The Market and Marketization

I'm following at a distance a series of workshops in Helsinki on the philosophy and sociology of economics: The Market and Marketization
"Is there something wrong with the market for human kidneys, child labour, chemical weapons, or greenhouse gas emissions? Is it possible to have markets for electoral votes, scientific ideas, love, moral praise, or salvation? Do we have markets in our heads? How do models of the Market relate to real world markets? How do the diverse models and theories of the Market in various scientific disciplines relate to one another? In what sense is the Market mechanism a mechanism? Does the same mechanism function outside of the ordinary economy? Does marketization always lead to more efficiency? Does it increase human happiness and wellbeing? What are its preconditions and consequences regarding our moral character? Does the marketization of society have any limits at all? "

Participants (and hangers on) were each asked to introduce ourselves to an interdisciplinary audience. My contribution:

"Two papers of mine that might be helpful for an interdisciplinary readership are
Roth, Alvin E. "What have we learned from market design?" Hahn Lecture, Economic Journal, 118 (March), 2008, 285-310.
Roth, Alvin E. "Repugnance as a Constraint on Markets", Journal of Economic Perspectives, 21:3, Summer, 2007, pp. 37-58."

A living lung donor is running today in the Boston marathon

A stranger, a gift, and a marathon miracle: Ellyn Cohen needed a lung to live, then a woman she’d never met offered hers

"It was an unusual act of kindness. Last year, out of 1,661 lung transplants in the United States, only one came from a living donor. In 2008, the number of living lung donors was zero, according to the Organ Procurement and Transplantation Network, the government agency that coordinates national waitlists for organ transplants. And in 2004, the year Greene made her donation, she was one of just 28 living lung donors out of 1,172 transplants. That year, 492 people died while waiting for a lung.
As uncommon as living lung donors are, it is even less common for the organ to come from a stranger. And the way Greene found out about Cohen’s plight — from a mass e-mail forwarded by a friend — makes the story all the more incredible, said Sean Fitzpatrick, spokesman for the New England Organ Bank, the federally designated nonprofit organization that identifies deceased donors and recovers organs and tissues for transplants in the region."
...
"A few weeks after the surgery, Greene was playing tennis. The four lobes that remain in her two lungs are one less than a normal healthy person has. But her doctors have told her that her lungs work better than those of many healthy people. Two years ago, Greene started running. She decided to do the marathon to mark her half-century milestone. She got a charity number from her spouse, Angela Cenzalli, who works for the Special Olympics. But she will wear the shirt of the New England Organ Bank, to draw attention to the plight of the more than 1,800 people in the country awaiting lung transplants.
“If more people registered as donors we wouldn’t have to take parts out of living bodies,’’ Greene said. “I’m not asking people to donate their organs when they are alive.’’
She is not expecting to finish the race in less than five hours.
“I like to think that I’ll be fairly high up among the four-lobe people,’’ she smiled."

Civet coffee

Here's a story from the NY Times that, if published on April 1, would have won a prize.

From Dung to Coffee Brew With No Aftertaste
"Costing hundreds of dollars a pound, these beans are found in the droppings of the civet, a nocturnal, furry, long-tailed catlike animal that prowls Southeast Asia’s coffee-growing lands for the tastiest, ripest coffee cherries. The civet eventually excretes the hard, indigestible innards of the fruit — essentially, incipient coffee beans — though only after they have been fermented in the animal’s stomach acids and enzymes to produce a brew described as smooth, chocolaty and devoid of any bitter aftertaste.
As connoisseurs in the United States, Europe and East Asia have discovered civet coffee in recent years, growing demand is fueling a gold rush in the Philippines and Indonesia, the countries with the largest civet populations. Harvesters are scouring forest floors in the Philippines, where civet coffee has emerged as a new business. In Indonesia, where the coffee has a long history, enterprising individuals are capturing civets and setting up minifarms, often in their backyards.
Neither the Indonesian government nor the Association of Indonesia Coffee Exporters breaks down civet coffee’s tiny share of Indonesia’s overall coffee production. The Association of Indonesian Coffee Luwak Farmers, created in 2009 to handle the rising demand for civet coffee, or kopi luwak, as it is called in Indonesian, said most civet producers were small-time businessmen who exported directly overseas.
Given the money at stake, fake and low-grade civet coffee beans are also flooding the market. "
...
"Competition is touching off fierce debates. What is real civet coffee, anyway? Does the civet’s choice of beans make the coffee? Or is it the beans’ journey through the animal’s digestive tract? Can the aroma, fragrance and taste of beans from the droppings of a caged civet ever be as tasty as those from its wild cousin? "

Update. Bettina Klaus writes from Lisbon (where she's stranded by the Icelandic ash cloud), "I found a link on further "Disgusting Delicacies" http://www.walletpop.com/specials/bw/disgusting-delicacies/. Goat poop oil also sounds nice. And the coffee can be mail ordered: http://www.animalcoffee.com/ "

Live kidney donation via twitter and other social networking sites

For many years the transplant community was very uneasy about solicitation of live kidney donors, but that seems to be changing. Web sites like MatchingDonors.com have achieved much more widespread acceptance (and they have in turn started to integrate themselves with kidney exchange programs).


Arthur Matas, the Director of Renal Transplant at U. Minnesota, has a blog post on Kidney donation via Twitter. Here's a newspaper article that follows the story: Kidney Transplant A Success Among Cyber Friends.


Social network sites may be just the sort of thing needed to help people let their friends know that they need a kidney, without putting any particular friend on the spot with a direct request.

Boston Globe on school choice

The problem with school choice is not enough seats at good schools. And in every city I've dealt with, there are two political parties when it comes to school choice: the "walk to school" party, who live near good schools, and the "school choice" party, who don't. Here's how it looks to the Globe, following a season in which a city councillor's child did not get a place in his local kindergarten.

City tries anew to end school-placement frustrations: Even those with clout chagrined by lottery
By James Vaznis, Globe Staff April 16, 2010
"Among young families in West Roxbury, it was one of the most closely watched lotteries: Would the 3-year-old son of their neighborhood city councilor win entry into a public school pre-kindergarten program, particularly a coveted placement just down the street from his home?
After all, a host of other children in the city’s well-connected political families have received their top choices in the school lottery in the past, leading to a slew of conspiracy theories that the computer-generated algorithm was subject to political tinkering.
As it turned out, luck was not on the side of City Councilor John Tobin and his wife, Kate. Their son was wait-listed recently at all four of their choices, an ironic outcome for a politician who long advocated for greater leeway in allowing students to attend neighborhood schools.
Being locked out is a crushing event experienced by hundreds of parents across the city each year, prompting some to flee to the suburbs. For Tobin, the disappointment has added a personal twist fueling his crusade for changes in the city’s school-placement system.
“I’m just like everyone else tremendously disappointed by this system,’’ he said yesterday in a phone interview. “Kids in a neighborhood should get the first chance at their neighborhood school’s seats, and those left open could be filled by other students. Schools should just be part of a neighborhood as community centers and libraries.’’
Tobin, who penned a recent column about his family’s lottery loss for the West Roxbury Transcript, is stepping up his push as the district embarks on a new effort that could lead to a radical overhaul in the way the city has been assigning students to school for decades.
The new effort has two parts. First, civil rights lawyers and others are helping the district with a federal grant to find ways to change the student-assignment system without disenfranchising the city’s poorest children. Meanwhile, Superintendent Carol R. Johnson is working to raise the quality of education in the city’s poorest neighborhoods, calling it the Circle of Promise.
Under the current system, established to replace a court-created desegregation plan, the city is divided into three sprawling-geographic regions, allowing parents to choose from dozens of schools in their zone. For instance, it allows a student from a housing development in Roxbury — which has a disproportionate share of low-performing schools — to attend a high-quality school in West Roxbury, a city neighborhood with a suburban character.
The system has created stiff competition for the city’s top-performing schools, often leading to heartache and bitterness when families don’t get their top choices, especially in kindergarten.
Adding confusion at decision time is mystery over the complex computerized program that randomly assigns students. The formula, among other factors, gives weight to applicants who have a sibling at a school and allows half of seats at a school to go to applicants who live a certain distance away from the school.
Some families, Tobin said, question the lottery system’s fairness. During last fall’s mayoral race, a challenger to Mayor Thomas M. Menino and then city councilors Sam Yoon and Michael Flaherty noted in a debate that the trio had family members at top-choice schools.
“People think there are shenanigans that go on with the lottery system,’’ Tobin said. “When something is done behind closed doors, it raises eyebrows.’’
Matthew Wilder, a school department spokesman, defended the lottery system, saying that Tobin’s story shows “how blind the system is.’’ Even one of the mayor’s grandchildren didn’t get in a pre-kindergarten program in recent years.
Wilder noted, however, that about 80 percent of children who applied this year in the first round for a seat in pre-kindergarten, an optional city program with limited capacity, got one.
“We don’t feel this is an assignment issue, but a space issue,’’ Wilder said. “We don’t have enough room for everyone who wants a seat for their 4-year-old. We are very lucky in Boston we offer full-day kindergarten for 4-year-olds. Not a lot of cities can say that.’’
Tobin said every year around this time he has conversations “with people calling me up in tears’’ because they did not get into any of their chosen schools — whether for kindergarten or some other grade — prompting them to consider leaving the city for the suburbs. Tobin, who grew up in Mattapan and West Roxbury, said many of his friends have departed for Walpole.
Theresa Strang, a stay-at-home mother in West Roxbury, whose daughter was wait-listed this year for pre-kindergarten, is organizing a group of mothers to push for changes to the system.
“Everyone is talking about moving,’’ she said. “I know a woman who put her house on the market. . . . Why don’t they invest in neighborhoods and make them better?’’
Past attempts by the city to change the system have collapsed amid a tug-of-war over school access. Last year intense community opposition doomed a plan to break the city into five zones.
Tobin said he is not optimistic about seeing a return to more neighborhood schools. In some respects, he said, the city is a victim of its own success as education at many elementary schools has improved with the addition of such programs as full-day pre-kindergarten.
Still, he said, there are not enough high-quality schools.
“We live on Joyce Kilmer Road, and we can see the Joyce Kilmer School,’’ which was the family’s top choice and is one of the highest-performing schools in the city, Tobin said. “Explain the logic of why my son can’t go to that school. I will go to my grave not understanding that one.’’

