No comment(s)

In July, just before travelling, I closed the comments on this blog, not because I don't appreciate smart topical comments, but because every morning I had to delete spammy comments on old posts by people purporting to buy kidneys.

Here are those from the last day I allowed comments

	We are urgently in need of kidney donors in wockhardt hospital India for the sum of $500,000,00,( 3 CRORE INDIA RUPEES) All donors are to reply via Email: wockhardthospital7@gmail.com on The Econometrics of Matching Models by Pierre-André Chiappori and Bernard Salanié in the JEL	wockhardt hospital	on 7/12/18
	We are urgently in need of kidney donors in wockhardt hospital India for the sum of $500,000,00,( 3 CRORE INDIA RUPEES) All donors are to reply via Email: wockhardthospital7@gmail.com on Organ donation rates in Canada	wockhardt hospital	on 7/12/18
	We are urgently in need of kidney donors in wockhardt hospital India for the sum of $500,000,00,( 3 CRORE INDIA RUPEES) All donors are to reply via Email: wockhardthospital7@gmail.com on Raj Chetty at the LSE: How Can We Improve Economic Opportunities for Low-Income Children?	wockhardt hospital	on 7/12/18
	We are urgently in need of kidney donors in wockhardt hospital India for the sum of $500,000,00,( 3 CRORE INDIA RUPEES) All donors are to reply via Email: wockhardthospital7@gmail.com on More on kidney black markets in India	wockhardt hospital	on 7/12/18
	We are urgently in need of kidney donors in global hospitals group India for the sum of $500,000,00,( 3 CRORE INDIA RUPEES) All donors are to reply via Email: onlinecareunit@gmail.com on 77 Kidney Exchange transplants in 2015 at one transplant center in India	Global Hospitals Group	on 7/12/18
	We are urgently in need of kidney donors in global hospitals group India for the sum of $500,000,00,( 3 CRORE INDIA RUPEES) All donors are to reply via Email: onlinecareunit@gmail.com on Ten kidney exchange transplants on World Kidney Day in Ahmedabad, India Delete | Not spam	Global Hospitals Group	on 7/12/18

Pay transparency, by Cullen and Pakzad-Hurson

Here's a contribution to the sometimes confusing debate about salary transparency.

''Equilibrium Effects of Pay Transparency in a Simple Labor Market"

Zoe B. Cullen and Bobak Pakzad-Hurson

Abstract: Public discourse on pay transparency has not focused on equilibrium effects:  how greater transparency  impacts  hiring  and  bargaining.   To  study  these  effects,  we  combine  a  dynamic  wage-bargaining model with unique data of temporary work arrangements that differ in their level of transparency.  Full transparency lowers wages by up to 25% and increases hiring by similar magnitudes.  Earnings inequality falls, and employer profits rise significantly.  A key intuition is high transparency commits employers to negotiating aggressively, because a highly paid worker’s salary affects  negotiations  with  other  workers.   We  discuss  implications  for  the  gender  wage  gap  and employers’ endogenous transparency choices.

**********

Here are some earlier posts that touch on related issues:

Wednesday, August 17, 2016

Salary negotiation: some Massachusetts market design

The NY Times has the story: Massachusetts Bans Employers From Asking Applicants About Previous Pay

Sunday, May 5, 2013

Market culture and salary discussions

Martin Shubik, 1926-2018

Ed Kaplan emails me with the sad news that Martin Shubik died yesterday.

Here's the first brief announcement from Yale School of Management:
Prof. Martin Shubik, Influential Game Theory Scholar, Dies

He was a pioneering game theorist, and a frequent collaborator with his graduate school roommate Lloyd Shapley. My understanding is that the two of them shared a double room, in a suite with John Nash. 

He suffered from a rare disease, Inclusion Body Myositis, and established a charity to organize research about it, Inclusion Body Myositis Registry at Yale.

He was a man of many parts. (See here, for example.)

Here are two photos I took of him at a Stonybrook conference in honor of Shapley. (In the second he must have been proving an especially difficult theorem...)

Martin Shubik in 2003

Two papers by Shapley and Shubik played important roles in areas in which I've worked:

The second (by publication date) was their landmark 1971 paper on matching as an assignment game (with all payments freely transferable), published in volume 1 number 1 of the International Journal of Game Theory: The assignment game I: The core

(Years after it was published, I asked Shapley what ever happened to part II, and his reply was "Never call a paper part I unless you have already written part II."  As I recall, he further said that the plan for the never-written part II had been to study the von Neumann-Morgenstern solutions of the assignment game.)

