollars of healthcare expenditures. Organs from deceased donors, like many other common pool resources (e.g. public housing, child-care slots, publicly funded long-term care), are rationed via a waitlist. The efficiency and equity properties of design choices such as penalties for refusing offers or object-type specific lists are not well understood and depend on agent preferences. This paper establishes an empirical framework for analyzing the trade-offs involved in waitlist design and applies it to study the allocation of deceased donor kidneys. We model the decision to accept an offer from a waiting list as an optimal stopping problem and use it to estimate the value of accepting various kidneys. Our estimated values for various kidneys is highly correlated with predicted patient outcomes as measured by life-years from transplantation (LYFT). While some types of donors are preferable for all patients (e.g. young donors), there is substantial heterogeneity in willingness to wait for good donors and also substantial match-specific heterogeneity in values (due to biological similarity). We find that the high willingness to wait for good donors without considering the effects of these decisions on others results in agents being too selective relative to socially optimal. This suggests that mild penalties for refusal (e.g. loss in priority) may improve efficiency. Similarly, the heterogeneity in willingness to wait for young, healthy donors suggests that separate queues by donor quality may increase efficiency by inducing sorting without significantly hurting assignments based on match-specific payoffs.

Discussant(s)

Utku Unver, Boston College

Glen Weyl, Microsoft Research

Benjamin R. Handel, University of California-Berkeley