Matching with preferences for colleagues

Marek Pycia at UCLA has a revised paper on matching when you care who your colleagues are:
Stability and Preference Alignment in Matching and Coalition Formation


Abstract: In any state of nature, agents have preference rankings over coalitions they belong to. Given a state of nature, agents’ preferences are pairwise aligned if any two agents in the intersection of any two coalitions prefer the same one of the two coalitions. Our main result says that under mild regularity conditions there exists a core stable coalition structure in every state of nature if, and only if, the preferences are pairwise-aligned in every state of nature. Pairwise alignment is satisfied by some standard models of payoff determination such as Nash bargaining that were not previously recognized as related to stability. As applications, we study complementarities and peer effects in many-to-one matching, the assortative structure of coalitions, and the impact of inequality among agents on coalition formation.

Waiting lists

A pessimistic story in the NY Times about college admissions waiting lists, which are long this year: For Students, a Waiting List Is Scant Hope

"The admission process is a complicated dance of supply and demand for colleges. And this spring, many institutions have accepted fewer applicants, and placed more on waiting lists, until it becomes clear over the next few weeks how many spots remain.
M.I.T., which had a 6 percent increase in applicants, increased its waiting list by more than half, to 722. Last year, it accepted fewer than 80 from that list. Yale, which had a slight dip in applications this year yet still admitted fewer than 8 percent of applicants, placed nearly 1,000 others on its waiting list, an increase of more than 150. Dartmouth increased its list by about 80, to 1,740."
...
"Like its competitors, Duke does not rank students on its waiting list. Instead, decisions about who will rise to the top are often a function of what the admissions office perceives as deficiencies in the next freshman class. There might be, for example, a surplus of aspiring engineers and not enough potential English majors, or too few students from Florida. Or there might be an unexpected shortage of oboe players.
While Mr. Guttentag encourages students on the waiting list to send him a one-page letter — or a video of 60 seconds or less — letting him know how strongly they wish to attend, and why, they can do little to improve their chances. "...

"Since waiting list offers went out in late March, Mr. Guttentag and his colleagues have been deliberating whether to end the suspense for at least several hundred who are on it — those who probably have little hope of coming off.
Another reason the list is so long this year, he said, is that he and his colleagues were so overwhelmed by the volume of applicants that they ran out of time.
“What we could have done, had we had another week,” he said, “was to look at everybody on the waiting list and say, ‘Do they all need to be on?’ ”
“Of all the priorities,” he added, “that was not in the top two or three.” "

Egg donor compensation

Study hard. The Globe reports: Yes, top students reap rich rewards, even as egg donors
Would-be parents want high scorers

"The Harvard Crimson was one of three college newspapers that ran an identical classified ad seeking a woman who fit a narrow profile: younger than 29 with a GPA over 3.5 and an SAT score over 1,400. The lucky candidate stood to collect $35,000 if she donated her eggs for harvesting.

The ad was one of 105 college newspaper ads examined by a Georgia Institute of Technology researcher who issued a report yesterday that appeared to confirm the long-held suspicion that couples who are unable to have children of their own are willing to pay more for reproductive help from someone smart. The analysis showed that higher payments offered to egg donors correlated with higher SAT scores.
“Holding all else equal, an increase of 100 SAT points in the score of a typical incoming student increased the compensation offered to oocyte donors at that college or university by $2,350,’’ wrote researcher Aaron D. Levine.
The paper, published in the March-April issue of the Hastings Center Report, examined ads in 63 student newspapers in spring 2006 and was billed as the first national cross-sectional sample of ads for egg donors. "
...
"Concerned about eggs being treated as commodities, and worried that big financial rewards could entice women to ignore the risks of the rigorous procedures required for harvesting, the American Society for Reproductive Medicine discourages compensation based on donors’ personal characteristics. The society also discourages any payments over $10,000.
Levine’s paper points out, however, that no outside regulator enforces those guidelines and that they are often ignored.
Of the advertisements Levine examined, nearly one-quarter offered donors more than $10,000, and about one-quarter of the ads listed specific requirements, such as appearance or ethnicity, also in violation of guidelines that discourage greater payment for particular personal characteristics."
...
"The issue of the report containing Levine’s analysis also offers a counterperspective from John A. Robertson, who chaired the ethics committee of the American Society of Reproductive Medicine. He casts doubt on the notion that it is an ethical problem to pay more for eggs from a woman with a particular ethnic background or high IQ. “After all, we allow individuals to choose their mates and sperm donors on the basis of such characteristics,’ Robertson wrote. “Why not choose egg donors similarly?’’ "

See also The Value of Smart Eggs from The Faculty Lounge by Kim Krawiec.
"In his response accompanying the report, John Robertson (Texas, law) questions whether there are really any ethical problems raised by the study – after all, Levine finds compliance with the ASRM guidelines in at least half the advertisements in his sample. I would argue, however, that Levine’s study highlights a serious ethical issue, though it is not infertile couples or the agencies working on their behalf whose behavior is ethically troubling. It is ASRM’s paternalistic and misguided attempts to control oocyte donor compensation through the same type of professional guidelines that courts have rejected when employed by engineers, lawyers, dentists, and doctors that should raise an ethical red flag."

And here is the Hastings Center Report: Self-Regulation, Compensation, and the Ethical Recruitment of Oocyte Donors by Aaron D. Levine

Biological markets: exchange of goods and services among non-human species

From the web pages of the French scientist Ronald Noe:

Biological Markets. "The label 'biological markets' was proposed by Noë & Hammerstein (1994; 1995) for all interactions between organisms in which one can recognise different classes of 'traders' that exchange commodities, such as goods (e.g. food, shelter, gametes) or services (e.g. warning calls, protection, pollination). "
"The characteristics of biological markets are found in mating systems ('mating markets'), mutualisms between members of different species and cooperation among conspecifics

"The term 'market' was chosen because it is assumed that shifts in supply and demand cause changes in the exchange value of the commodities traded. Important phenomena are: partner choice and outbidding.

"Formal properties of Biological Markets
Commodities are exchanged between individuals that differ in the degree of control over these commodities
Trading partners are chosen from a number of potential partners.
There is competition among the members of the chosen class to be the most attractive partner. This competition by 'outbidding' causes an increase in the value of the commodity offered.
Supply and demand determine the bartering value of commodities exchanged.
Commodities on offer can be advertised. As in commercial advertisements there is a potential for false information."

"Explicitly excluded is the use of physical force or threat to appropriate commodities or to eliminate the competition. The use of force is common, of course, as are theft and foul play in human markets, but one needs different paradigms to describe these phenomena.

"Examples of Biological Markets:
Obligate pollination mutualisms (to be added)
Ant protection mutualisms (to be added)
Mycorrhiza & rhizobia
Cleaner fish
Grooming in primates
Cooperative breeders
Delayed plumage maturation
Nest building in red bishops
links to further examples"

See also Market Models, on papers using game theory and comparative advantage to explore biological markets, which includes a bibliography of "Related theoretical approaches that also revolve around phenomena such as partner choice and competition by outbidding ..."