The first was their famous 1954 paper in the American Political Science Review, perhaps Shubik's most cited, on how to evaluate the strength of each position in "simple" coalitional games, in which every coalition is either 'winning' or 'losing'
A Method for Evaluating the Distribution of Power in a Committee System

I have many times used his model of escalation, The Dollar Auction Game, as an in-class demonstration of the importance of auction rules for auction outcomes and strategies.

Historians of game theory are sure to learn a lot from the archives of his papers and correspondence at Duke:
The Martin Shubik Papers: From Early Game Theory to the Strategic Analysis of War
************
Update: Yale SOM has now published a long, fond remembrance:
Remembering Prof. Martin Shubik, 1926–2018

Take a break: avoiding congestion in ant colonies and elsewhere

A recent paper in Science is introduced by the NY Times under this headline:

The Secret to Ant Efficiency Is Idleness

Here's the paper:
Collective clog control: Optimizing traffic flow in confined biological and robophysical excavation
J. Aguilar, D. Monaenkova, V. Linevich, W. Savoie, B. Dutta, H.-S. Kuan,  M. D. Betterton, M. A. D. Goodisman, D. I. Goldman

Here's the abstract of the paper (preceded by another description, perhaps written by a writer for Science(?) meant to be more intelligible...

When fewer workers are more efficient:
"A narrow passageway can easily become clogged or jammed if too much traffic tries to enter at once or there is competition between the flow of traffic in each direction. Aguilar et al. studied the collective excavation observed when ants build their nests. Because of the unequal workload distribution, the optimal excavation rate is achieved when a part of the ant collective is inactive. Numerical simulations and the behavior of robotic ants mimic the behavior of the colony."

Abstract: Groups of interacting active particles, insects, or humans can form clusters that hinder the goals of the collective; therefore, development of robust strategies for control of such clogs is essential, particularly in confined environments. Our biological and robophysical excavation experiments, supported by computational and theoretical models, reveal that digging performance can be robustly optimized within the constraints of narrow tunnels by individual idleness and retreating. Tools from the study of dense particulate ensembles elucidate how idleness reduces the frequency of flow-stopping clogs and how selective retreating reduces cluster dissolution time for the rare clusters that still occur. Our results point to strategies by which dense active matter and swarms can become task capable without sophisticated sensing, planning, and global control of the collective.

Modern congestion pricing, by Cramton, Geddes and Ockenfels

Here's a short paper in the July 31 Nature:
Set road charges in real time to ease traffic
Track vehicles to link tolls with demand and cut congestion, urge Peter Cramton, R. Richard Geddes and Axel Ockenfels

And here's the longer working paper:
Markets for Road Use: Eliminating Congestion through Scheduling, Routing, and Real-Time Road Pricing
Peter Cramton, R. Richard Geddes, and Axel Ockenfels

Their vision:

"Efficient pricing of network capacity is not new. Indeed, wholesale electricity markets have been dynamically priced for over a decade. Communications markets are adopting dynamic pricing today. Efficient pricing of road use, however, has only recently become feasible. Advances in mobile communications make it possible to identify and communicate the location of a vehicle to within one cubic meter—allowing precise measurement of road use. User preferences can be communicated both in advance to determine scheduled transport and in real time to optimize routes based on the latest information. Computer advances also facilitate efficient scheduling and pricing of road use. Consumer apps help road users translate detailed price information into preferred transport plans. Computers also allow an independent system operator to better model demand and adjust prices to eliminate congestion and maximize the total value of road infrastructure. An independent market monitor, distinct from the
operator, observes the market, identifies problems, and suggests solutions. A board governs the market subject to regulatory oversight."

An egregious repugnant transaction

When I speak about repugnant transactions--transactions which some people voluntarily engage in, but other people think they shouldn't, or perhaps shouldn't even be allowed to--I sometimes run into some skepticism from economists who point out that voluntary transactions generally increase welfare, and that to restrict them is paternalistic.

Nevertheless, many people have that (paternalistic) impulse at least sometimes.
Test yourself on this one, from the Guardian:

British stag group in Spain 'paid homeless man to get face tattoo'
Anger in Benidorm as Polish national given £90 to have groom’s name on forehead

"British tourists on a stag party in Benidorm have provoked outrage by paying a homeless man to have the name of the groom tattooed on his forehead, a local business leader has said.

