Market design courses this Fall at Harvard and MIT

In a sign that market design is taking root, there are four relevant courses being offered this Fall along the banks of the Charles. (Some are planned for the Spring as well, Susan Athey will offer one at Harvard and Tayfun Sonmez will offer another at Boston College) . The Fall offerings I know of are the following.

Hanna Halaburda at HBS will teach “Economics and Strategy for Market Intermediaries and Two-Sided Platforms” (Wednesdays, 9-noon).
The main topics of the course are market intermediaries, two-sided markets, and the impact of network effects on the competitive environment. The course will combine formal economic analysis --- using theoretical models --- with case study discussions focusing on strategic considerations that companies in two-sided markets face (e.g. in on-line dating market or e-commerce).

David Parkes in SEAS will lead a seminar, CS 286r: Topics at the Interface between Computer Science and Economics Assignment, Matching and Dymamics
Monday, Wednesday 1-2.30 PM "Recent years have seen an explosion of computer-mediated markets, exchanges, and mechanisms for assignment and production. Problems of preference elicitation and optimization are coupled with concerns for incentive compatibility so that participantscannot manipulate the outcome of a mechanism in their favor. Related challenges include promoting appropriate levels of effort by participants in competition platforms, and preventing transaction failure by unreputable participants in peer production systems. Example domains span from sponsored search, to auction platforms such as eBay, to competition platforms such as TopCoder, to matching programs for medical residents and high schools, to kidney exchanges (without money)." He writes "economists are very welcome ..."

Parag Pathak at MIT will teach Topics in Game Theory, MW4-5.30 (BEGINS OCT 26) (E51-385) He writes "the course will cover advanced topics in matching, auction theory and mechanism design, with an emphasis towards areas of recent research."

Peter Coles and I will be teaching Market Design.
Economics 2056a/HBS 4150
Littauer Center M-16 Meeting Time: F., 9-12 (First meeting Friday, Sept 4)
The course "Deals with the theory and practice of market design, with prominent examples drawn from auctions, labor markets, school choice, and kidney exchange. " Here is the Syllabus, Fall 2009 (still a work in progress).

This course has been evolving since I first taught it with Paul Milgrom, and then with Estelle Cantillon. Some alumni of the course (some of whom took it as undergrads) who are presently active in market design and/or matching are Muriel Niederle, John Asker, Nicole Immorlica, Mohammad Mahdian, Michael Ostrovsky, Parag Pathak, Fuhito Kojima, Robin Lee, Mihai Manea, and Eric Budish.

Health insurance and incentive compatibility

A widely linked post, called Unconscionable Math by the blogger known as Taunter discusses why health insurance companies don't try hard to check the facts on insurance applications. (They only check your application for fraud, he claims, when you get sick enough to make really big insurance claims, and then they may be able to decline to pay if they can make the fraud claim stick.)

He draws the analogy to Las Vegas casinos, which he says don't check that gamblers are of legal age unless they win big:

"Years ago I was walking a casino floor with a casino executive. It was an incredibly detailed tour, and we got to talking about pretty much everything that came to mind about crowds and gaming. Now, a clever observer might notice that even the tolerant people of Nevada will not allow alcohol in vending machines – wouldn’t want the little ones to be able to get a Bud Light without a human being verifying their ID. But there we were in the middle of acres of blinking lights, with absolutely no one making sure that underage kids weren’t walking up to a slot machine. Indeed, they don’t card for the table games.
The executive told me you are free to play if you are underage, you just aren’t free to win. You can sit down and pump your money into the slots, and if you look presentable you can drop some chips on blackjack or craps. However, if you should happen to start winning, the pit boss or security team will come over and check your ID. The house edge is 100%."

So...be careful with those insurance applications.

Misc. organ transplant links

The links below, which I collected over some time but never turned into blog posts, all have something interesting to say about transplantation.

Should We Legalize the Market for Human Organs? An NPR debate among Sally Satel, Amy Friedman, and Lloyd Cohen (arguing for), and James Childress, Frank Delmonico, and David Rothman (arguing against).

Lingering myths discourage organ donation from American Medical News:
"Only 38% of licensed drivers have joined their states' organ donor registries, with many deterred by long-held misconceptions about how the transplant system works, according to poll results released in April."

Organ donations decline with economy from the Miami Herald.
The numbers of organ donors is down, and experts say one reason may be the recession. But "Because of legislative action, Floridians starting in July will be able to register online to be an organ donor at donatelifeflorida.org ."

In the Kidney Trade: Seller Beware
"Need a kidney? You may be able to buy one in Pakistan, which has become one of the world’s largest “kidney bazaars,” according to an article published in the May-June issue of The Hastings Center Report, a bioethics journal.
But who sells their kidneys, and what becomes of these people afterwards? The article, by two doctors and a psychologist from Karachi, paints an ugly picture of the kidney business and challenges the argument made by some that selling organs is a great financial boon to the poor and that they are grateful for the chance to do it. "

A Better Way to Get a Kidney Daniel Rose in a NY Times OpEd proposes we shift to "opt out" for deceased donors.

National Paired Donation Network (Steve Woodle) does an exchange in Pittsburgh: Kidney exchange benefits boy, 5, and woman

Larissa MacFarquhar: Paying for Kidneys
Megan McArdle: Department of Bizarre Arguments

"Exploitation" of the Poor is a Poor Reason to Ban Organ Markets from the Volokh Conspiracy

Milford men take part in four-way kidney swap (when we helped start NEPKE, only pairwise exchanges were initially feasible, but NEPKE became a pioneer in including 3- and 4-way exchanges in its optimization algorithm...)


Britain's only saviour sibling twins: At the age of two, little do they know it but Amy and Anthony Maguire are Britain's only 'saviour sibling' twins, created to be donors for their sick older brother.
Bone marrow donation requires a perfect match.
"The twins were born after IVF treatment was used to select embryos which are a match for their brother Connor so that blood taken from their umbilical cord at birth may one day be used to offer him life-saving treatment."

Organ donation to get halachic approval
A uniquely Israeli obstacle to organ donation wends its way towards resolution:
"Chief Rabbinate tries to encourage religious public to become organ donors by resolving halachic quandaries surrounding process, issuing special donor card "

Public call for organ donations (China Daily), and
China Announces Voluntary Organ Donor System (NY Times)
CD: "China launched a national organ donation system yesterday in a bid to gradually shake off its long-time dependence on executed prisoners as a major source of organs for transplants and as part of efforts to crack down on organ trafficking."...
"Currently about one million people in China need organ transplants each year while only 1 percent receive one, official statistics show.
Only about 130 people on the mainland have signed up to donate their organs since 2003, according to research on the promotion of organ donation after death by professor Chen Zhonghua with the Institute of Organ Transplantation of Tongji Hospital."...
"China issued an organ transplant law in 2007 that bans organ trafficking and only allows donations from living people to blood relatives and spouses, plus someone considered "emotionally connected."
However, organ middlemen have been faking documents in order to make a person who is desperately in need of money be considered "emotionally connected" to the recipients, reports said.
Living transplants increased to 40 percent of total transplants from 15 percent in 2006, Chen Zhonghua said.
"That's one of the daunting tasks facing us as we try to end the organ trade by establishing this system," Huang noted.
Other goals include preventing organ tourism, improving transplant quality, better defining donors' rights and satisfying patients' needs for transplants in an ethical manner."

NYT: "At least one million people in China need organ transplants each year, but only about 10,000 receive them, according to government statistics. Dr. Huang said that most of those organs — as high as 65 percent, by some estimates — are taken from death row inmates after their executions."...
"The practice of harvesting organs from executed Chinese convicts has been widely reported in the past, although it was only confirmed in 2005, by Dr. Huang, at a medical conference in Manila. The government has routinely denied other allegations that prisoners’ organs regularly found their way to the black market, often for sale to wealthy foreigners, and that executions were sometimes scheduled to coincide with the need for a specific organ.
At a news conference in Shanghai held Wednesday to unveil the new organ-donation system, one transplant surgeon was quoted by the newspaper as saying that the taking of organs from convicts was sometimes subject to corruption. "

Made in the USA, but also sold in Canada

We're advised to "think locally and act globally," and the product labels on my new shoes illustrate some of the tension between those mandates.

