Tools to allocate medical supplies in a crisis: Cramton, Ockenfels, Roth and Wilson in Nature

Publishing a commentary in Nature is a dizzying process for anyone accustomed to the stately dance of publishing in Economics.  It's fast (in this case the commentary below appeared one month after submission), and the editors play an active role.

Borrow crisis tactics to get COVID-19 supplies to where they are needed
Emergency procedures that keep electricity running and food banks stocked can also keep health workers in protective equipment.
Peter Cramton, Axel Ockenfels, Alvin E. Roth and Robert B. Wilson
Nature 582, 334-336, 11 JUNE 2020 doi: 10.1038/d41586-020-01750-6

We began thinking about what market designers know about addressing shortages in an emergency.  We considered the experience in electricity markets and food banks as potentially relevant.
Here are some of our early notes:

• Selling to the highest bidder isn’t always acceptable in an emergency (repugnance)
• But prices matter, because they help generate new supply and reduce excessive  precautionary demand
• And prices can do some of their work even if just in specialized accounting money, so that we’re not just sending supplies to the wealthiest institutions
• Coordination is needed; centralized clearinghouses can help.
• It would have been useful to have had a sufficiently centralized clearinghouse operating as an ordinary market exchange in normal times, that could go into emergency mode when required (so that new suppliers and demanders would have had an address to go to to take part in newly formed supply chains...)
• Our experience in this regard now (after wave 1 of COVID-19) should inform how we think about these markets in the near future (wave 2, next winter, etc.) and the further future (future pandemic diseases...)
• In some respects Germany may be better poised to take steps towards a centralized clearinghouse than we are in the decentralized U.S., especially given our current political disarray. (But Germany has politics of its own...)
• It will be worthwhile to think more about the design of markets that are robust against emergencies –  so they can transition gracefully from normal to emergency states, and back.

To help Paris, donate blood... later (guest post by Carmen Wang)

Carmen Wang writes:

To help Paris, donate blood... later.

Paris needs blood donations in the aftermath of the Attacks, although not that much more than a typical Saturday (EFS press release). Real shortages, however, are very likely in the upcoming winter and holiday season. Market designers point out that blood donations, with kind intention, can happen at wrong times. Instead, would-be donors can register their names and availability with the blood service, and help later when blood is most needed.

Paris:
Long queues to donate blood everywhere 

EFS (French Blood Service) informing of enough blood supply and asking donors to come back later

Boston in 2013:
Various calls for blood donations after the Boston Marathon Bombing, for example

(Notice the time of this tweet and that of the next tweet)

The American Red Cross politely declining more blood donations

What happened in the two cities are not coincidences.

Similar phenomenon in blood donations has happened during so many disasters like 9/11, Hurricane Katrina, Victoria Bushfire in Australia. In severe cases, it leads to blood, the gift of life, being left expired on the shelf. However, in 'normal' times most countries suffer recurring blood shortages, especially during winter, due to the holiday season and that many regular donors are affected by cold and flu. Particularly this time in Paris, the winter is coming. The blood collected today will expire in a few weeks right at beginning of the winter months. Moreover, donors who donated today, when there is no real blood shortage, will not be able to donate in winter when shortages do occur. We can only donate blood approximately once every 3 months. Blood is so precious, so donate wisely.

The reason why the above phenomenon repeats itself across the world is because blood donations need to follow the demand for blood, but most people do not have the necessary information. In addition, other people's donations also affects the supply of blood in real time, which makes it impossible for an individual donor to decide whether it is a good time to donate blood. In Paris, we do want to help those who are injured in the Attacks, but not all donors need to respond at the same time. Too many donations can quickly lead to wasteful congestion and oversupply, and worse, potentially affect the blood supply immediately afterwards.

The solution is surprisingly simple, which is to set up a blood donation registry. People who want to help now can sign up in a registry, and commit to donate later when a blood shortage does occur. After all, a need for blood anytime is a need for blood. What difference does it make if it occurs during the Paris Attacks, Boston Marathon Bombing, Australia's Victoria Bushfire versus other 'ordinary' times? The blood service, which knows the need for blood at any given time, can contact donors in the registry to meet any excess demand for blood, and maintain an adequate level of blood supply in the long term. With the help of the registry, registered donors can be informed correctly not only when there is a potential shortage in aggregate, but more importantly, when their donations are needed and when others have donated enough. 

So to people in Paris, how about a registry in memory of Paris Attacks? The registry not only helps smooth out supply in disaster times, but also helps donors to stay informed, and donate whenever there is a need in normal times. And to donors anywhere in the world, the need for blood in your local area might be more than that in Paris as today. If you would've helped were you in Paris, maybe someone needs your help right now right around you.

More details, see paperSlonim, Robert, Carmen Wang, and Ellen Garbarino (2014). The Market for Blood. The Journal of Economic Perspectives, 28(2), 177-196.
And two upcoming working papers (inquire authors for more information)Slonim, Robert and Carmen Wang (2015), Market design for altruistic supply: Evidence from the Lab

Garbarino, Ellen, Stephanie Heger, Robert Slonim and Carmen Wang, Redesigning markets for blood donations: A blood donation registry

Crisis response and organization

Companies that manage big facilities like power plants do a certain amount of planning for emergencies, as do local authorities. But when disasters rise beyond a certain level, national leaders become involved. They may of course not have relevant expertise, and may even lack access to relevant information.

The NY Times has a very interesting article about some of the organizational (and organization design) issues that impeded the Japanese response to the nuclear power plant failures that accompanied and amplified the recent earthquake/tsunami disaster: In Nuclear Crisis, Crippling Mistrust

"At this crucial moment, it became clear that a prime minister who had built his career on suspicion of the collusive ties between Japan’s industry and bureaucracy was acting nearly in the dark. He had received a confusing risk analysis from the chief nuclear regulator, a fervently pro-nuclear academic whom aides said Mr. Kan did not trust. He was also wary of the company that operated the plant, given its history of trying to cover up troubles."
...
"At the drama’s heart was an outsider prime minister who saw the need for quick action but whose well-founded mistrust of a system of alliances between powerful plant operators, compliant bureaucrats and sympathetic politicians deprived him of resources he could have used to make better-informed decisions.


"A onetime grass-roots activist, Mr. Kan struggled to manage the nuclear crisis because he felt he could not rely on the very mechanisms established by his predecessors to respond to such a crisis.


"Instead, he turned at the beginning only to a handful of close, overwhelmed advisers who knew little about nuclear plants and who barely exchanged information with the plant’s operator and nuclear regulators. 
...
"Critics and supporters alike said Mr. Kan’s decision to bypass this system, choosing instead to rely on a small circle of trusted advisers with little experience in handling a crisis of this scale, blocked him from grasping the severity of the disaster sooner. Sometimes those advisers did not even know all the resources available to them.


"This includes the existence of a nationwide system of radiation detectors known as the System for Prediction of Environmental Emergency Dose Information, or Speedi. Mr. Terada and other advisers said they did not learn of the system’s existence until March 16, five days into the crisis.


"If they had known earlier, they would have seen Speedi’s early projections that radiation from the Fukushima plant would be blown northwest, said one critic, Hiroshi Kawauchi, a lawmaker in Mr. Kan’s own party. Mr. Kawauchi said that many of the residents around the plant who evacuated went north, on the assumption that winds blew south during winter in that area. That took them directly into the radioactive plume, he said — exposing them to the very radiation that they were fleeing."