Karen Maling Cowles, the president of the Benidorm British Business Association, said the group gave 34-year-old Tomek, originally from Poland, €100 (£89) to have “Jamie Blake, North Shields, NE28” inked on his head...
...
"Residents of the Spanish resort criticised the stag group after the tattoo parlour posted a photo on Facebook, since taken down, of Tomek getting the tattoo."
***********

HT: Muriel Niederle

Medically assisted death debated in Australia

A bill is under consideration in Australia regarding medically assisted suicide, aka death with dignity.  (The politics are complicated by the fact that Australia has both states and territories.) Here's the story from the Guardian:

David Leyonhjelm confident voluntary euthanasia bill will pass Senate
Liberal Democrat pressures Malcolm Turnbull to permit vote in lower house

"The bill to allow the Northern Territory and Australian Capital Territory to legislate for euthanasia – reversing a ban imposed by the commonwealth in 1997 – has support from at least 18 Labor senators, the nine Greens, eight crossbench senators and a small but growing group of Coalition senators. It needs 39 to pass the Senate.
...
"“Australians with a terminal illness should have a right to die with dignity, ideally with effective palliative care, but with sufficient safeguards, that right, in extreme cases, should also extend to voluntary euthanasia.”
***************

An earlier, related post:

Friday, May 4, 2018

Death with dignity: David Goodall flies from Australia to Switzerland

Data mining for knowledge discovery in London

24rd SIGKDD Conference on Knowledge Discovery and Data Mining
August 19 - 23, 2018 - London, UK

Here's the program.  I'll be speaking on Wednesday morning, on Market Design and Computerized Marketplaces:

Keynote speakers

David Hand

SENIOR RESEARCH INVESTIGATOR
EMERITUS PROFESSOR OF MATHEMATICS, IMPERIAL COLLEGE

Alvin E. Roth

NOBEL MEMORIAL PRIZE IN ECONOMICS
PROFESSOR OF ECONOMICS, STANFORD UNIVERSITY

Yee Whye Teh

PROFESSOR,DEPARTMENT OF STATISTICS, UNIVERSITY OF OXFORD
RESEARCH SCIENTIST, DEEPMIND

Jeannette M. Wing

AVANESSIANS DIRECTOR OF THE DATA SCIENCES INSTITUTE 
COLUMBIA UNIVERSITY

Diversity isn't just about role models: Alsan, Garrick and Graziani on black male doctors and patients

Medical compliance--following the doctor's "orders,"--is a big issue in medical care, and here's an article that reports a novel field experiment suggesting that black male doctors treating black men may have more success than non-black docs.

Does Diversity Matter for Health? Experimental Evidence from Oakland
Marcella Alsan, Owen Garrick, Grant C. Graziani
NBER Working Paper No. 24787

"We study the effect of diversity in the physician workforce on the demand for preventive care among African-American men. Black men have the lowest life expectancy of any major demographic group in the U.S., and much of the disadvantage is due to chronic diseases which are amenable to primary and secondary prevention. In a field experiment in Oakland, California, we randomize black men to black or non-black male medical doctors and to incentives for one of the five offered preventives — the flu vaccine. We use a two-stage design, measuring decisions about cardiovascular screening and the flu vaccine before (ex ante) and after (ex post) meeting their assigned doctor. Black men select a similar number of preventives in the ex-ante stage, but are much more likely to select every preventive service, particularly invasive services, once meeting with a doctor who is the same race. The effects are most pronounced for men who mistrust the medical system and for those who experienced greater hassle costs associated with their visit. Subjects are more likely to talk with a black doctor about their health problems and black doctors are more likely to write additional notes about the subjects. The results are most consistent with better patient-doctor communication during the encounter rather than differential quality of doctors or discrimination. Our findings suggest black doctors could help reduce cardiovascular mortality by 16 deaths per 100,000 per year — leading to a 19% reduction in the black-white male gap in cardiovascular mortality.
*******

While there's no substitute for the kind of serious science reported in the paper above, below is a very believable anecdotal account in an interview published in Stat that suggests that companies seeking to solve medical problems afflicting women may have more success with venture capital firms that have women partners:

A women’s health startup tried to drum up interest for a much-needed drug. Many men didn’t get it

Kidney exchange on NPR

Two friends told me that they'd heard me on NPR yesterday, and so I searched and found this program on kidney exchange. (At the link below you can read the transcript, and also see a 9 minute video that apparently played on tv.) They interview patients, donors, and kidney docs, and feature two economists, me and Nikhil Agarwal.  (My part seems to be pieced together from footage from a talk I gave at a Google conference, and a video made by the National Academy of Sciences, but it looks like they actually interviewed Nikhil...)