This label strikes a balance between the wish to be local (and sell to those Americans who prefer to "buy American"), and the wish to be global (and to sell in Canada, where the labelling laws require two languages). And the issue isn't that Canadians are (North) Americans too:

So, I'm happy to show my Solidaire des Travailleurs Americains, whose products, Fabrique aux Etats-Unis, compete in the fairly free global marketplace.

Further unraveling of pool chair reservations

Germans can now grab poolside chairs even earlier

"The German arm of Thomas Cook, Europe's second largest travel company, has been deluged with inquiries since announcing that holidaymakers at nine hotels in Turkey, Egypt and the Canary Islands can book recliners in advance for a fee.
Germans are famous around Europe for rising early to reserve recliners near the pool with their towels, and then going back to bed or eating a lengthy breakfast.
This often annoys tourists from other nations, but they will be unable to take advantage of the new service -- it is valid only for tourists booking their trips from Germany, Mathias Brandes, head of communications at Thomas Cook in Germany, said."

HT: Scott Kominers

Matchmaking for pet dogs in India

The New York Times reports on an emerging problem of dogs owned by the Indian middle class: Matchmaking in India: Canine Division

"“When a customer goes and buys a dog, 99 percent go for a male, and down the road when they need a mate, they face a problem,” Mr. Chopra said.
He tried his hand at pet matchmaking, linking males and females of the same breeds, but it was simply impossible to find matches. Most of the females remain with breeders, he said, who prefer professional stud dogs. This also helps keep the supply of popular breeds tight — if people cannot breed dogs in their backyard they cannot cut into breeders’ profits."

Dog fighting

Here's a Texas story about an undercover police operation--with the undercover policemen hosting a number of fights--that led to many arrests for conducting dog fights. After the arrests, the fighting dogs were put down. So it's a story about repugnant transactions, from several points of view...

Bringing Down the Dogmen: How a pair of undercover cops infiltrated the secret world of Houston dogfighting.

"For centuries, dogfighting was perfectly legal. In Rome’s Colosseum, gladiator dogs were pitted against one another or against other animals, including wild elephants. One of the more popular forms of entertainment in twelfth-century England was “baiting,” in which fighting dogs would be released into a ring with chained bulls and bears. In the colonial United States dogfights were common, and they continued well into the nineteenth century, with formal rules and sanctioned referees. As recently as 1881, the Ohio and Mississippi Railroad advertised special fares to a dogfight in Louisville, Kentucky.
Eventually, because of protests by such groups as the American Society for the Prevention of Cruelty to Animals, states began passing legislation that banned dogfights. By the thirties, dogfighting had been driven almost completely underground. Nevertheless, it remained a culturally ingrained phenomenon that simply refused to go away—a fact that became all too clear when Michael Vick, the quarterback of the Atlanta Falcons, was indicted by a grand jury in July 2007 for operating a dogfighting ring on his Virginia farm and later sentenced to two years in prison. The vast majority of Americans were stunned. Why, they wanted to know, would a young multimillionaire celebrity risk everything to engage in what they regarded as a barbaric practice?"

Here's an earlier post.

Update: the article is now gated (it wasn't when I read it). Here is an ungated followup article by the same author: Fight Club. Here is a followup by a different author: What Texas Monthly left out about 'bringing down the dogmen'

The education business: Stanley H. Kaplan R.I.P.

Education isn't a marketplace that supports only schools; it also supports test making companies, and test preparation companies. The founder of the big SAT prep company just passed away: here's an obit from the Chicago Trib. Stanley H. Kaplan, 1919-2009: Founded popular test-prep company.

The Atlantic has this to say. Stanley H. Kaplan's Legacy.

The Chronicle of Higher Ed's story contains this: "And as his business grew, all sorts of other commercial educational interests began to expand their influence on the academy. Today, the higher-education industry includes not only giant for-profit institutions like DeVry University, the University of Phoenix, and the degree-granting colleges of Kaplan itself, but also course-management companies like Blackboard Inc. and eCollege, distance-learning outsourcers like Higher Ed Holdings, and student-coaching and tutoring companies like Inside Track and Smartthinking."

The sending and transmitting and facilitating of signals is a big business, in college admissions as elsewhere. (Indeed, there's a big part of economic theory that looks on a college education itself as a costly signal sent by the teachable...)

Coming of Road Rage in Samoa

Unless the government backs down, Samoa will change from driving on the right to driving on the left (British Commonwealth style) on September 7:

Shifting the Right of Way to the Left Leaves Some Samoans Feeling Wronged
Government Calls Traffic-Rule Switch 'Common Sense,' but It Sparks Road Rage.

This is one of those cases in which it clearly helps everyone to have a clear rule about which side of the road to drive on, and a little government regulation (and even inter-government coordination) can promote efficient traffic flow. (Think of the congestion at the borders at which you had to switch from driving on one side to driving on the other.)

But it isn't obvious that there's a "right" side, especially since Samoa is an island, and doesn't have to coordinate with anyone who can drive to Samoa from somewhere else. (The last country in continental Europe to switch sides--from driving on the left to driving on the right--was Sweden, in 1967.) Here's a nicely written historical account (whose accuracy I can't vouch for): Why do some countries drive on the right and others on the left ?

(I particularly liked their description of the decision in Pakistan: "Pakistan also considered changing to the right in the 1960s, but ultimately decided not to do it. The main argument against the shift was that camel trains often drove through the night while their drivers were dozing. The difficulty in teaching old camels new tricks was decisive in forcing Pakistan to reject the change.")

The government of Samoa believes that the benefits of switching will come from enabling Samoans to buy used cars from the left-driving Australians and New Zealanders.

But the proposal to switch sides is not without costs, since the current stock of cars has the driver sitting on the left, which will make some things (like passing) harder if traffic is switched to the left side of the road. (And of course the current stock of school buses will have to load and unload children from the middle of the street, instead of from the curb.)

It looks like September 7 might be a good day to avoid the roads, if you happen to be in Samoa. (And here's an earlier post on New Zealand traffic rules .)
*********

Update: Samoa switches smoothly to driving on the left
"Samoa is the first country in decades to change the direction of traffic. Iceland and Sweden did it in the 1960s, and Nigeria, Ghana and Yemen did it in the 1970s."

Ecclesiastical Insurance

Before you read this post, what do you think Ecclesiastical Insurance insures against? (It turns out to have more to do with hot lead than with lost souls...)



The Church of England is under attack, and not just from the usual schismatics. Here's the story: Church of England fights fiddlers on the roof


"THE Church of England is using nanotechnology – the science of very small things – to fight thieves who strip lead and other valuable metals from the roofs of its ancient buildings.
More than 30,000 of Britain’s 44,000 churches have had their roofs coated in a layer of “nanopaint”, which is visible only under ultraviolet light.
Each church has a different blend of microscopic particles, giving its metal a unique “label”. This enables police to identify church lead found in any haul of suspect scrap, even if it has been melted down."
...
"Recently, church authorities scored a victory in the battle against thieves with the conviction of three men for stealing lead from the roof of St Leonard’s church in Colchester, Essex.
They were caught after police identified the lead stolen from the church on sale at a scrapyard by using the new labelling system."
...
"The number of insurance claims for metal thefts from churches has risen from just 12 in 2002 to more than 2,500 last year – attacks described by Peter Walley, chaplain to the bishop of Lichfield, as “the biggest asset-stripping of churches since the dissolution of the monasteries”."
...
"The demand for scrap is driven by world prices. Those for lead and copper soared to record levels last year with scrap lead peaking at £1,300 a ton. Metal prices fell when the recession hit, but are now picking up again strongly.
Most churches are insured by Ecclesiastical Insurance, which is so concerned at the losses that it recently sent every church a SmartWater kit and warned vicars and bishops it would pay out no more than £5,000 if they failed to use it on their roofs.
A spokesman for Ecclesiastical Insurance said metal theft had become the number one reason for claims. "

What if they ran an auction and nobody came?

David Fahrenthold writes in the Washington Post about Maryland's unsuccessful attempt to buy back some crab fishing licenses via an auction:
To Some Chesapeake Crabbers, a $50 Document Is Priceless
"Despite Industry's Woes, Many Watermen Refuse to Sell Symbol of Old Way of Life"

Apparently the licenses have value even to those who don't currently use them to catch crabs. The right to take crabs is what makes you a waterman...