Unpaid workers: athletes and interns

Several blogs and news stories follow unpaid parts of the labor force, college athletes and student interns.

For Love of The Game (And The Money) from The Faculty Lounge by Kim Krawiec and Against the NCAA Cartel from The Volokh Conspiracy by Ilya Somin both consider the unpaid status of college athletes. The latter story explicitly mentions the high salaries of college coaches in basketball and football to indicate that these are profit making entertainment businesses despite the fact that the workers/players/students are unpaid.

There has also been a good deal of attention to the recent NY Times story headlined Growth of Unpaid Internships May Be Illegal, Officials Say

"With job openings scarce for young people, the number of unpaid internships has climbed in recent years, leading federal and state regulators to worry that more employers are illegally using such internships for free labor. "...

"Ms. Leppink said many employers failed to pay even though their internships did not comply with the six federal legal criteria that must be satisfied for internships to be unpaid. Among those criteria are that the internship should be similar to the training given in a vocational school or academic institution, that the intern does not displace regular paid workers and that the employer “derives no immediate advantage” from the intern’s activities — in other words, it’s largely a benevolent contribution to the intern.
No one keeps official count of how many paid and unpaid internships there are, but Lance Choy, director of the Career Development Center at Stanford University, sees definitive evidence that the number of unpaid internships is mushrooming — fueled by employers’ desire to hold down costs and students’ eagerness to gain experience for their résumés. Employers posted 643 unpaid internships on Stanford’s job board this academic year, more than triple the 174 posted two years ago.
In 2008, the National Association of Colleges and Employers found that 83 percent of graduating students had held internships, up from 9 percent in 1992. This means hundreds of thousands of students hold internships each year; some experts estimate that one-fourth to one-half are unpaid. "

Some regulatory guidance from California: California Labor Dept. Revises Guidelines on When Interns Must Be Paid
"Many wage and hour regulators maintain that interns must be paid if their work is of “immediate advantage” to the employer, but the California agency’s top lawyer advised that such an advantage can be offset — and the intern not be paid — if the employer provides close supervision and lays out money for training.
Over all, the guidance from the California Division of Labor Standards Enforcement was emphatic that for internships to be unpaid, they must be educational and predominantly for the benefit of the intern, not the employer. "

Some of these discussions have something in common with the discussions in the transplant community about compensation for donors.

Couples on the labor market

One of the longstanding puzzles in market design is why we have been as lucky as we have been in the design and operation of labor market clearinghouses that allow couples to state preferences over pairs of jobs. You can't get a stable matching without allowing couples to state their preferences this way, but when they do, the set of stable matching can be empty. But it almost never is, in practice.

Here's a first step towards understanding that:
Kojima, Fuhito, Parag A. Pathak, and Alvin E. Roth, " Matching with Couples: Stability and Incentives in Large Markets," working paper, April 8 2010.

Abstract: Complementarities pose problems in models of two-sided matching markets. This has been a longstanding issue in the design of centralized labor market clearinghouses that need to accommodate complementarities due to couples, as in the US market for medical doctors. These clearinghouses aim for a stable matching but a stable matching does not necessarily exist when
couples are present. This paper provides conditions under which a stable matching exists with high probability in large markets. Moreover, we present a mechanism that finds a stable matching with high probability and in which truth-telling by all participants is an approximate equilibrium. We relate these theoretical results to data from the labor market for clinical psychologists, in which stable matchings exist for all years of our data, despite the presence of couples.

Networks in markets that unravel, and those that don't: Itay Fainmesser

Itay Fainmesser defended his dissertation yesterday.

One of the papers in his dissertation concerns job markets that have “unraveled” so that a large part of the market consists of early, exploding offers. He develops a network model, motivated by the observation that when many markets unravel (as when medical labor markets start to hire doctors well over a year before they begin employment), hiring also becomes more local (as hospitals start to hire students from local medical schools, etc.). Itay takes this as evidence that when hiring is very early, employers are forced to rely more on their local networks for information. He builds a network model that allows him to investigate which properties of local networks lead to unraveling, and which lead to later hiring. In this model, information about the quality of candidates eventually becomes widely available, but early information about candidate quality can only be reliably transmitted along links of a network. (When Markets Unravel: Social Networks, Information Transmission, and the 'Hiring Frenzy' older version here.)

Another of his papers tackles the question of cooperation in repeated games, where the possible interactions are constrained by a network, and he asks which buyer-seller network structures will support persistent cooperation (where sellers have an opportunity to cooperate by shipping a high quality good, or to defect by shipping a low quality good). It’s a hard problem, and (in a third paper) he and a coauthor invent models and tools to deal with it (in a large-network framework), that allow him to turn some difficult non-monotonic relationships among networks into well behaved statements about the value of links. (Community Structure and Market Outcomes: Towards a Theory of Repeated Games in Networks )

Itay will be an assistant professor of economics at Brown next year.

Welcome to the club, Itay.

Liver exchange

Living Donor Exchange Poses New Option for Liver Transplantation "Two major transplant centers in Hong Kong and South Korea released results from their paired donor exchange programs for living donor liver transplantation (LDLT). A single paired exchange, performed by the Hong Kong team under emergency circumstances, was a success. The Korean team reported 16 donor exchanges conducted over a 6-year period were successful. Full details of this novel approach to organ transplantation appear in the April issue of Liver Transplantation."

And here are the two papers and abstracts: 

  Paired Donor Interchange to Avoid ABOIncompatible Living Donor Liver Transplantation, by See Ching Chan, Chung Mau Lo, Boon Hun Yong, Wilson J. C. Tsui, Kelvin K. C. Ng, and Sheung Tat Fan, Queen Mary Hospital, University of Hong Kong, Hong Kong, China 

"We report an emergency paired donor interchange living donor liver transplant performed on January 13, 2009. The 4 operations (2 liver transplants) were performed simultaneously. The aim was to avoid 2 ABO-incompatible liver transplants. One recipient in acute liver failure underwent transplantation in a high-urgency situation. The abdomen of the other recipient had severe adhesions from previous spontaneous bacterial peritonitis that rendered the recipient operation almost impossible. The ethical and logistical issues are discussed. Approaches adopted in anticipation of potential adverse outcomes are explained in view of the higher donor and recipient mortality and morbidity rates in comparison with kidney transplantation." Liver Transpl 16:478-481, 2010 

  Exchange Living Donor Liver Transplantation to Overcome ABO Incompatibility in Adult Patients, by Shin Hwang, Sung-Gyu Lee, Deok-Bog Moon, Gi-Won Song, Chul-Soo Ahn, Ki-Hun Kim, Tae-Yong Ha, Dong-Hwan Jung, Kwan-Woo Kim, Nam-Kyu Choi, Gil-Chun Park, Young-Dong Yu, Young-Il Choi, Pyoung-Jae Park, and Hea-Seon Ha, Asan Medical Center, University of Ulsan College of Medicine, Seoul, Korea 

"ABO incompatibility is the most common cause of donor rejection during the initial screening of adult patients with end-stage liver disease for living donor liver transplantation (LDLT). A paired donor exchange program was initiated to cope with this problem without ABO-incompatible LDLT. We present our results from the first 6 years of this exchange adult LDLT program. Between July 2003 and June 2009, 1351 adult LDLT procedures, including 16 donor exchanges and 7 ABO-incompatible LDLT procedures, were performed at our institution. Initial donor-recipient ABO incompatibilities included 6 A to B incompatibilities, 6 B to A incompatibilities, 1 A to O incompatibility, 1 A+O (dual graft) to B incompatibility, 1 O to AB incompatibility, and 1 O to A incompatibility. Fourteen matches (87.5%) were ABO incompatible, but 2 (12.5%) were initially ABO-compatible. All ABO-incompatible donors were directly related to their recipients, but 2 compatible donors were each undirected and unrelated directed. After donor reassignment through paired exchange (n = 7) or domino pairing (n = 1), the donor-recipient ABO status changed to A to A in 6, B to B in 6, O to O in 1, A to AB in 1, A+O to A in 1, and O to B in 1, and this made all matches ABO identical (n = 13) or ABO-compatible (n = 3). Two pairs of LDLT operations were performed simultaneously on an elective basis in 12 and on an emergency basis in 4. All donors recovered uneventfully. Fifteen of the 16 recipients survived, but 1 died after 54 days. In conclusion, an exchange donor program for adult LDLT appears to be a feasible modality for overcoming donor-recipient ABO incompatibility."Liver Transpl 16:482-490, 2010. V

Organ trafficking: a black market for kidneys

Israeli police arrest suspected black market brokers, after complaints were made by unpaid donor/sellers.