The economic principle that powers this kidney donor market
Aug 16, 2018 6:20 PM EDT

I can't figure out how to embed the video in this post, but here's a picture that's just a screen shot, not a link:

An open marketplace for reinsurance

Tremor Technologies Inc. has announced its new online marketplace for reinsurance.  Here's the press release:

Tremor Technologies, Inc., a venture-backed startup based in Greenwich, CT, has announced that its programmatic risk placement marketplace is fully operational with significant buyers and sellers of reinsurance protection in place.


And here's an article with a little more detail:

Tremor opens programmatic marketplace for reinsurance risk placement
by ARTEMIS on AUGUST 14, 2018

"The company has venture capital backing and has been developing its technology platform and building a team of marketplace design experts* for two years now, with the resulting smart market now available.
...
"Peter Cramton, Tremor’s Chief Economist and a recognised international expert on auction theory and practice, as well as market design, commented, “We maximize value for both sides of the market and then fairly share that value among participants with competitive clearing prices.”

***************
*full disclosure--I'm on Tremor's advisory board.

Why aren't clearinghouses used in college admissions?

I recently had an email from  Professor Deepak Hegde, at NYU's Stern School who asked me a question that led to the following exchange (edited for brevity and reproduced with his permission):

"Why are admission decisions in a broader set of settings (e.g., Phd applicants-programs, MBA applicants-to-business schools and so on)  not cleared through matching programs as is done with medical schools and residency applicants (or in some cases public schools matching)?   Are there a general set of conditions that one could develop to understand the contexts in which the matching algorithm that have helped advance could be implemented effectively?"

I replied as follows:

"I certainly don’t have a complete answer, but one obvious piece is that setting up a centralized clearinghouse for a whole market involves getting a lot of parties to coordinate and cooperate.  So I would guess that MBA admissions have a better chance of getting organized than, say Ph.D. admissions, since MBA programs are more alike one another than are Ph.D. programs (e.g. in Physics and Philosophy, or Chemistry and Chinese).

"And since wide scale cooperation is hard, I think it mostly happens in market in which people are very dis-satisfied with the existing system, and not just somewhat irritated.

"Is it your sense that MBA admissions is in a crisis of some sort?"

His reply: "In my assessment ... MBA admissions is not facing such a crisis, yet."

So...I think the MBA Match isn't something we'll hear about in the near future.

Dealing with shortages of deceased donors in a future with fewer automobile accidents

Sometimes you find out that someone has already worried about something that you haven't even thought of worrying about.  I worry about some aspects of transplantation, and I sometimes think about driverless cars, but here's an article about a worry that is nowhere near the top of my list.  However the short article below (it's a comment on another article) raises some interesting points about how society may want to rethink increasing organ donation as we see (I hope) ever fewer deaths from automobile accidents:

How Do You Donate Life When People Are Not Dying: Transplants in the Age of Autonomous Vehicles

Zoe Corin, Roee Furman, Shira Lifshitz, Ophir Samuelov & Dov Greenbaum (2018) , The American Journal of Bioethics, 18:7, 27-29, DOI: 10.1080/15265161.2018.1478024

"While there are differences of opinion as to when autonomous or self-driving cars will actually invade our roads—some car manufacturers are predicting consumer-ready self-driving cars as early as 2021—there is broad consensus that their inevitability is assured. And while there are clear positive social consequences that will result from self-driving cars and trucks, there are also a number of often less appreciated negative externalities. Balanced against the saved lives, minimized commutes, reduction in pollution, and general decrease in daily stress are the driving-related job losses and the reality that there will be fewer organ donors."
...
"There are no quick fixes, and current laws already place significant restrictions on the organ acquisition process. Buying and selling organs is nearly universally objectionable, unethical, and illegal (Ludin 2008). Some countries even ban any benefit, or any form of valuable consideration whatsoever, in exchange for an organ (Caulfield et al. 2014
Caulfield, T., E. Nelson, B. Goldfeldt, and S.Klarenbach, 2014. Incentives and organ donation: what’s (really) legal in Canada?Canadian Journal of Kidney Health and Disease 1: 7.[Crossref], [PubMed], [Google Scholar]). Some jurisdictions go even beyond this altruistic-only donor requirement, and allow live donations only among blood relatives (India 1994Government of India. 1994. Transplantation of Human Organs Act, 1994.http://wwwmedindianet/tho/thobill1asp. [Google Scholar]).