Investing in law suits

"To press a suit" means something different to a tailor and to a lawyer. Now investors are getting involved too.

Investing in Lawsuits, for a Share of the Awards
"A small but growing number of investors are exploring this idea, helping companies avoid some of the risks and costs of litigation in exchange for part of any money paid out when the case is settled or resolved by a court."

This reflects some broader changes in the law biz, somewhat related to developments in patent and class action law.

Regarding patents, firms that invest in patents with an eye towards making money from infringement law suits are known by those who dislike them as patent trolls (see here, too). There is both an offensive and a defensive part of that business, and both attract investors, see e.g. Trolling for Patents to Fight Patent Trolls.

Another kind of lawsuits that involve investors are class action suits. Here the investors are often a consortium of law firms that can pool otherwise unbillable hours to devote to a large speculative project that will only pay off in case of a favorable decision or settlement. The theory behind class action is that it should allow the law to bear on malefactors who might harm many people, but each too little to justify the expense of an individual lawsuit. (E.g. a supermarket chain that systematically overcharged everyone twelve cents might eventually be found liable to pay damages to a large class of consumers. If you noticed them doing this, you wouldn't be able to interest a law firm in representing you as an individual plaintiff, but might be able to interest a firm in representing the whole class.) Class action law envisions the firms as responding to claims presented by plaintiffs, and a plaintiff who claims harm is needed to bring the case. But there's a big advantage to being the first firm (or consortium) to bring a class action law suit, since the originating law firms get to represent the whole class of plaintiffs. So there's a temptation for an entrepreneurial firm to go out and hire some plaintiffs, which is against the law. One of the biggest class action firms fell to this temptation: Class-Action Firm Agrees to Pay $75 Million to Settle Kickback Case

HT: Benjamin Kay, an econ grad student at UCSD

Automated spam blog detection

Woke up this morning to find this on my blog dashboard:

"This blog has been locked due to possible Blogger Terms of Service violations. You may not publish new posts until your blog is reviewed and unlocked.
This blog will be deleted within 20 days unless you request a review."

And this in my email:
"Your blog at: http://marketdesigner.blogspot.com/ has been identified as a potential spam blog. To correct this, please request a review by filling out the form at http://www.blogger.com/unlock-blog.g?lockedBlogID=4748060798655400108

Your blog will be deleted in 20 days if it isn't reviewed, and your readers will see a warning page during this time. After we receive your request, we'll review your blog and unlock it within two business days. Once we have reviewed and determined your blog is not spam, the blog will be unlocked and the message in your Blogger dashboard will no longer be displayed. If this blog doesn't belong to you, you don't have to do anything, and any other blogs you may have won't be affected.

We find spam by using an automated classifier. Automatic spam detection is inherently fuzzy, and occasionally a blog like yours is flagged incorrectly. We sincerely apologize for this error. By using this kind of system, however, we can dedicate more storage, bandwidth, and engineering resources to bloggers like you instead of to spammers. For more information, please see Blogger Help: http://help.blogger.com/bin/answer.py?answer=42577

Thank you for your understanding and for your help with our spam-fighting efforts.

Sincerely,

The Blogger Team"

Let's see if I can publish this. (Update: it looks like I can still publish, but have to interpret a captcha to show I'm probably human...)

Further update: how could Google's automatic spam blog detector be improved? Well, Google offers a lot of tools for reading blogs. Some fraction of my regular readers apparently read Market Design on Google Reader, since it reports 858 subscribers when I checked just now. (You can check too, or subscribe, by going to Google Reader and typing "market design" after clicking on the + box next to "add a subscription." You aren't committed at that point, but you can see the feed, and the number...)

So, a thought for the humans who program the automatic spam detector: check if spam blogs have fewer subscribers than real blogs, and, if so, include that in the next version of the algorithm.

Identifying desirable spouses

Empirical researchers who use matching models to study matching markets such as marriage are often faced with the difficulty that they can observe the results of the market--e.g. who marries whom--but not the intermediate choices that produced these matches (such as who courted whom, who proposed and was rejected, etc.). One approach is to look for particular markets in which such additional data can be found (as in these studies in India, the U.S., and Korea). Another is to develop statistical tools to infer the missing data, e.g. about the preferences of men and women, from the readily observable outcomes.

A NBER working paper that takes this latter approach is Identification in Matching Games, by Jeremy T. Fox - http://papers.nber.org/papers/W15092.

Here's the first paragraph from the introduction:
"Matching games are a new and important area of empirical interest. Consider the classic example of marriage. A researcher may have data on a set of marriages in each of a set of independent matching markets, say a set of towns. The researcher observes characteristics of each man and each woman in each town, as well as the sets of marriages that occurred. The researcher observes equilibrium outcomes, here marriages, and not choice sets, so identification in this type of model will not be able to rely trivially on the analysis of single-agent demand models. What type of parameters can be identified from these data?"

And here's the formal abstract:
Abstract: I study a many-to-many, two-sided, transferable-utility matching game. Consider data on matches or relationships between agents but not on the choice set of each agent. I investigate what economic parameters can be learned from data on equilibrium matches and agent characteristics. Features of a production function, which gives the surplus from a match, are nonparametrically identified. In particular, the ratios of complementarities from multiple pairs of inputs are identified. Also, the ordering of production levels is identified.

The market for bulk commodity shipments

The transport of bulk commodities by sea is a business that depends on matching loads to ships. When times are good, ships may be fully booked, and costly, and when times are bad ships may be available and cheap.

"The Baltic Exchange is an association of ship owners, and has a long and colorful history. Because shipping prices are an indicator of the general economy, the Baltic Exchange Dry Index, which measures the cost of hiring a big ship, is a leading indicator of commodities trading in particular and of economic activity in general.

As recently adjusted, the components of the index are indices for different kinds of shipping, in order of cargo capacity: Capesize (too big to transit the Suez canal, so have to go around), Panamax (the maximum size ship that can go through the Panama canal), Supramax, and Handysize.

Hotel rooms and discounts

I just received an ad by email for a prizewinning hotel in Boston. When I went to their website, I found that their seasonal room rate for a weekday in late September for two adults is $285.00 Their site also makes it easy to check the special rates they give to those who are members of the AAA, AARP, and the U.S. Government. For the same day and same room, those rates were, when I checked, respectively, $355.50, $355.50, and $306.00 . Gotta love that government discount.

Factoring

If you do a google search on "factoring," the first few organic results are on factoring numbers, but the ads are all about factoring receivables. Factors (in this sense of the word) are firms that lend cash to businesses, on the strength of their accounts receivable. It used to be (and still largely is) a relationship business; one factor would handle all of a firm's receivables.

The Street.Com has an article on the new face on the block, The Receivables Exchange , which is set up around the idea of letting firms borrow from individual investors on the strength of particular accounts receivable: Cash-Strapped Firms Sell Unpaid Accounts.

"Cash flow has become a leading concern for small firms as banks reduce credit lines, shorten maturities and raise rates, according to a May study by the Credit Research Foundation. Among the companies surveyed, 45% said the financial crisis was straining their access to working capital. Almost 70% reported a slowdown in customer payments, and 61% said their top priority was to boost cash flow by getting clients to pay what they owe faster.
The Receivables Exchange (TRE), which runs an online auction market for accounts receivable, is benefiting from these trends. More companies have been turning to the two-year-old firm to raise money as traditional credit sources dry up.
"We take the most liquid of the assets on the balance sheet that they can modify and allow those to trade on a transparent, standardized exchange," says Nicolas Perkin, president of the New Orleans-based company.
With TRE's online system, which one might describe as an eBay... for factoring, sellers post eligible receivables and set sale parameters, such as the duration of the auction, the minimum advance payment and the maximum fee they will pay.
Buyers, such as commercial banks and hedge funds, browse for accounts to bid on and post profiles indicating their preferences. Sellers can leave the auction open-ended or set a "buyout price" that allows a buyer to immediately snap up the accounts.

TRE has almost $20 billion of liquidity up for grabs. The average seller is looking to unload $65,000 of accounts receivable. The average auction lasts one day, with the shortest clocking in at less than a minute. The company has a 99% completion rate, with upwards of 85% selling at the buyout price. About 86% of users are repeat customers. "

I've written about TRE before, here and here.