Reserve general suspected of organ trafficking: Six arrested in organ-trafficking scandal after donors complain they were not paid for their kidneys
"Police have uncovered a large organ-trafficking ring that made its members millions, a court cleared for publication Wednesday.
...
"According to the police, the ring members advertised online offering people waiting for years for a kidney transplant an alternate solution, for the price of $140,000.
Other online ads made offers of $10,000 for kidneys. To those who remained hesitant, the suspects allegedly offered up to $100,000. However the donors were never paid.
Police were given their first clue when a 50-year old woman from Nazareth issued a complaint saying she had donated a kidney due to financial difficulties, for which she expected to receive $100,000. She said she was called in to undergo a series of tests and then flown to Azerbaijan with another donor, where she was relieved of her kidney.
Upon returning to Israel, she said, she asked those who had sent her for the money but never received it. Police launched an investigation and meanwhile received another complaint, this time from an 18-year old boy. He said he was promised $80,000 and flown to the Philippines to donate his kidney.
Superintendant Aharon Galor told Ynet, "We ran an undercover investigation and were shocked by the proportions of this. Despite the few complaints we received, we learned that there are many people willing to sell a kidney for just $10,000. These are people who have severe financial difficulties, for whom such a sum is a dream come true." "

More details here: Israel police uncovers organ trafficking ring in north
""The ring is operating throughout Israel and not only in the north, and appeals to the public through local media and internet," a police official said. "The organ traffickers somehow receive details about potential transplant candidates and they offer them their services," he said.
"The investigators said that the traffickers usually demand around 120,000 dollars for a kidney transplant. While the donors, the majority of which are in serious financial troubles, are taken advantage of and receive around 10,000 dollars. Some of them get even smaller sums, and some do not receive any money at all.
"The donors sign a contract and fill out fraudulent affidavits claiming a family connection between the donor and the recipient - a requirement in the countries where the surgeries take place.
"Afterwards, the donors undergo medical examinations where they are categorized by blood types and other medical conditions, and are then flown to countries in Eastern Europe, the Philippines, and Ecuador.
"There, the donors undergo surgery to extract their kidney, and shortly afterwards return to Israel without any medical documentation, many times suffering from medical complications. "

Update on economics job market scramble

Registration on the 2010 Economics Job Market Scramble for new Ph.D.s is now closed, and those who have registered will be able to view the site for another week.

67 employers registered 71 positions this year (with 24 of those employers choosing to remain invisible to viewers). There's no obvious difference between the visibles and the invisibles (e.g. the visibles include 14 universities with graduate programs, the invisibles include 11).

374 job candidates registered, in line with previous years (there were 361 and 395 in 2008 and 2009).

All this is from the revised version of our paper on the job market:
Peter Coles, John Cawley, Phillip B. Levine, Muriel Niederle, Alvin E. Roth, and John J. Siegfried , " The Job Market for New Economists: A Market Design Perspective," revised April 6, 2010, forthcoming in Journal of Economic Perspectives, Summer 2010.The current version of that paper can be found here .

Good luck to all those still on the market.

The first kidney exchange in the U.S., and other accounts of early progress

The Student BMJ (a student run affiliate of the British Medical Journal) has an article interviewing the pioneering surgeons who conducted the first kidney exchange in the U.S., in 2000. (It's gated, but you can register for free.)

Anthony P Monaco and Paul E Morrissey: a pioneering paired kidney exchange
Transplant surgeons Anthony P Monaco and Paul E Morrissey performed the first paired kidney exchange in the United States
By: Prizzi Zarsadias
Published: 24 March 2010, Cite this as: Student BMJ 2010;18:c1562

The article is in interview form. Some highlights:
"When two patients found they were ABO incompatible with their live kidney donors it seemed that a long wait on the organ donor list awaited them. But by coincidence the donors were a match for each other’s recipient. Rather than lose this chance for both patients to receive a live kidney donation Anthony P Monaco and Paul E Morrissey saw an opportunity, and in 2000 they performed the first paired kidney donation in the United States. "

How did the first paired kidney donation come about?
Paul E Morrissey: We knew about paired donation from an experience in Korea. We had encountered articles about paired donation. Then these pairs simultaneously presented to us; it just clicked that we could exchange the donors. I wouldn’t attribute the idea to myself or Dr Monaco but to the entire team. We discussed it with 15 of our doctors and nurses, social workers, and various other people, and we agreed that it would be something that we would propose to the family.

How did the patients in the first exchange fare?
PEM: The surgeries were uneventful. One recipient had great kidney function. The second had recurrence of the original disease and a bad acute rejection shortly after the transplant and went back onto dialysis several weeks after the transplant. One outcome was not good. The other patient did fantastically. Any time that a living donation doesn’t work is sad. And in this circumstance, to have had a child make a donation for a parent and to have it work out for the person she donated to but not work out for the parent was sad and unfortunate.

What was the worst case scenario?
PEM: This would be close to it; the success rate for a live kidney donation is in the neighbourhood of 98% or so. This might happen once in every 50. It’s an extremely unusual circumstance for any living donation, and in this setting it adds to the unhappiness. There was a lot of hand holding for the recipient with the failed kidney but also for the donor. There was a lot of follow-up on a longitudinal basis. They are both alive and well today but who knows exactly what emotion they harbour, and I hope that the other patient is enjoying the outcome of her operation.
APM: The worst case scenario for any living transplant would be that the recipient or donor die because of surgery. We haven’t seen that, but that’s the risk in this scenario. We’ve had recipients who have died a week or two later, but that has not happened with swap transplants.
PEM: We inform the patients more of the adverse outcomes. It was, of course, at the forefront of our minds when we proceeded the second time.

During the first exchange did you envisage the technique’s success?
APM: We did not envision it, but we were not surprised that it has grown because it works well. There is a natural evolutionary process to extend it into other situations. We do swaps that involve not just ABO incompatibility; we also swap kidneys between pairs that are incompatible because of HLA antibodies. We are also currently working on a five-way swap.
PEM: The credit obviously goes to countless groups throughout the country that have pushed it forward. In particular the group in our organ procurement organisation, the New England Organ Bank, has really been a leader in taking this forward nationally but at the time that we did this, we didn’t have thoughts about expanding it beyond the reaches of our own programme. I think that they’ll continue to grow out of necessity.

The article begins with these biographical details:
Anthony P Monaco
Peter Medawar professor of transplantation surgery, Harvard University, emeritus director of the Beth Israel Deaconess Harvard Medical Center Transplant Program, and director of the Rhode Island Hospital Transplant Services
Biography—After graduating from Harvard Medical School in 1956 his career has spanned five decades. In that time he has published more than 470 papers and has held the post of editor of Transplantation for 32 years until 2001 and has been the special features editor for the same journal ever since. He is also a trustee of the New England Organ Bank.

Paul E Morrissey
Associate professor of surgery and transplant surgeon at Rhode Island Hospital and assistant medical director for the New England Organ Bank
Biography—Trained at the University of Massachusetts and held residencies and research fellowships at Yale and Harvard Medical Schools. He has been a transplant surgeon at Rhode Island Hospital since 1997 and has been surgical director of the Division of Organ Transplant since 2002. He has been awarded many honours, including the Thomas Murray award from the Rhode Island Organ Donor Awareness Coalition. "

As the article indicates, an earlier exchange had been carried out in S. Korea. Another country that has been active in kidney exchange is Holland, and a recent report of their experience is in the April 2010 issue of the American Journal of Transplantation: "Altruistic Donor Triggered Domino-Paired Kidney Donation for Unsuccessful Couples from the Kidney-Exchange Program" by Roodnat, J. I.; Zuidema, W.; van de Wetering, J.; de Klerk, M.; Erdman, R. A. M.; Massey, E. K.; Hilhorst, M. T.; IJzermans, J. N. M.; Weimar, W.

The New England Program for Kidney Exchange (the institutional descendent of that first U.S. exchange by Monaco and Morrissey) maintains a page listing Kidney Exchange:A Chronology of Scientific Contributions (scroll to the bottom of that page).

While I'm on the subject of important firsts, donating a kidney became much easier with the introduction of laproscopic kidney nephrectomies for donor kidneys (taking the kidney out via a small incision instead of a big one). Here's the article by Lloyd Ratner et al. reporting the first one:

Laparoscopic live donor nephrectomy.
Ratner LE, Ciseck LJ, Moore RG, Cigarroa FG, Kaufman HS, Kavoussi LR., Transplantation. 1995 Nov 15;60(9):1047-9.