...

"However, even these universal attitudes have some specific exceptions: In many countries, blood donors are paid, and sperm and egg donors can receive thousands of dollars in remuneration. But just because a handful of tissue donations have been commodified (albeit sometimes obfuscated as gifts with financial consideration), it is not clear that this cash for contribution system will expand anytime soon to include other types of living donations, such as liver lobes or kidneys. To wit: While New York sperm donors can make more than a thousand dollars a month (Lewinnov 2016

Lewinnov, T. 2016. 10 things to know about being a sperm donor, New York Times, Nov. 3 2016. [Google Scholar]), surrogacy contracts are still void and unenforceable by law (New York 2014New York. 2014. N.Y. Dom. REL. Law §§ 121-124 Surrogate Parenting Contracts Organ Donation and Recovery Improvement Act (2004). [Google Scholar]).

Nevertheless, in light of the need for organs, a number of jurisdictions have tried to indirectly incentivize donation, either through financial or non-financial mechanisms. Such incentives include paying for funeral costs of non-living donors, or for the out-of-pocket expenses directly associated with transplantation (US 2004)."

The King and Lloyd (in special issue of Games and Economic Behavior in Honor of Lloyd Shapley)

Games and Economic Behavior has published a

Special Issue in Honor of Lloyd Shapley: Seven Topics in Game Theory

Edited by David K. Levine

Volume 108, Pages 1-614 (March 2018)

The first paper in the special issue is this Introduction

Introduction to the special issue in honor of Lloyd Shapley: Eight topics in game theory

Pages 1-12

David K. Levine

Download PDF

David's introduction concludes with "Some remembrances of Lloyd," by various authors.  Here is mine: 

The King and Lloyd

By Alvin E. Roth

My first long conversation with Lloyd was when I visited him in 1974, having just finished my Ph.D. dissertation. I made what felt like a pilgrimage to see him at the RAND Corporation in Santa Monica, to tell him about my work.  

My last long conversations with Lloyd were in December, 2012, when we both attended the Nobel Prize celebrations in Stockholm. A careful observer might have noted that we had both aged a little since our first meeting. Lloyd walked with a cane, and that led to a small bit of logistics.

When you receive the Nobel from the King of Sweden, the King presents you with two packages, containing the diploma and the medal, which you hold with your left hand so that the two of you can shake hands. Lloyd was concerned about how he would manage this with his cane, and so we agreed that I would walk with him and hold his cane while he received the packages and shook hands, and return it to him immediately afterwards. Hence the picture below.

A subsequent encounter with the King had a touch of game theory. The night after the awards ceremony (and a very big dinner party in the City Hall) there is another dinner party in the royal palace, followed by a reception. At some point Lloyd was fatigued and ready to return to the hotel. But royal protocol dictates that no one should leave before the King, and that when the King leaves the party is over, and everyone leaves. So if the King had been told that one of his guests of honor was ready to go home, he would have felt obliged to depart and end the party to make this possible. To avoid ending the party prematurely, Lloyd therefore exited through the kitchen with the help of palace staff, without passing by the King and without alerting him and disrupting the party.  I thought it very appropriate that he exited with this small game-theoretic flourish.

How storks became non-kosher

When I speak about repugnant transactions--transactions that some people would like to engage in but others think they shouldn't--I don't normally include dietary restrictions of a religious sort, like those which make food kosher or hallal (or vegetarian or vegan) since those restrictions are normally applied by people to themselves, not to others.  Thus most observant Jews don't think that non-Jews should keep kosher, and many vegetarians think that what you eat is a matter of personal preference.

However, within a religious community, what is allowed can be a matter of public discussion.  Haaretz has a (late breaking) account of the discussion of storks, in medieval Spain.  Perhaps storks aren't kosher because of a translation error?