Update: Steve Leider points me to this Marketplace Whiteboard video explaining Factoring, inspired by the recent troubles of CIT, a big factor.

U.S. black market for kidneys, continued

The AP takes up the story of a man who says he sold his kidney in NY for $20,000, and who posted a video on the web. Here's the publication of the story by MSNBC, which includes the video: Man says he sold kidney in U.S. for $20k. (The video isn't full of information, but the kidney content begins just after minute 5.)

"In 2005, a rebellious and sporadically employed Israeli man flew to New York to give up a kidney to save an American businessman. For that, he says he was paid $20,000, which appeared in a brown envelope on his hospital bed after the operation.
...
"Rosen believes he did a good deed and that organ donors like him should be compensated. Much of his story can be confirmed, and the case gives new resonance to claims that a black market for kidneys has thrived even in the United States."

Here's my earlier post on Black market for kidneys: in the US? , and here's the long list of posts on compensation for donors generally.

HT: Katy Milkman at Wharton

Bob Aumann speaks in SA about game theory and market design

Bob Aumann has been lecturing in South Africa, and speaking about game theory as the foundation of market design, South Africa's Business Day reports: Game theory has a host of practical applications .

"Aumann thinks moving from game theory to game engineering will help us. Theory can be used to design practical interactive systems — the US auctions being a good example. But he says governments in particular must understand the power of incentives to drive economic and political actors, and work towards creating systems that get the best from them."

Licensing of Lawyers and Doctors and some more surprising professions

Can it be that Texas has only 22 licensed matchmakers?
(But 73 licensed ringside physicians?)
You can search Texas licenses by type here , in a drop down menu that starts with airconditioning contractors and ends with water well drillers, with matchmakers and many others in between.

Licensing plays a big role in the regulation of some markets, and not just the markets you would suspect, like those for doctors and lawyers. Some of the questions that come up in the licensing biz can be gleaned from the url's of the decisions they generate, like this one: http://www.license.state.tx.us/cosmet/cosmet.htm#eyelashes .
(That's from the Statement from TDLR about applying false eyelashes, eyelash tabbing and eyelash extensions and whether a person must hold a cosmetology license in order to perform these procedures.)

And, since you asked, here's the Texas ruling on fish pedicures.

Across state lines, there's some uniformity in how doctors and lawyers are treated, although not so much that moving from state to state is always easy. And there are some notable differences between doctors and lawyers.

Q. In how many states can a new medical school graduate be licensed to practice medicine right after passing the necessary exams (i.e. before doing at least one year of supervised clinical experience as a resident)?

A. Zero (although no information is available at this time on the Solomon Islands and the Northern Marianas, see State-specific Requirements for Initial Medical Licensure compiled by the Federation of State Medical Boards.

Q. In how many states can a new law school graduate be licensed to practice law after passing the necessary exams?

A. In all of them, unless I'm badly misreading the Comprehensive Guide toBar Admission Requirements 2009, published by the National Conference of Bar Examiners.

Q. What do Mississipi, Missouri, Texas and the Northern Marianas Islands have in common?
A. Those are the American jurisdictions in which a felony conviction is an automatic bar to admission to the legal bar, according to "CHART II: Character and Fitness Determinations" in the link above. (That doesn't mean felons get a free pass in other jurisdictions, just that their disqualification isn't categorical and automatic. E.g. in Florida, a felony conviction is "Not an automatic bar, but restoration of civil rights is required.")

Health care as a protected transaction

President Obama makes the case that health care, and health insurance, should be protected transactions (and that some existing insurance practices are repugnant):

"Our reform will prohibit insurance companies from denying coverage because of your medical history. Nor will they be allowed to drop your coverage if you get sick. They will not be able to water down your coverage when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or in a lifetime. And we will place a limit on how much you can be charged for out-of-pocket expenses. No one in America should go broke because they get sick. "

From Why We Need Health Care Reform by Barack Obama

Paul Romer on market design

Paul Romer, at Charter Cities, thinks of market design as part of the economics of ideas, in his post on Fish Proverb v2.0 (Bringing in Rules):

"Most of the work on the economics of ideas has focused exclusively on a subset of ideas, technologies. Economists have been slower to acknowledge the complementary set of ideas, rules. "

Market for household staples

Just as the pattern of demand for textbooks differs from demand for other books, household staples have a different pattern than other goods. While peaches may only sometimes be in season, lightbulbs always are, and perhaps your regular shopping needs can be met by a specialized service.Here's a story: Alice.com Grasps the Woes of Buying Toilet Paper . Here's the site: http://alice.com/

Indian court decriminalizes gay sex

Another court, in another democracy, finds that an ancient repugnance violates another constitution: Indian court decriminalises gay sex.

"An Indian court has ruled for the first time that consensual gay sex is not a crime, in a breakthrough for Aids campaigners and the country’s largely closeted homosexual community. "
...
"“Consensual sex amongst adults is legal which includes even gay sex,” said a two-judge bench after considering a petition against the law. "

Where it's illegal for prostitutes to give massages

The complicated legal situation in Rhode Island makes indoor prostitution legal, but requires masseurs to be licensed, so prosecutors "brought charges against alleged brothels for performing unlicensed massages."

This from a story by Sarah Schweitzer in today's Boston Globe, Many seek ban as prostitution thrives in R.I..

The debate over whether to change the law and (re)criminalize indoor prostitution is revealing, and suggests some of the complexities underlying repugnance to prostitution.

"Prostitution has flourished in Rhode Island, and the state has the distinction - a dubious one, many say - of being the only state in the nation to permit what is often referred to as indoor prostitution, a phrase that distinguishes it from streetwalkers’ solicitations. (In Nevada, the practice is permitted only in certain counties.)
Legislators have repeatedly proposed banning all prostitution in the state, without success. Yet, as the number of spas has exploded in recent years, pressure has mounted for change. This year, both the House and the Senate passed separate antiprostitution bills. Legislative leaders are now trying to hammer out a compromise with the backing of Governor Donald Carcieri."

"Leaders of the push to ban indoor prostitution say Rhode Island is encouraging a dangerous profession, and embarrassing itself in the process.
...
"In addition to support from Carcieri, Giannini’s bill has won backing from Bishop Thomas J. Tobin of the Roman Catholic Diocese of Providence and state Attorney General Patrick Lynch."

"Opponents also have a broad spectrum of support, including local chapters of the American Civil Liberties Union and the National Organization for Women, and a group of academics from around the globe who recently penned an open letter to the Rhode Island Legislature saying that, “compared to street workers, women and men who work indoors generally are much safer and less at risk of being assaulted, raped, or robbed.’’ "

Rakesh Vohra on Indian higher education

Rakesh Vohra doesn't hesitate to call 'em as he sees 'em in his post on Signaling and Indian Higher Education.

"...India offers only three varieties of higher education.
First, low price and low quality for a select few. These are the IIT’s and the IIM’s. In India there is a quaint belief that these handful of institutions are `world class’. Apart from some isolated departments, this is not true. This assertion will generate a response. So, let me lay on the kindling. It is doubtful if many of the faculty at these institutions would find employment in any top 20 university in the states. Note the implicit assumption in this arrogant statement: quality of faculty research is positively correlated with the ability to produce men and women qualified to `hold dominion over palm and pine’. I’ll get back to this later.
Second, high price and low quality offered by private institutions; here one pays for infrastructure. If one must attend college, it might as well be pleasant. So, tennis courts, air-conditioned class rooms etc.
Third, low price and zero quality for the rest. These are the government run Universities bedeviled by student strikes and chronic faculty absenteeism."