"A laparoscopic live-donor nephrectomy was performed on a 40-year-old man. The kidney was removed intact via a 9-cm infraumbilical midline incision. Warm ischemia was limited to less than 5 min. Immediately upon revascularization, the allograft produced urine. By the second postoperative day, the recipient's serum creatinine had decreased to 0.7 mg/dl. The donor's postoperative course was uneventful. He experienced minimal discomfort and was discharged home on the first postoperative day. We conclude that laparoscopic donor nephrectomy is feasible. It can be performed without apparent deleterious effects to either the donor or the recipient. The limited discomfort and rapid convalescence enjoyed by our patient indicate that this technique may prove to be advantageous."

Sniping in auctions with substitutes

On an auction site like eBay, many copies of the same good may be on offer for different auctions. A new sniping site, goSnipe, allows bidders to specify a group of auctions on which to submit last minute bids, one at a time, but to stop when the desired purchase is made.


Here's some research on bid sniping, and the underlying game theory.

Repugnant transactions in New Zealand: Easter Sunday sales

The NZ Herald reports on Illegal Trading.

"The number of shops found to be trading illegally over the Easter weekend appears to be similar to last year, the Department of Labour says. The Department will consider the prosecution of 38 retailers after 19 were caught trading on Good Friday and another 19 on Easter Sunday.

"The issue of Easter trading hours remained a contentious issue this year, with business owners calling for more clarity on the laws. Auckland business advocate Cameron Brewer, who was lobbying this year for changes to the law, said "confusion reigned high" as some towns were banned from trading while others were not. Licensed premises, cafes, gardening and hardware stores were also a problem, he said. "Cafes can open if they have ready-to-eat food, but what is ready-to-eat food? More and more hardware stores, most of which have big gardening departments, are opening and facing $1000 fines, even though gardening shops can legally open on Easter Sunday. "This weekend there has been more confusion and frustration than ever before around Easter trading laws. It can't go on any longer."

Work hours of surgical residents

The culture is changing to comply with the law, but it's hard.

For doctors, a matter of time: MGH residents cut back to 80-hour weeks, but with mixed feelings

"The hospital had a wake-up call last year, when a national accrediting agency put the program on probation for violating patient-protection rules that limit trainees’ work hours. Some junior surgeons, called residents, had been staying too late because they didn’t want to sign over their very sick patients to other doctors, out of a combination of duty to patients, work ethic, and unspoken peer pressure.

"Now, say senior surgeons and residents alike, the program is in complete compliance with the rules that require trainees to average no more than 80 hours of work a week and have 10 hours off between shifts."


The story makes the case that residents sometimes need and want to work long hours.


A related story about sleeplessness makes the case that it would be good both for patients and young docs if they got enough sleep: At Midnight, All the Doctors…

Presumed consent and deceased donor organ donation

Kim Krawiec writes: "Duke sociologist (and Crooked Timber blogger) Kieran Healy visited my Taboo Trades and Forbidden Markets seminar this week to discuss his book, Last Best Gifts (University of Chicago Press, 2006) -- a study of the social organization of exchange in human blood and organs – as well as his research on presumed consent laws (See, Do Presumed Consent Laws Raise Organ Procurement Rates? DePaul Law Review, 55:1017–1043 (2006)) (PDF). Healy has also written several other articles about gift and market exchange in human blood and organs and, in addition, studies the moral order of market society (See, for example, Marion Fourcade and Kieran Healy, Moral Views of Market Society. Annual Review of Sociology 33:285–311 (2007) (PDF.))"
...
[The article on presumed consent] "is a comparative study of rates of cadaveric organ procurement in seventeen OECD countries between 1990 and 2002. Those in the United States (and other countries, including the UK) concerned with insufficient cadaveric donor rates frequently advocate a switch to a presumed-consent legal regime (as opposed to the US informed consent regime), as a quick fix to the problem of under-supply. This seems logical enough – in other contexts we have reason to believe that alterations to the default rule, and particularly from an opt-in to an opt-out regime, may meaningfully impact behavior. This is especially plausible when the law functions as some sort of signaling device about societal norms or when, as in the case of organ donation, choosing involves scenarios – death – that one prefers not to contemplate, perhaps causing inertia.
But in the case of cadaveric organ donation an additional argument is typically put forward in favor of presumed consent: the removal of next of kin from the decision-making process. Though the Revised Uniform Anatomical Gift Act specifies that family consent or concurrence is not required, the reluctance of procurement organizations in the U.S. to proceed with organ retrieval against next-of-kin wishes has been generally recognized.
Yet Healey finds that presumed consent laws do not make a material difference to the procurement rate. Importantly, presumed consent laws typically do not remove the next of kin from the procurement process. Although presumed-consent countries have somewhat better procurement rates on average than informed-consent countries, Healy concludes that this is not because of any direct effect of the law on individual choices. Instead, improved donation rates appear driven by substantial investment in the logistics of organ procurement – better training, clear delegation of responsibility, and a strong presence in hospitals, for example. "

Fortune-telling is repugnant in Saudi Arabia (and a capital crime)

This headline caught my eye this morning: Lebanese Not to Be Beheaded Friday for Witchcraft

"A Lebanese man condemned to death for witchcraft by a Saudi court will not be beheaded Friday as had been expected, his lawyer said.
Attorney May al-Khansa said Lebanon's justice minister told her that her client, Ali Sibat, will not be executed in Saudi Arabia on Friday -- the day executions are typically carried out in the kingdom after noon prayers.
She said it is still unclear whether the beheading had been waived or only postponed. "
...
"Sibat, a 49-year-old father of five, made predictions on an Arab satellite TV channel from his home in Beirut.
He was arrested by the Saudi religious police during his pilgrimage to the holy city of Medina in May 2008 and sentenced to death last November for witchcraft.
The Saudi justice system, which is based on Islamic law, does not clearly define the charge of witchcraft.
Sibat is one of scores of people reported arrested every year in the kingdom for practicing sorcery, witchcraft, black magic and fortunetelling. The deeply religious authorities in Saudi consider these practices polytheism. "

(Presumably the ability of fortune tellers to predict the future is imperfect, since otherwise Mr Sibat might have skipped this trip.)

Update 4/24/10: "But fraud, while a crime, is not punishable by death, said Mr. AlGasim, the retired judge. Only actual sorcery is a crime.
“You have to differentiate between acts that cheat or deceive people for money, which deserve to be punished, and dealing with magic,” he said. “There is no mechanism to prove it, and any confession is open to doubt, especially if someone confesses in prison.” "

Renal data: kidney exchange

A 2009 report of the United States Renal Data System includes this on the early growth of kidney exchange, through 2007.


"Living Donor Paired Donation was the only subgroup of living donor transplants that increased between 2006 and 2007, rising 125 percent to reach 216 transplants. Transplants from paired donations currently make up only 1 percent of transplants performed in the United States. The number of donations from living relations continues to decline, and is now 18 percent lower than the high observed in 2001. Donations from spouses or distant relatives have remained fairly constant. "

From Page 282 of the 2009 report, reporting on the rise from 96 recorded kidney exchange transplants in 2006 to 216 in 2007. http://www.usrds.org/2009/pdf/V2_07_09.PDF

Transactions that are repugnant in Dubai

Britons sentenced to a month in prison for kissing in Dubai restaurant "At the appeal hearing on Sunday, their defence lawyer Khalaf al Hosany said the couple admitted kissing each other on the cheek but denied any intention to break the law. “It’s part of their culture to kiss on cheeks as a greeting,” he told the judge. But their pleas of not guilty to indecency were rejected and they were sentenced to a month in prison followed by deportation. They were also fined 1000 dirham (180 pounds) for being in a public place after consuming alcohol – an offence in Dubai, though drinking alcohol itself is not. "

Steamy Text Messages Lands Couple in Dubai Jail "A string of steamy text messages has landed an Indian couple in a Dubai jail. The conviction reported Wednesday said the sexual content of the texts suggested the unnamed pair planned to ''commit sin'' -- referring to an extramarital affair, which is illegal under Emirati law. The two Indians, who worked as cabin crew for Emirates airlines, were sentenced to three-month in jail, said authorities. "

Update (April 4): Dubai Jail Sentence Upheld for UK Kissing Couple

Blog on school choice by Atila Abdulkadiroglu

Atila Abdulkadiroglu at Duke has a new blog called
School Choice: News and developments from schools and economics that matter to parents and districts.

His first two posts have been on the debate about choice in Wake County.

Harvard's mysterious Z-list

One of the more unusual routes to admission at Harvard is the Z-list, which the Crimson writes about this week. Z-Listed Students Experience Year Off: Undergrads take mandatory gap year before coming to Harvard

Last year I wrote about it here: Harvard's "Z-list," waitlist admission with a difference .