How Rashi Got the Jews to Stop Eating Storks
A young rabbi in medieval Spain, scandalized by local laxness, sparks a bitter battle over bird on the plate
By Elon Gilad Jul 30, 2018

"During the second half of the 11th century, Rashi labored on his commentary of the Bible and the Babylonian Talmud, which became and still are highly influential. It was in these that Rashi identified the khasida with the stork, apparently for the first time.

Rashi could not read Arabic and was thus cut off from the traditions of the Geonim. He based his commentary of the oral tradition he received from his teachers, and his own power of logic.

With regard to the identity of the 20 unclean birds listed in the Bible, Rashi apparently did not receive a precise identification of each one. He writes in his commentary that the anafa, the bird coming right after the khasida in the list, was a heron - “I think.”

He may have been more certain regarding the khasida, since he doesn’t qualify that its identification was based on conjecture, but it probably was.
...
The influence of Rashi’s commentaries was immense. Once Rashi identified the khasida with the stork, this became the traditional view among European Jews with in just a few generations. Over time this tradition spread throughout the Jewish world, and into Christian vernacular translations of the Bible.

The identification of the khasida with the stork began to spread throughout Spanish Jewry as we have seen with the arrival of Asher ben Jehiel and his family at the turn of the 14th century, and Spanish Jews gradually stopped eating the bird.

When the Jews of Spain were expelled in 1492, they took the ban on stork to Jewish communities throughout the Arabic-speaking world, and these communities too stopped eating storks. Eventually all Jews accepted Rashi’s identification of the biblical khasida with the stork and today all Jews accept that storks are not kosher."

Presumed consent: too early to declare failure, but cautions are plentiful

Frank McCormick points out a recent report in the journal Health Policy indicating that the Welsh move from opt-in to opt-out or ('deemed consent') for deceased organ donation has not so far been successful at raising transplant rates:

Welsh 2013 deemed consent legislation falls short of expectations
by Jordan Alexander Parsons

"Abstract: Wales, in 2013, was the first country in the United Kingdom to pass legislation introducing presumed (or deemed) consent for organ donation, and remains the only one. It was introduced in an attempt to increase the number of life-saving transplants taking place in the UK, in a move that policy makers hoped would mirror Spain’s success. More recently, pressure has been mounting for England to follow suit, with a public consultation currently in progress. However, the Welsh system has been far from a success, raising the question of why campaigners are so adamant that it should be replicated. Before the Welsh Government introduced the Human Transplantation (Wales) Act there had been no strong evidence to suggest it would make a difference, with countries boasting both high organ donation rates and presumed consent legislation demonstrating no clear causal relationship between the two facts. In addition, a recent report evaluating the Act has highlighted its failure to improve donation rates, and has even presented some potentially concerning statistics that may suggest a negative impact. This paper first considers presumed consent in other countries – Spain and Brazil – before illustrating the underwhelming progression of Wales’ new system and the need to look to other options."

Here's a paragraph that strikes me as important, because family consent is important in Wales, and automatic inclusion on the deceased donor registry reduces the signal value that the deceased wished to be a donor:

"Under the Welsh system, the deceased is deemed to have consented to donation unless (1) a decision as to donation by the deceased is in force, (2) the deceased had appointed a person or persons to make the decision on their behalf, or (3) a relative of friend of long standing objects on the basis of views held by the deceased and it is reasonable to assume the objection is accurate [2]. It is down to the medical team to determine whether a relative’s objection is their own, or one based on the views of the deceased. Unsurprisingly, doctors have not shown willing to challenge these objections, despite their legal right to; they consider it inappropriate to go against the wishes of the family."
**************

Here is a related article, which raises other potential problems:
Presumed consent will not automatically lead to increased organ donation
Sharif, Adnan
Kidney International , Volume 94 , Issue 2 , 249 - 251

"a review of the latest available data (2016) from the Global Observatory on Donation and Transplantation suggests no significant difference in overall transplantation activity between presumed versus explicit consent countries, with increased deceased organ donor rates balanced by decreased living donor rates among presumed consent countries (Table 1). Whether the consent process is presumed or explicit has no bearing on many inter-related factors that influence organ donation rates. For example, Coppen et al.4 observed a strong correlation between mortality rates and organ donation numbers (Spearman’s r = 0.81, P < 0.01) and that, after controlling for differences in relevant mortality rates, there was no significant influence of presumed versus explicit consent on organ donation rates."