British professions

The London Times reports on a British government report on the socioeconomic background of new lawyers, doctors, journalists, and accountants: Top professions 'operate closed shop to exclude the poor'

"Law, medicine and other professions have become more exclusive in the past 30 years, drawing recruits from better off, middle-class families, a government report has found.
Other former trades, such as journalism, have evolved into “modern professions”. They are increasingly colonised by middle-class graduates and offer fewer opportunities for young people with lesser qualifications to get a foot on the ladder.
Barriers to all professions, traditional and modern, have also sprung up — most notably internships — making it even more difficult for children from poor backgrounds with few connections to break in.
The report on access to the professions was commissioned by Gordon Brown and written by Alan Milburn, the former Health Secretary. He said traditional and modern professions had a “closed shop” mentality, blocking mobility and shutting their doors to children from poorer backgrounds."
...
"Professions should also be obliged to report to ministers on how they offered internships. In recent years these unpaid and often lengthy periods of work experience have become the gateway to the best jobs. Mr Milburn said that too often such placements depended on who you knew.
The report revealed that the law is the most exclusive profession. Lawyers who entered the profession in the 1990s typically grew up in families with incomes 64 per cent above average. Those starting out in the 1970s came from homes with incomes 40 per cent above average. Three quarters of judges and two thirds of top barristers are privately educated. “Modern professions”, such as journalism, are not far behind, with degrees and even postgraduate qualifications and an internship now the norm for entry.
Most journalists and broadcasters are from wealthy families and more than half have been privately educated. Forty years ago, only a tiny proportion of journalists were from privileged backgrounds and most worked their way up.
Accountancy is another new preserve of the middle classes. Forty years ago accountants starting work came from families on average incomes but 20 years later in the 1990s, accountants came from families on incomes 40 per cent above average. "

Paying for unpaid work: Market for internships, continued

When "experience" is necessary for a new job, acquiring experience is worth paying for. In an earlier post, I wrote about paying for unpaid internships in Britain, and now a very well written story by Gerry Shih in the NY Times outlines similar developments in the U.S.: Unpaid Work, but They Pay for Privilege. I quote his story at length below, with the kicker being the last paragraph quoted:)

"With paying jobs so hard to get in this weak market, a lot of college graduates would gladly settle for a nonpaying internship. But even then, they are competing with laid-off employees with far more experience.
So growing numbers of new graduates — or, more often, their parents — are paying thousands of dollars to services that help them land internships.
Call these unpaid internships that you pay for.
“It’s kind of crazy,” said David Gaston, director of the University of Kansas career center. “The demand for internships in the past 5, 10 years has opened up this huge market. At this point, all we can do is teach students to understand that they’re paying and to ask the right questions.” "
...
"Andrew’s parents used a company called the University of Dreams, the largest and most visible player in an industry that has boomed in recent years as internship experience has become a near-necessity on any competitive entry-level résumé.
The company says it saw a spike in interest this year due to the downturn, as the number of applicants surged above 9,000, 30 percent higher than in 2008. And unlike prior years, the company says, a significant number of its clients were recent graduates, rather than the usual college juniors."
...
"But many educators and students argue that the programs bridge one gulf — between those who have degrees from prestigious colleges or family connections and those who do not — only to create a new one, between the students who have parents willing and able to buy their children better job prospects and those who do not.
“You’re going to increase that divide early, on families that understand that investment process and will pay and the families that don’t,” said Anthony Antonio, a professor of education at Stanford University. “This is just ratcheting it up another notch, which is quite frightening.” "
...
"The industry dismisses the criticism.
“Universities forget that they themselves are, in essence, businesses,” said C. Mason Gates, the president of Internships.com, an online placement service. “Just because they’re doing it in a nonprofit fashion doesn’t mean that those of us doing it for profit are doing it incorrectly.”"

Secondary market for prescriptions: a privacy-repugnant transaction

The information on your drug prescriptions, including your name, can be bought and sold, reports Milt Freudenheim in the NY Times: And You Thought a Prescription Was Private

"... prescriptions, and all the information on them — including not only the name and dosage of the drug and the name and address of the doctor, but also the patient’s address and Social Security number — are a commodity bought and sold in a murky marketplace, often without the patients’ knowledge or permission.
That may change if some little-noted protections from the Obama administration are strictly enforced. The federal stimulus law enacted in February prohibits in most cases the sale of personal health information, with a few exceptions for research and public health measures like tracking flu epidemics."
...
"Selling data to drug manufacturers is still allowed, if patients’ names are removed. But the stimulus law tightens one of the biggest loopholes in the old privacy rules. Pharmacy companies like Walgreens have been able to accept payments from drug makers to mail advice and reminders to customers to take their medications, without obtaining permission. Under the new law, the subsidized marketing is still permitted but it can no longer promote drugs other than those the customer already buys. "

Loss of privacy, particularly medical privacy, is a negative externality to some transactions that is increasingly seen as making them repugnant.

Gestation and the marriage market: second child still takes nine months

How long (after marriage) it takes for the first child to arrive is determined by many complex things, but the marriage market in Japan is evolving in a direction that shortens the time: Shotgun weddings on rise in Japan as attitudes to pregnancy shift.

"“From about five years ago the number of dekichatta-kon [weddings due to pregnancy] that we handle has not stopped rising,” she said. “Last year we worked out that about a quarter of the brides we worked with were pregnant, and some were about eight months along when they tied the knot.
“The couples used to be embarrassed, and our job was to try to hide the fact from the families. Now everyone is so relaxed about it we try to turn it into a double celebration and make life as easy as possible for the mother-to-be.”
...
"The shift reflects changing attitudes in Japan. The historic taboo of pregnancy outside marriage was largely abandoned during the 1990s but a strong tradition of being married by the time of the birth remained.
By 2004, however, the national average of ten months between marriage and the birth of a first child had fallen to six. "

A Toolbox for Economic Design by Dimitrios Diamantaras et al.

A new book on mechanism design theory, with a deep bow in the direction of practical market design, and a modern choice of topics (including the original mechanism design work on Kidney Exchange).

I haven't held it in my hands yet, but you can get a surprisingly good idea of the coverage by using the search function on the Amazon site:

A Toolbox for Economic Design by Dimitrios Diamantaras, Emina I. Cardamone, Karen A. Campbell Campbell, and Scott Deacle (Hardcover - March 31, 2009)

Fertility tourism and the British ban on paying egg donors

The fertility treament covered by Britain's National Health Service causes many Britons to seek treatment privately, elsewhere in Europe, the London Times reports: 'Thousands of Britons' travel abroad for IVF, research finds.

"Restricted access to fertility treatment on the NHS, the high cost of private therapy at domestic clinics and a serious shortage of donated eggs are driving couples to visit overseas clinics for help in starting a family. "
...
"IVF patients who need donated eggs are particularly likely to travel. Domestic donors are in short supply because of the removal of anonymity and tough rules against selling eggs.Spain and the Czech Republic are prime destinations, due to laws allowing donors to be paid €900 (£765) and €500 respectively for eggs. British donors get no more than £250 in expenses. "

Now the ban on payment for eggs is being reconsidered:

Pay donors to end the shortage of IVF eggs, says watchdog
"A longstanding ban on selling sperm and eggs should be reconsidered to address a national shortage of donors, the head of the Government’s fertility watchdog says. Payments to donors could cut the number of childless couples travelling abroad for treatment, Lisa Jardine, of the Human Fertilisation and Embryology Authority, told The Times. The removal of anonymity for donors in 2005 and strict rules against payments have provoked a crisis in fertility treatment, forcing many couples to wait years for the therapy they need to start a family. A recent study showed that access to eggs and sperm was the main reason why hundreds of British couples became “fertility tourists” each month."
...
"Her move will raise concerns about a market in human tissue and exploitation of women as egg donation is invasive and involves an element of risk. In countries that allow payment, such as the United States, Spain and Russia, young women often donate to wipe out debts or to fund university fees. Professor Jardine said that the law already treated eggs, sperm and embryos differently from other tissues, so there was no danger of setting a precedent for the sale of organs such as kidneys. Payment would also ensure that more women were treated in licensed domestic clinics, rather than in countries with less stringent regulations. “I’m not saying the decision arrived at before I became chair wasn’t the right one at the time,” she said. “But given the evidence that egg shortage is driving women overseas, I feel a responsibility to look at it again.” "

Mixed marriage bonus in Iraq

Iraq: $2, 000 for Shiite-Sunni Couples Who Marry

"Talib and his wife are among more than 1,700 newlywed couples who have accepted cash from a government program that encourages Sunnis and Shiites to tie the knot. The government has held 15 mass weddings for inter-sect couples from all over Iraq... While the Iraqi government doesn't track marriages bridging the two major Muslim sects, experts say mixed couples are on the rebound after a dramatic decline during the days of heavy violence. ...