It's that mandatory year off that makes the Z-list unusual (students who enter from the Z-list must delay a year and can't attend another school while they wait).

The mystery is to whom this admissions option is offered, and who chooses to accept. There's some signaling going on here, and some sorting.

Kidney exchange at NEPKE

The Sunday Globe has a good story about a recent three way kidney exchange at the New England Program for Kidney Exchange. One of the donors was a prominent local nephrologist.
Harvesting hope from a giving tree: The story of three couples, three kidneys and one goal: life.

It's a well written article that illustrates both some of the logistical complexities of a three way exchange, and some of the personal details of the six participants.

I'm always glad to see three way exchanges, in part because for a while it seemed like the logistical difficulties would preclude them.

Here are the papers which helped us make the case in New England:

Saidman, Susan L., Alvin E. Roth, Tayfun Sönmez, M. Utku Ünver, and Francis L. Delmonico, " Increasing the Opportunity of Live Kidney Donation By Matching for Two and Three Way Exchanges," Transplantation, ,81, 5, March 15, 2006, 773-782.

Roth, Alvin E., Tayfun Sonmez , and M. Utku Unver, "Efficient Kidney Exchange: Coincidence of Wants in Markets with Compatibility-Based Preferences," (May, 2005. NBER Paper w11402), American Economic Review, 97, 3, June 2007, 828-851. (And here is the online appendix with some of the proofs.)

One of the curious things about publishing in both economics and medical journals is that the paper which came first was published second...the AER takes a bit longer than Transplantation.

The market for matzot

The Passover holiday is a time to think about matzah, whose plural is matzot. A little market history: Thoroughly Modern Matzah

"In 1888, Behr Manischewitz, an astute and pious immigrant from East Prussia, opened a matzah factory in Cincinnati. Soon facing local competition, he cut costs, improved quality, and burnished his image. His factory introduced the first square matzot, unmistakable products of industrial automation. Advertising his technology to English readers, he simultaneously won rabbinic endorsements in Yiddish and Hebrew periodicals.
Over time, Manischewitz and his competitors—Streit, Horowitz-Margareten, Goodman—created a distinctively American matzah for a a distinctively American Passover: a holiday coming to be seen less as the birth of a particular nation than as a celebration of freedom in general."

Some further background here: Those Magnificent Men and Their Matzah Machines*

Chag Pesach sameach, y'all. Let's all try to excel at being free.

School choice in North Carolina

"A bitter fight over school choice in North Carolina grabbed national headlines in recent months," says a news release from Duke University, which notes that Duke is fortunate in having a local expert on school choice, in Atila Abdulkadiroglu.

News Tip: Economic Model Can Help Diversify U.S. Schools While Maintaining Community School Preferences, Expert Says
"The use of economic models to design flexible assignment policies can help school systems achieve racial and socioeconomic diversity while also keeping parents who prefer neighborhood schools happy, says a Duke University professor who researches the economics of education.
A key component is to incorporate parental preferences in school assignments “to the maximum extent possible,” says Atila Abdulkadiroglu, a professor in Duke’s Department of Economics."

Here's the background story: Duke Professor Says Diversity, Parental Choice Can Work Together.
"Earlier this week, the Wake County School Board voted 5-4 to end the district's diversity policy by stopping the practice of busing students to achieve socio-economic balance, and instead switch to neighborhood-based assignments."

Usury and anti-semitism

From Ira Stoll's review of Capitalism and the Jews, by Jerry Z. Muller, Princeton University Press:

"The book by Mr. Muller, a professor of history at Catholic University, consists of a short introduction and four chapters. It's the first chapter, "The Long Shadow of Usury," that's the most enlightening.
"Usury was an important concept with a long shadow. It was significant because the condemnation of lending money at interest was based on the presumptive illegitimacy of all economic gain not derived from physical labor. That way of conceiving of economic activity led to a failure to recognize the role of knowledge and the evaluation of risk in economic life," he writes. "So closely was the reviled practice of usury identified with the Jews that St. Bernard of Clairvaux, the leader of the Cistercian Order, in the middle of the twelfth century referred to the taking of usury as 'Jewing'" says Mr. Muller."

China's theme park of dwarves

A Miniature World Magnifies Dwarf Life

Quotes reflecting opposing views of repugnance:

“I think it is horrible,” said Gary Arnold, the spokesman for Little People of America Inc., a dwarfism support group based in California. “What is the difference between it and a zoo?” Even the term “dwarf” is offensive to some; his organization prefers “person of short stature.”

"But there is another view, and Mr. Chen and some of his short-statured workers present it forcefully. One hundred permanently employed dwarfs, they contend, is better than 100 dwarfs scrounging for odd jobs. They insist that the audiences who see the dwarfs sing, dance and perform comic routines leave impressed by their skills and courage."

HT: Zhenyu Lai and Aytek Erdil

School choice is serious business: litigation and politics in NYC and Chicago

In NYC, high school admissions have been delayed by a lawsuit motivated by the city's effort to close some schools: High school letters delayed.

"March 24 Update — Chancellor Joel Klein released a statement on the delay of high school letters today. “I understand you are anxious to receive this information, and rest assured, the Department of Education is doing everything possible to make the matches available soon,” it reads.
The statement acknowledges that the delay is being caused by the NAACP/teachers union lawsuit, but does not comment on the lawsuit or provide an estimated date for the letters’ release. It does state that the DOE will issue another update when it “knows more.”
March 23 — Eighth-graders anxiously awaiting receipt of high school acceptances letters tomorrow will have to be patient a while longer. How much longer is not clear. The letters, due to be distributed to students on March 24, are still being held up by court order because of a lawsuit filed against the Department of Education by the NAACP and the teachers union. The lawsuit charges that the DOE acted illegally in moving to close 19 schools."

Update: March 26, Judge Blocks Closing of 19 New York City Schools. The city will appeal. In the meantime, "The lawsuit had held up some 85,000 high school acceptance letters that were due out on Wednesday. The city’s interpretation of the ruling is that it clears the way for all those letters to go out next week, although the plaintiffs disagree.
Students were required to state their high school preferences in early December, around the time the department began to reveal which schools it wanted to close. About 8,500 applied to the schools proposed for closing and were notified later that they could not attend them. Those students will receive acceptance letters from other schools next week, along with a note saying that they could revert to their original choice if the school remains open. "


In Chicago, school assignments involved some high powered political wheeling and dealing: In Chicago, Obama Aide Had V.I.P. List for Schools.

HT: Parag Pathak

Time to scramble, if still on the economics job market

If you are still on the market for new economics Ph.D.s, now is the time to register for the 2010 Job Market Scramble

Registration is open now, and remains open only until March 30, this coming Tuesday. Don't wait until the last day to do it; not only does that make it more likely that you will forget, but I'm not sure when on Tuesday the signup might go away. If you aren't currently holding an offer you might accept this weekend, or expecting one imminently, and if you are still looking for a job this year, I would recommend signing up now.

The scramble site will be open for viewing (candidates can view jobs, and employers can view candidates) from April 1-12.

The Scramble is discussed on pages 13-15 of our recently revised paper
Peter Coles, John Cawley, Phillip B. Levine, Muriel Niederle, Alvin E. Roth, and John J. Siegfried , " The Job Market for New Economists: A Market Design Perspective," revised March 19, 2010, forthcoming in Journal of Economic Perspectives, Summer 2010.
The current version of that paper can be found here (and I'll update this link when the final version becomes available, which should have some ex-post description of this year's scramble numbers).

Random matchings

Random matchings are the subject of two new papers.

The first (not in chronological order:) IMPLEMENTING RANDOM ASSIGNMENTS: A GENERALIZATION OF THE BIRKHOFF-VON NEUMANN THEOREM by ERIC BUDISH, YEON-KOO CHE, FUHITO KOJIMA, AND PAUL MILGROM

Abstract. "The literature on random mechanisms often describes outcomes incompletely as "random assignments" expressing the expected number of objects of each type assigned to different agents and a set of feasibility constraints that a pure assignment must satisfy. We provide a necessary and sufficient condition (the "bihierarchy" condition) for the set of constraints to have the property that if the random assignment satisfies them, then it is implementable by a lottery over feasible pure assignments. Our theorem maximally generalizes the celebrated Birkhoff-von Neumann theorem. We also provide an algorithm to implement any such random assignment. Several applications are described, including (i) single-unit random assignment, such as school choice; (ii) multi-unit random assignment, such as course allocation and fair division; and (iii) twosided matching problems, such as the scheduling of inter-league sports matchups. The same method also finds applications outside economics, generalizing previous results on the minimize makespan problem in the computer science literature."