"As security has improved, Iraqis are returning to their homes in mixed neighborhoods and spending more time at offices, universities and other places where they meet their future spouses, said Shiite cleric Sayyid Ahmed Hirz al-Yasiri in Baghdad's Shiite stronghold of Sadr City.
''There was a time when families were reluctant to consent to such marriages because of concerns created by certain conservative people from both sects,'' he said. ''That is over now and things are getting back to normal, like they were before the fall of Baghdad. "

MA sues to overturn Defense of Marriage Act

When views begin to change on whether some transaction is repugnant, laws may start to conflict. California legalized same sex marriage, then reversed itself. And Massachusetts, the first state to legalize gay marriage, is suing to overturn Federal legislation passed under the Bush administration that defines marriage for certain federal purposes as being between a man and a woman.

Here's a story about the suit: Mass. is 1st to fight US marriage law, and here's the text of the suit itself. The introduction to the suit states in part:

"In 2004, the Commonwealth of Massachusetts became the first state to end the exclusion of same-sex couples from marriage. Since that time, more than 16,000 qualified and committed same-sex couples have married in Massachusetts and the security and stability of families has been strengthened in important ways throughout the state. Despite these developments, same-sex couples in Massachusetts are still denied essential rights and protections because the federal Defense of Marriage Act ("DOMA") interferes with the Commonwealth’s sovereign authority to define and regulate marriage. As applied to the Commonwealth and its residents, DOMA constitutes an overreaching and discriminatory federal law.
In this case, the Commonwealth challenges the constitutionality of Section 3 of DOMA, codified at 1 U.S.C. § 7. Section 3 of DOMA creates an unprecedented federal definition of marriage limited to a union between one man and one woman. Congress’s decision to enact a federal definition of marriage rejected the long-standing practice of deferring to each state’s definition of marriage and contravened the constitutional designation of exclusive authority to the states. From its founding until DOMA was enacted in 1996, the federal government recognized that defining marital status was the exclusive prerogative of the states and an essential aspect of each state’s sovereignty, and consistently deferred to state definitions when the marital status of an individual was used as a marker of eligibility for rights or protections under federal law.
Now, because of Section 3 of DOMA, married individuals in same-sex relationships are both denied access to critically important rights and benefits and not held to the same obligations and responsibilities arising out of marriage or based on marital status. DOMA precludes same-sex spouses from a wide range of important protections that directly affect them and their families, including federal income tax credits, employment and retirement benefits, health insurance coverage, and Social Security payments. In enacting DOMA, Congress overstepped its authority, undermined states’ efforts to recognize marriages between same-sex couples, and codified an animus towards gay and lesbian people.
Section 3 of DOMA applies to all federal laws retrospectively and prospectively. In so doing, it affects the Commonwealth in significant ways. First, DOMA interferes with the Commonwealth’s exclusive authority to determine and regulate the marital status of its citizens. Although the Commonwealth views all married persons identically, Section 3 of DOMA creates two distinct classes of married persons in Massachusetts by denying hundreds of rights and protections to married individuals in same-sex relationships. Second, Section 3 of DOMA imposes conditions on the Commonwealth’s participation in certain federally funded programs that require the Commonwealth to disregard marriages validly solemnized under Massachusetts law. DOMA’s sweeping scope exceeds the powers granted to Congress and violates the United States Constitution. "


Here's a thoughtful article on the general legal issue by Martha Nussbaum: A Right to Marry? Same-sex Marriage and Constitutional Law.
A small snippet of that long (and interesting) article:

"What we’re seeing today, as five states (Massachusetts, Connecticut, Iowa, Vermont, and, briefly, California) have legalized same-sex marriage, as others (California, and Vermont and Connecticut before their legalization of same-sex marriage) have offered civil unions with marriage-like benefits, and yet others (New York) have announced that, although they will not perform same-sex marriages themselves, they will recognize those legally contracted in other jurisdictions, is the same sort of competitive process—with, however, one important difference. The federal Defense of Marriage Act has made it clear that states need not give legal recognition to marriages legally contracted elsewhere. That was not the case with competing divorce regimes: once legally divorced in any other U. S. state, the parties were considered divorced in their own.But the non-recognition faced by same-sex couples does have a major historical precedent. States that had laws against miscegenation refused to recognize marriages between blacks and whites legally contracted elsewhere, and even criminalized those marriages. The Supreme Court case that overturned the anti-miscegenation laws, Loving v. Virginia, focused on this issue. Mildred Jeter (African American) and Richard Loving (white) got married in Washington, D. C., in 1958. Their marriage was not recognized as legal in their home state of Virginia. When they returned, there they were arrested in the middle of the night in their own bedroom. Their marriage certificate was hanging on the wall over their bed. The state prosecuted them, because interracial marriage was a felony in Virginia, and they were convicted. The judge then told them either to leave the state for twenty-five years or to spend one year in jail. They left, but began the litigation that led to the landmark 1967 decision.In 2007, on the fortieth anniversary of that decision, Jeter Loving issued a rare public statement, saying that she saw the struggle she and her late husband waged as similar to the struggle of same-sex couples today:
'My generation was bitterly divided over something that should have been so clear and right. The majority believed…that it was God’s plan to keep people apart, and that government should discriminate against people in love. But…[t]he older generation’s fears and prejudices have given way, and today’s young people realize that if someone loves someone they have a right to marry. Surrounded as I am now by wonderful children and grandchildren, not a day goes by that I don’t think of Richard and our love, our right to marry, and how much it meant to me to have that freedom to marry the person precious to me, even if others thought he was the “wrong kind of person” for me to marry. I believe all Americans, no matter their race, no matter their sex, no matter their sexual orientation, should have that same freedom to marry.' "

Black market for kidneys: in the US?

The recent arrest in NJ of an alleged international kidney broker may eventually shed some light on the question of how much paid kidney donation may be going on in the U.S. itself. Here's an AP story that raises the question:

Lax hospitals may be fostering kidney-selling
"A look-the-other-way attitude at some U.S. hospitals may be fostering a black-market trade in kidneys, transplant experts say. Some hospitals do not inquire very deeply into the source of the organs they transplant because such operations can be highly lucrative, according to some insiders. A single operation can bring in tens of thousands of dollars for a hospital and its doctors."
...
"Mark McCarren, a New Jersey federal prosecutor involved in the case, said Rosenbaum indicated that the transplants he brokered took place at more than one U.S. hospital and that the hospitals were duped and were not in on the scheme.
According to prosecutors, Rosenbaum was shockingly familiar with the U.S. system and how to beat it. Sellers and recipients would concoct stories about being relatives or friends to fool hospitals into thinking no money was changing hands, McCarren said."

How large a kidney black market exists in the U.S. is an open question. A suggestion that it might not be very large at all was made at a recent transplant conference I attended, by the eminent transplant nephrologist Gabriel Danovitch, who showed some data suggesting that the socioeconomic status distribution of unrelated donors looked a lot like that of related donors. The idea is that, if there were a lot of under the table payments being made, you would expect unrelated donors to be poorer and less educated and perhaps more foreign than related donors...

Here's an earlier post on the subject.

And (not really related) here is an episode of the Daily Show with Jon Stewart that, around minute 7, has a skit lampooning organ sales, immediately following the opening discussion of health care reform.

Job market for lawyers: is a recession changing the model?

Above the Law, a blog about the legal profession, reports on recent firing and hiring, and speculates whether this may be a leading indicator of a fundamental change in the way big law firms are organized: Cadwalader Is Hiring -- Kind Of


"Many regular Above the Law readers will remember that Cadwalader, Wickersham & Taft laid off nearly 100 attorneys, back before laying off attorneys became cool. More recently, the firm put 34 associates on an involuntary sabbatical.
Cadwalader is still willing to give jobs to the 34 people let go earlier this month. Contract jobs. Multiple sources inform us that CWT is trying to bring on a gang of contract attorneys. "
...
"For those of us who are not trying to calculate the fair market value of our self-respect, we have to ask if this Cadwalader program is a sign of things to come? Cadwalader was clearly one of the first firms to realize that layoffs needed to happen. Are they also one of the first firms to realize that the associate model is dead?
We could be moving to a place where law firms are populated by partners, a few choice associates, and a gang of contract attorneys that can be added or subtracted as work demands. Is Cadwalader going to lead the way to a new and slightly terrifying future? "

Law clerks for Massachusetts courts

One consequence of the poor economy is that Massachusetts courts have reneged on offers of judicial clerkships made to new law graduates. There is a proposal to fill these positions instead, for free, with other new law graduates who have been put on half pay and had their start dates delayed by Massachusetts law firms.
Law firms may provide clerks for courts: Proposal raises ethical issues

There is some concern that having employees of law firms clerking for judges might involve impropriety or its appearance. The proposed solution strikes me as unworkable:

"But because the issue raised ethical concerns, Mulligan recently asked the committee for its opinion about a special “double blind’’ arrangement.
The Flaschner Judicial Institute, which provides continuing education to state judges, would deal with the law firms that supply the interns. Judges and court officials would have no contact with the donating firms, and the firms would be instructed not to identify the interns on their websites. The interns would be barred from disclosing which firms are paying their stipends.
On June 8, the SJC’s ethics committee approved the arrangement, emphasizing that the clerks must keep the identity of their law firms secret even from the judges they are working for.
“Structuring the program in such a way that the law firms’ involvement is unknown not only to the public but also to the judges who will be ‘employing’ the volunteer interns will negate any impression that those law firms are in a special position to influence the judge,’’ said the committee’s opinion, which was reported last week by Massachusetts Lawyers Weekly.
“I give Chief Justice Mulligan credit for making the best of a very bad situation, and it appears that the double-blind method of hiring will protect the integrity of the court and eliminate appearances of impropriety,’’ said David W. White Jr., a former president of the Massachusetts Bar Association who worked as a Superior Court law clerk in the mid-1980s.
Still, the arrangement, which requires clerks to recuse themselves from participating in cases involving their firms without identifying the conflict of interest, is “really going to test the willpower of the volunteer clerks,’’ White said."

Here is some background on the perenially troubled market for law clerks, and here is some (now dated) background on the market for new associates at large law firms, from Roth and Xing (1994).

Rejecta Mathematica

Volume 1 number 1 of Rejecta Mathematica is out. It is a journal which publishes only papers that have been rejected by peer reviewed journals. Here is the inaugural letter from the editors:
"For those unfamiliar with our mission, Rejecta Mathematica is an open access, online journal that publishes only papers that have been rejected from peer-reviewed journals in the mathematical sciences. In addition, every paper appearing in Rejecta Mathematica includes an open letter from its authors discussing the paper’s original review process, disclosing any known flaws in the paper, and stating the case for the paper’s value to the community. "

Assisted suicide, Right to Die in England: new development

The long discussion in England about the circumstances in which assisted suicide will be prosecuted has moved a step forward with a ruling from the House of Lords:

'Right to die' campaigner Debbie Purdy wins House of Lords ruling

"Families who help terminally ill relatives to end their lives will be free from the risk of prosecution after a landmark ruling yesterday.
The Director of Public Prosecutions is to rush out urgent guidance to clarify the law after Debbie Purdy, a multiple sclerosis sufferer, won an historic judgment from the House of Lords.
The guidance will not remove the offence of assisted suicide under the Suicide Act 1961 but make the situation clearer for people who help relatives to die in circumstances of “compassionate” assisted suicide.
In their unanimous ruling, five law lords said that the DPP must issue a “custom-built” policy stating the circumstances that would lead him to prosecute in such cases, and those where he would not. It is the first time that the DPP has been asked by the courts to detail the circumstances under which he would prosecute. "
...
"To date, 115 people have travelled from Britain to a Swiss clinic to be helped to die. Eight cases have been referred to the DPP but no relatives have been prosecuted. However, the uncertainty has led some people to make their last journey alone, without family members, so as not to risk their being prosecuted, Lord Hope of Craighead, giving judgment yesterday, said. Others, he added, had given up the idea of assisted suicide and “been left to die what has been described as a distressing and undignified death”.
Sarah Wootton, chief executive of Dignity in Dying, said that the ruling would clear up “the current legal muddle”. She said: “A law which is not understood, enforced or supported by the majority of the public is not fit for purpose. The ruling distinguishes between maliciously encouraging someone to commit suicide and compassionately supporting someone’s decision to die, in order that these acts are treated differently. More and more people want choice about how they end their life. Yet, until now, the law has refused to say whether people would face prosecution for accompanying someone abroad to exercise this choice.”
This month, an amendment tabled by Lord Falconer of Thoroton to remove the threat of prosecution from those who go abroad to help the terminally ill to die was defeated by peers in the Lords sitting not as a court but as the second chamber of Parliament. "

Medieval market design

The International Congress on Medieval Studies has issued a call for papers (posted by Dan Ernst on the Legal History Blog):
"We welcome proposals for papers that explicitly link legal history with economic history in explaining the dynamics of medieval life and culture.
Here are some examples of possible topics:

"The canon law generated regulations concerning Usury, the Just price etc. during the "long" Twelfth Century. Meanwhile, secular laws sought to regulate markets (through laws on forestalling, regrating, engrossing, Assize of Bread and Ale etc.) and boosted those on coining offenses. This sustained attempt to restrain economic activity through law must be largely explicable from the context of economic change against which it was made. How might the Legal Revolution (the whole or any part) and the rising "Profit Economy" (Lester Little) be causally linked?"

My one attempt to study Medieval market design, in a paper on unravelling (with Xiaolin Xing), concerned forestalling (forestalling was the medieval crime of transacting before the official opening of a market). Our discussion can be found here. (The selection is short, and on rereading it I recall that I particularly enjoyed footnote 72, partly because of the name of one of the plaintiffs in the case it describes).

Kidney exchange: moving towards a national program

Kidney exchange, which works best with a thick market (lots of patient-donor pairs), is now moving towards experimenting with a national matching program: UNOS Currently Accepting Proposals for Kidney Paired Donation Pilot Program

"United Network for Organ Sharing (UNOS) is developing a national kidney paired donation (KPD) system. UNOS, as the OPTN contractor, will administer this system and it will be open to all OPTN/UNOS-approved transplant programs that perform living donor kidney transplants.
To help prepare for the final implementation, UNOS will begin an interim implementation of the KPD Pilot Program in September 2009. The interim implementation will allow UNOS staff to gain experience with KPD and refine its business processes before rolling out the full system in 2010. We will limit the interim implementation to two to four groups initially.
Any living kidney programs who would like to participate in the interim implementation must submit a proposal... by August 5, 2009.
A complete copy of the Request for Proposal (RFP), including details about who can participate, is available on the UNOS Web site. Learn more now "

Assisted suicide in England and Switzerland, continued

The British press continues to follow British citizens who choose to end their lives in Switzerland, where assisted suicide is legal. (In Britain, as in many if not most places, it remains a repugnant transaction: it's not a crime to attempt suicide, but it is a crime to assist.) In this case, one of the members of the couple who ended their lives was not terminally ill (although it sounds like his quality of life had been severely compromised): With Help, Conductor and Wife Ended Lives

"The controversy over the ethical and legal issues surrounding assisted suicide for the terminally ill was thrown into stark relief on Tuesday with the announcement that one of Britain’s most distinguished orchestra conductors, Sir Edward Downes, had flown to Switzerland last week with his wife and joined her in drinking a lethal cocktail of barbiturates provided by an assisted-suicide clinic."
...
"“After 54 happy years together, they decided to end their own lives rather than continue to struggle with serious health problems,” the Downes children said in their statement."
...
"“Even if they arrest us and send us to prison, it would have made no difference because it is what our parents wanted,” he said.
Attempting suicide has not been a criminal offense in Britain since 1961, but assisting others to kill themselves is. But since the Zurich clinic run by Dignitas was established in 1998 under Swiss laws that allow clinics to provide lethal drugs, British authorities have effectively turned a blind eye to Britons who go there to die.
None of the family members and friends who have accompanied the 117 people living in Britain who have traveled to the Zurich clinic for help in ending their lives have been charged with an offense. Legal experts said it was unlikely that that would change in the Downes case.
But British news reports about the Downes’ suicides noted one factor that appeared to set the case apart from most others involving the Dignitas clinic: Sir Edward appeared not to have been terminally ill. There have been at least three other cases similar to the Downes’, in which a spouse who was not terminally ill chose to die with the other. "

A subsequent story in the Times reveals changing sentiments: Huge public support emerges for the right to die

"Overwhelming public support for a change in the law to allow medically assisted suicide is revealed in a poll for The Times.
Almost three quarters (74 per cent) of people want doctors to be allowed to help terminally ill patients to end their lives. Support is particularly strong among those aged 55 to 64.
Six out of ten people also want friends and relatives to be able to help their dying loved ones to commit suicide without fear of prosecution.
Changing the law has always been opposed strongly by doctors, with two out of three against legalisation. But yesterday saw the first sign of change in the medical establishment. "

Corruption and kidneys in New Jersey and Brooklyn

The NY Times reports on a corruption investigation resulting in 44 arrests in New Jersey and Brooklyn: In New Jersey Case, Nervous Jokes and a Cereal Box of Cash

Almost as an aside, the story reports that a broker for transplant kidneys was caught in the net:

"Another man in Brooklyn, Levy-Izhak Rosenbaum, was accused of enticing vulnerable people to give up a kidney for $10,000 and then selling the organ for $160,000. Mr. Dwek pretended to be soliciting a kidney on behalf of someone and Mr. Rosenbaum said that he had been in business of buying organs for years, according to the complaint."