The second (no significance to the ordering aside from when I read them) is "An Equivalence result in School Choice" by Jay Sethuraman
ABSTRACT: "The main result of the paper is a proof of the equivalence of single and multiple lottery mechanisms for the problem of allocating students to schools in which students have strict preferences and the schools are indifferent. This solves a recent open problem proposed by Pathak, who was motivated by the practical problem of assigning students to high schools in New York City. In proving this result, a new approach is introduced, that simplifies and unifies all the known equivalence results in the house allocation literature. Along the way, two new mechanisms—Partitioned Random Priority and Partitioned Random Endowment—are introduced for the house allocation problem. These mechanisms generalize several known and well-studied mechanisms for the house allocation problem and are particularly appropriate for many-to-one versions of the problem, the school choice problem being the most prominent."

(And here's a link to the earlier paper by Parag Pathak: Lotteries in Student Assignment: The Equivalence of Queueing and a Market-Based Approach)

Misc. kidney exchange links

The growth of kidney exchange is reflected in the following miscellany of stories.

Trading for the Perfect Match: MassGeneral Hospital for Children patient receives kidney through a four-way kidney swap arranged by the New England Program for Kidney Exchange.

At the University of Maryland: Paired Kidney Exchange: A Major Breakthrough in Kidney Transplantation

Doctor: ‘Living my dream’ Kidney surgeon Dr. J. Keith Melancon returns to speak at his alma mater, the U. of Louisiana.
"Melancon was in town as the featured speaker of the university’s Black History Month kick-off celebration Monday evening. Before the event, Melancon visited with students at Comeaux High, South Louisiana Community College and ULL.
Melancon now has a role in African American history. He said he recognizes that his story is an “American story.”
“This little black boy from Lafayette, Louisiana, overcoming the obstacle of growing up young and black in America,” he said. “I am proud of my heritage of coming from here.”
Now, at 41, Melancon is director of the kidney and pancreas transplant program at Georgetown University Hospital. He said he made the move from Baltimore to make a difference in metropolitan Washington, D.C., where there’s a large minority population and a high incidence rate of kidney disease.
“If you’re African-American in this country, you’re four times more likely to have kidney disease,” Melancon said."

see here for a chart on the 13-way set of three kidney exchange chains each started by an altruistic donor,

And this comment by Sally Satel and Mark Perry on how many more donors might be available if they could be legally compensated: More kidney donors are needed to meet a rising demand

Kidney exchange in Pittsburgh
"McGowan Institute for Regenerative Medicine faculty member Ron Shapiro, MD, is director of the kidney, pancreas, and islet transplant program at the UPMC Thomas E. Starzl Transplantation Institute and professor of surgery and Robert J. Corry Chair in Transplantation Surgery at the University of Pittsburgh School of Medicine. On December 10, Dr. Shapiro and a team of UPMC doctors participated in UPMC’s first kidney paired donation in collaboration with Temple University Hospital and the Paired Donation Network. The couples, a husband and wife from Pittsburgh and two sisters from Philadelphia, donated kidneys to each others’ loved ones in a two-way surgical swap. Such paired exchanges are still uncommon. All donors and recipients are recovering well.
...This exchange was facilitated by the Center for Organ Recovery and Education (CORE) and the Gift of Life".

and in CA: UC Davis Medical Center completes four kidney transplants in two days using paired exchange
"(SACRAMENTO, Calif.) — Using the revolutionary new approach to kidney transplants known as paired exchange, four patients have received live-donor kidney transplants through the UC Davis Kidney Transplant Program."

and in Philadelphia: Her one kidney changed four lives

meanwhile, mixed news from Europe:
EU want to impose ban on altruistic, pooled and paired kidney donations.
while in Spain things seem to be going the other way:
Donar órganos en vida a desconocidos será legal (ht Flip Klijn)
Here's a summary.

Transplant ethics

Two stories reflect different aspects of current debates about transplantation, and who are appropriate recipients, and donors.

Transplant tourism poses ethical dilemma for US doctors

"In the current case, a 46-year-old Chinese accountant (HQ) was placed on the UNOS transplant registry with a Model for End Stage Liver Disease (MELD) score of 18 that increased to 21 while on the candidate waitlist for over a year (MELD scores range from 6 for those least ill through 40 for those most sick). HQ then traveled to the People's Republic of China (PRC) and was transplanted two weeks after arrival. After transplantation, HQ returned to the Mount Sinai program requesting follow-up care, which was provided. HQ then developed biliary sepsis requiring hospitalization and re-transplantation seemed to be the only viable option.

"While the patient was a medically suitable candidate, team members disagreed if it were indeed, morally right to provide him with a transplant," said Thomas Schiano, M.D., one of the case clinicians and lead author of this study. Ultimately, the transplant team proceeded with a liver transplant for HQ and he is currently doing well. "Our consensus to transplant was based on the relevant principles of medical ethics—non-judgmental regard, beneficence, and fiduciary responsibility," added Dr. Schiano. " (emphasis added)

"The Dilemma and Reality of Transplant Tourism: An Ethical Perspective for Liver Transplant Programs." Thomas D. Schiano, Rosamond Rhodes. Liver Transplantation; Published Online: January 26, 2010 (DOI: 10.1002/lt.21967); Print Issue Date: February 2010.

Project to get transplant organs from ER patients raises ethics questions
"The practice could backfire by making an already skeptical public less likely to designate themselves as organ donors, several experts said. "

Reserve prices in ad auctions: a field experiment by Ostrovsky and Schwarz

Reserve Prices in Internet Advertising Auctions: A Field Experiment by Michael Ostrovsky and Michael Schwarz.

Abstract
"We present the results of a large field experiment on setting reserve prices in auctions for online advertisements, guided by the theory of optimal auction design suitably adapted to the sponsored search setting. Consistent with the theory, following the introduction of new reserve prices revenues in these auctions have increased substantially."


And, from the introduction:
"Reserve prices in the randomly selected "treatment" group were set based on the guidance provided by the theory of optimal auctions, while in the "control" group they were left at the old level of 10 cents per click. The revenues in the treatment group have increased substantially relative to the control group, showing that reserve prices in auctions can in fact play an important role and that theory provides a useful guide for setting them. This increase is especially pronounced for keywords with relatively high search volumes, for keywords in which the theoretically optimal reserve price is relatively high, and for keywords with a relatively small number of bidders."...

"Our paper makes several contributions relative to [earlier] studies. First, it analyzes a much larger and economically important setting, with thousands of keywords and millions (and potentially, given the size of the online advertising industry, billions) of dollars at stake. Consequently, many of the bidders in this setting spend considerable time and resources on optimizing their advertising campaigns. Second, the reserve prices in the experiment are guided by theory, based on the estimated distributions of bidder values. To the best of our knowledge, there are no other papers describing direct practical applications of the seminal results of Myerson (1981) and Riley and Samuelson (1981). Third, unlike the previous studies, the benchmark in our analysis is not a zero reserve price, but the existing reserve price set by the company after a long period of experimentation."


In the conclusion they say that setting optimal reservation prices reduces ads shown by about one per search, but increases search revenue by almost 3%, which is a big deal when multiplied by the enormous numbers of searches.

Congressional briefing, postscript

On March 15, 2010 I gave a 15 minute presentation as part of a Congressional Briefing on the usefulness of Economics (particularly economic research supported by the NSF). Here are my slides: Improved Markets for Doctors, Organ Transplants and School Choice. (My talk focused on how early NSF-supported game theory research had led to recent developments in market design.)

The slides take a little while to load, since they contain a few photos. Speaking of photos, afterwards there were some photo opportunities, and I was happy to be included in the one above with my new Senator from MA, Scott Brown, who I wish the very best of luck in his demanding new job.

Signaling and hiring: one law recruiter's opinion

From the Faculty Lounge: Tim Zinnecker writes

"Speaking solely for myself (and not fellow committee members or my law school institution), I hope we place a greater burden on candidates to prove a genuine interest in relocating, before we start the courtship. It can be frustrating (not only for law schools, but for other candidates who get "bumped") when, after the time and expense of a flyback, a candidate declines, citing "spousal relocation phobia." Some candidates disclose geographic restrictions on the FAR forms. Thank you. Some candidates decline the flyback, citing geographic concerns. Thank you (although why did you accept the screening interview?). But candidates who accept the flyback, receive an offer, and then disclose that the spouse won't relocate? Very frustrating."

Market design posters

I'm giving a public talk on market design in Toronto on March 22, and Martin Osborne writes:

"Hi Al. We're making preparations for your visit. We've created some posters that you may be interested to see http://www.economics.utoronto.ca/osborne/poster1.pdf
http://www.economics.utoronto.ca/osborne/poster2.pdf
http://www.economics.utoronto.ca/osborne/poster3.pdf
http://www.economics.utoronto.ca/osborne/poster4.pdf
http://www.economics.utoronto.ca/osborne/poster5.pdf
(#4 is a much bigger file than the others, because we are going to us it for the hard copies.)"

The pictures are great. To my eye, the market in poster 2 looks like the one in most need of some design...

Match Day!

This year's schedule for announcing the results of the resident match ends today, when most graduating medical students will learn where they have been matched.

Over the last few days, those who were not matched in the main match learned of this, so that they could "scramble" to match by the time that their colleagues would learn of their matches.

Here's this year's schedule:

March 15, 2010--Applicant matched and unmatched information posted to the Web site at 12:00 noon eastern time.
March 16, 2010--Filled and unfilled results for individual programs posted to the Web site at 11:30 a.m. eastern time.
Locations of all unfilled positions are released at 12:00 noon eastern time. Unmatched applicants may begin contacting unfilled programs at 12:00 noon eastern time.
March 18, 2010--Match Day! Match results for applicants are posted to Web site at 1:00 pm eastern time.

Next year this will all play out differently, since the NRMP has decided to organize a "managed scramble":

"The NRMP Board of Directors has voted to proceed with implementation of a "managed" Scramble for the 2012 Main Residency Match. Under the plan, unfilled positions must be offered and accepted through the NRMP R3 System during Match Week. Offers will be made every three hours Wednesday - Friday of Match Week, and applicants will be able to receive multiple simultaneous offers. Match Day will be moved from Thursday to Friday. Questions should be directed to nrmp@aamc.org."

Right now there is pressure on the number of residencies that can be funded, so there may not be as much problem with congestion as would otherwise be a concern. We'll have to wait until next year to find out. (I wasn't involved in this latest design discussion.)

Who would sell kidneys, if kidney sales were legal?

Not just the poor, according to a new (and sure to be controversial) study conducted by interviewing people at regional rail and urban trolley lines near Philadelphia.

The Annals of Internal Medicine has just published an article
Regulated Payments for Living Kidney Donation: An Empirical Assessment of the Ethical Concerns by Scott D. Halpern, Amelie Raz, Rachel Kohn, Michael Rey, David A. Asch, and Peter Reese.

It finds: "...participants' willingness to donate increased significantly as their risk for kidney failure decreased, as the payment offered increased, and when the kidney recipient was a family member rather than a patient on a public waiting list (P [lessthan] 0.001 for each). No statistical interactions were identified ...between payment and income (odds ratio, 1.01 [CI, 0.99 to 1.03]). The proximity of these estimates to 1.0 and narrowness of the CIs suggest that payment is neither an undue nor an unjust inducement, respectively. Alerting participants to the possibility of payment did not alter their willingness to donate for altruistic reasons (P = 0.40). "

The lead author, Scott Halpern, is at Penn, affiliated with the Center for Health Incentives.

Wiseguy Tickets

If I were planning to break the laws on ticket resales, I think I would refrain from calling my company Wiseguy Tickts: 4 Charged in Concert Ticket Resale Scheme

"Federal prosecutors in New Jersey said on Monday that four men operating under the name Wiseguy Tickets had broken into online sites, buying more than one million tickets to some of the country’s most popular musical and sporting events and then reselling them for more than $25 million in profit.
In its 43-count indictment, the prosecutors say the men built a computer network that created thousands of fake accounts and built a program that could outsmart the ticketing software that creates oddly shaped letters intended to require human verification.
The events affected by the scheme cut across a wide swath of the entertainment business, from Hannah Montana concerts to Broadway shows and New York Yankees playoff games. The verification systems of many major online ticket vendors, including Ticketmaster, Telecharge and Major League Baseball, were breached."

B2B finance

Page 14 of a recent report by Morgan Stanley focuses on The Receivables Exchange, about which I have posted previously. (The Morgan Stanley report emphasizes: " This is not a research report and was not prepared by Morgan Stanley research department. It was prepared by Morgan Stanley sales, trading, banking and other non-research personnel. Past performance is not necessarily a guide to future performance.") Here it is.

The report has some recent performance statistics, and says "The Receivables Exchange, a private company, started trading on November 18, 2008 to bring private capital to the market for SME [small/medium enterprise] credit. Via The Receivables Exchange, an SME can auction its receivables to the highest bidder(s) for a substantial advance rate. The Receivables Exchange provides straight-through processing and acts as collateral agent and servicer, using an innovative approach to mitigate default risk."

Here are my previous posts about the Receivables Exchange, which strikes me as quite an interesting venture in disintermediation of credit. (Full disclosure; I'm on their advisory board.)

New clearinghouse for new doctors in Scotland

There have been some changes in the SCOTTISH FOUNDATION ALLOCATION SCHEME, the program that matches new medical graduates to their first positions (which would be called residencies in the US) in Scotland.

Two features stand out in comparison to the American system (the NRMP).

First, employers may not submit preferences, but rather are all constrained to rank potential employees by their exam scores.

Second, couples cannot submit preferences over pairs of positions. Instead, each member of the couple submits a rank ordering of individual positions, and the algorithm combines these into a joint preference over pairs that is a function of the submitted rank order list and a table of compatibilities of positions.

"To accommodate linked applicants, a joint preference list is formed for each such pair, using their individual preference lists and the programme compatibility information. If such a pair, a and b, have individual preferences p1, p2, . . . , p10 and q1, q2, . . . , q10 respectively (with a the higher scoring applicant), then the joint preference list of the pair (a,b) is (p1,q1), (p1,q2), (p2,q1), (p2,q2), (p1,q3), (p3,q1), (p2,q3), (p3,q2), . . ., (p9,q10), (p10,q9), (p10,q10) (except that incompatible pairs of programmes are omitted)
In the main body of the algorithm, the members of a linked pair are handled together, so the match of the pair (a,b) to the programmes (p,q) will be accepted only if each of these programmes either has an unfilled place or a lower scoring applicant who can be displaced. A complication arises when one member x of a linked pair has to be withdrawn from a programme p because his/her partner was displaced from their current assigned programme. In this case, some other applicants may have been rejected by p because of the presence of x, and any such applicant a must be withdrawn from their current programme, if any, and have their best achievable preference reset to p. (A corresponding, but more complex reset operation is needed if a is a member of a linked pair). This reset operation thereby allows a further opportunity for applicant a to be matched to programme p.
The algorithm terminates when every single applicant and linked pair is either matched or has been rejected by, or displaced from, every entry in their preference list with no possibility of reconsideration by a programme that has had a withdrawal.
The final matching is stable for single applicants, as before, but also for linked pairs, in the sense that:
there can be no linked pair (a,b) of applicants who would prefer to be matched to compatible programmes (p,q), and at the same time, each of p and q has an unfilled place or an assigned applicant with a lower score than a and b respectively."

HT: Rob Irving, who has designed and implemented the algorithm.

Here are some related papers by members of the Scottish matching group.

Keeping partners together: algorithmic results for the hospitals/residents problem with couples by Eric J. McDermid and David F. Manlove in
Journal of Combinatorial Optimization, (2009)

R.W. Irving, D.F. Manlove and S. Scott, The stable marriage problem with master preference lists, Discrete Applied Mathematics vol. 156 (2008), pp. 2959-2977.

New school choice system in San Francisco

Board Approves New Student Assignment System for San Francisco Schools (now here)

Most of the last minute discussion was about what priorities different kinds of students will have at different kinds of schools. That is something that is likely to be adjusted from year to year. But the nice thing is that the underlying choice architecture will make it safe for parents to state their true preferences however the priorities are adjusted.

From the press release: "The choice algorithm was designed with the help of a volunteer team of market design experts who have previously been involved in designing choice algorithms for school choice in Boston and New York City. Volunteers from four prominent universities contributed to the effort, including Clayton Featherstone and Muriel Niederle of Stanford University, Atila Abdulkadiroglu of Duke University, Parag Pathak of MIT, and Alvin Roth of Harvard.
“We are pleased that the district has decided to adopt a choice architecture that makes it safe for parents to concentrate their effort on determining which schools they prefer, with confidence that they won’t hurt their chances by listing their preferences truthfully,” said Niederle and Featherstone, the Stanford research team."

Here are Rachel Norton's comments (she's a school board member with a blog), and here's the story from the SF Chronicle. Here are some of my recent posts on school choice; many of the recent ones tell the SF story as it unfolded.

Now, on to implementation.