Part of the repugnance to the transaction seems to be the buying and selling prices. (Would we/should we feel differently if the kidneys were bought for $100,000 and sold for $115,000?)

Steve Leider points me to an Indiana Jones connection: Anthropologist's 'Dick Tracy moment' plays role in arrest of suspected kidney trafficker. (The anthropologist in question, Nancy Scheper-Hughes, writes frequently about black markets for kidneys, and apparently indentified Mr Rosenbaum some years ago, although the story doesn't suggest to me an immediate connection to the recent arrest.)

Parag Pathak points me towards Benyamin Cohen's story in Slate, following up on the Jewish connection: The arrests of rabbis who trafficked body parts uncover more complicated issues, that suggests some of the nuances of Jewish religious jurisprudence about organ donation and sales.

Trying to figure out Jewish law directly from the Bible skips a couple of centuries of subsequent interpretation. Here's what I wrote about kidney sales in a footnote of my paper Repugnance as a constraint on markets:

3 While there is no central authority on the application of Jewish law to modern concerns such as transplantation, the most authoritative opinions are contained in various “responsa” or answers to particular questions by rabbis acting as legal “deciders” (poskim), whose authority arises from the respect of their peers. The consensus on the matter of live kidney donation, for example, seems to be that live donation is allowed (since it saves lives), but it is not required (since the donor becomes wounded and takes some risk to his own life), and hence it falls into the category of things for which compensation could be offered and accepted (unlike actions that are either forbidden or required). See, for example, Eisenberg (2006), Grazi and Wolowelsky (2004), Kunin (2005), and Israeli (1997) who cite eminent modern poskim such as Rabbi Shlomo Zalman Auerbach and Rabbi Moshe Feinstein."

"For example, Avraham (2004, p. 271–2) reports the opinion of the eminent Rabbi Shlomo Zalman Auerbach that someone who sells a kidney with the intention of saving a life does a good deed “even if he would not have donated his kidney only to save life.” But he goes on to note, “[I ]n spite of all that has been said above, it seems to me that it is the community that needs soul-searching for allowing a person to reach such a depth of despair that he must sell a kidney, either because of poverty, debts, or the inability to pay for a relative’s medical expenses.”

Although mainstream Jewish authorities support organ donation, some streams of ultra-orthodox Judaism do not: here's a disturbing article brought to my attention by Miran Epstein, from Yediot: Heart recipient's father: We'll never donate organs
It goes on to note
"The father's words angered Prof. Yaacov Lavee, director of the Heart Transplantation Unit at the Sheba Medical Center. "This is outrageous," he said. "I've heard such statements from many of my candidates (for a transplant), who weren't ashamed to admit they wouldn't donate organs.
"Such statements led me to initiate the bill that prioritizes transplants for people who have signed an organ donor card. This is clearly immoral behavior," he added.
The new transplant law, which will go into effect in May, states that any person in need of a transplant and who has had an organ donor card for at least three years will be given priority on the organ transplant waiting list. "

This makes some aspects of Israeli transplant law resemble parts of Singapore's transplant law, which also gives priority for organs to those who are registered as donors. (I wrote about this near the end of an earlier post.)

Update: Sally Satel's take is in the WSJ: About That New Jersey Organ Scandal It’s not surprising when 80,000 Americans are waiting for kidneys, and a background piece from Time magazine: How Does Kidney-Trafficking Work?

House flipping fraud in Florida

I received the following email from Eric Budish, the Chicago market designer:

"I came across a neat investigative journalism feature on a form of mortgage fraud called “house flipping” .

The newspaper reviewed 19mm Florida real-estate transactions, and found that 50,000 involved appreciation of 30%+ in less than 90 days. They investigate one fraud circle in depth, and have features on the local police, lenders, etc.

What makes the fraud tick is that the buyer can finance at the new price. So if A legitimately buys a house for 100, then immediately sells it to his buddy B for say 150, B can get a mortgage against the 150 (especially if his buddy C is a real-estate appraiser). Even if B makes a small down payment on the 150, together A and B have extracted 50 minus downpayment minus fees in cash from the transaction. B never intends to repay the 150, and B’s mortgage lender is severely under collateralized.

The reason I think this is all so interesting is that the fraud is only possible because houses are idiosyncratic, but not too idiosyncratic. If houses were perfect substitutes, then A, B and C couldn’t trick the mortgage lender about house values (50,000 flips is a lot, and likely an underestimate, but still less than 1% of transactions). If houses were substantially more idiosyncratic, then banks would never have gotten in the habit of financing 90%+ of the purchase price in the first place: in the event of foreclosure they’d have to worry about whether the right types of buyers would be in the market. Put differently, the housing market is not too thick, but not too thin."

Is fish-tossing repugnant?

Fishmongers in Seattle throw dead fish around the market, and it has apparently become not just a way of handling fish for sale, but a form of entertainment.

"Jeremy Ridgway, one of the managers at the market, said that he has done fish shows for the ministry of manpower in Singapore, for schoolchildren in Oklahoma and at countless other venues."

One of those other venues was a meeting in Seattle of the American Veterinary Medical Association, which decided to go ahead with "a plan to host a team-building program offered by the famous fish-throwers of Seattle's Pike Place Fish Market."

The organization People for the Ethical Treatment of Animals (PETA) finds this repugnant, and thinks such events should not be conducted.

Judge for yourself: Seattle's Pike Place fishmongers under fire .

Fly fishing

I spent last weekend in Jackson Hole Wyoming at a transplant conference. My friend Owen Phillips, the U. of Wyoming experimental economist who I first met when he visited Harvard in 2005, invited me to go fly fishing with him the next day. He hired a well recommended fishing guide, Mickey Brockman.

Fishing guides are licensed by the state, and work as subcontractors for businesses that hold outfitters' licenses (in Mickey's case, Westbank Anglers). So the arrangement is a bit like taxi drivers in cities where legal cabs require taxi medallions, except that fishing guides use their own equipment. Mickey's equipment includes a dory, which he rows facing forward, and a variety of fishing gear, including the barbless hooks that allow you to release the fish quickly after catching it. (He also packed lunch, which we ate looking up at the Grand Tetons, which sounds even better in French.)

Owen and I presented Mickey with a complicated task, since Owen is an expert angler with a lifetime of experience, and I was holding a fly reel for the first time. So, Mickey had to teach me the mechanics of casting, while keeping up a running list of likely targets for Owen to aim at.

It was an experience, and if you're in Jackson Hole and can't get Owen to take you, I certainly recommend Mickey.

(Thanks, Owen.)

To make the story long, we finished the day eating elk at Stiegler's (also recommended), which got us thinking about the market for elk: it turns out they are farm raised.

From Jackson Hole I flew to Stony Brook, Long Island, for a game theory conference. That tells you something about medicine and economics...

Regulatory capture in French electricity market

David Jolly reports in the NY Times: France Resists a Power-Monitoring Business

"Two weeks ago, the French Energy Regulatory Commission, the C.R.E., decided that Voltalis, a company that installs electricity management devices in homes and businesses and then manages their use, would have to, in effect, pay power producers for the power that it saves. "