Table 1 Organ donation and transplantation activity

Parameter	Presumed consent (mean ± SD per million population)	Explicit consent (mean ± SD per million population)	P value
Kidney (deceased)	30.9 ± 15.1	22.6 ± 11.1	0.078
Kidney (living)	4.8 ± 2.6	16.9 ± 8.4	<0 .001="" td="">
Liver (deceased)	12.9 ± 8.5	10.1 ± 5.3	0.265
Liver (living)	0.4 ± 0.9	2.7 ± 5.3	0.107
Heart	4.8 ± 3.5	3.1 ± 2.6	0.108
Lung	3.5 ± 4.0	4.2 ± 2.8	0.543
Pancreas	1.6 ± 1.6	1.4 ± 1.0	0.579
Overall transplant activity	59.1 ± 30.7	58.9 ± 23.4	0.982

From the Global Observatory of Donation and Transplantation registry ( www.transplant-observatory.org).
...
"The other concern with presumed consent is the reduced rate of living donation observed in presumed consent countries, a phenomenon repeatedly observed in systematic reviews and apparent in current registry data (Table 1). Many will argue that an increased supply of deceased organ donors with presumed consent overrides the need for living donors. However, it is unlikely switching to presumed consent can ever completely eradicate organ waiting lists, and living donation facilitates transplantation for many high-risk (predominantly kidney) recipients who would otherwise be deemed unsuitable for the transplantation procedure. Altruistic living kidney donors are a valuable resource to facilitate kidney transplantation for some of the most immunologically difficult and long-waiting end-stage kidney failure patients,7 and the risk of these numbers declining, although purely speculative in the setting of a switch to presumed consent, would jeopardize successful national living kidney sharing schemes. Declining living donation rates could therefore be further hampered by switching to presumed consent, with adverse consequences for established kidney transplantation programs."

Blockchains, smart contracts, and incomplete contracts (and Prysm Group, a startup consulting firm on all that)

There's a lot of talk lately about smart contracts, i.e. contracts written in executable code, but less talk about how all contracts are incomplete (and therefore subject to renegotiation, dispute resolution and issues of residual control), a subject for which Oliver Hart won a recent Nobel.

So I was glad to see this article in Forbes:

Nobel Prize Winner Joins Blockchain Startup To Fix Smart Contracts
by Michael del Castillo

"Long before blockchain was cool, Nobel Prize-winning economist Oliver Hart was into contracts. As far back as 1976, the doctor of economics from Princeton University had been exploring how corporations use contracts to interact, and what happens when things go wrong."

The article is sparked by the fact that Oliver and Preston McAfee, who recently retired from being Chief Economist at Microsoft, have become advisors to a startup consulting company called Prysm Group, which aims to advise blockchain companies about contracts, incentives, and economics generally.

Here's the press release:

Prysm Group Adds Nobel Prize-Winning Economist And Former Microsoft Chief Economist To Board Of Senior Advisors

"Prysm Group provides blockchain organizations with counsel in the complex economic fields of contract theory, market design, game theory, and social choice."

The founders of Prysm Group are two economists who I met when they were graduate students at Harvard, Cathy Barrera and Stephanie Hurder (who I've blogged about before, here, and here).

Welfare in a behavioral world

This is a behavioral economics intensive week at Stanford, with the experimental SITE session just ended, and the Psychology and Economics session underway.

There are a lot of hard problems in behavioral economics: in some senses, it's harder to figure out what people may do if we aren't perfectly rational. But a particular problem is how we should take care of each other, if it isn't always clear how to evaluate someone's welfare.

For example, we had two talks in the earlier SITE session on paternalism--under what circumstances can we make people better off by giving someone else the power to make choices for them?  More generally, if people aren't always good at making choices, how can we tell what's good for them, i.e. how can we evaluate welfare?

Doug Bernheim and Dmitry Taubinsky tackle this question in a chapter in the forthcoming

Handbook  of  Behavioral  Economics,  Volume  1, edited by B.  Douglas  Bernheim,  Stefano  DellaVigna,  and  David  Laibson.

You can find it here as an NBER working paper:

Behavioral Public Economics
B. Douglas Bernheim, Dmitry Taubinsky
NBER Working Paper No. 24828
Issued in July 2018


"This chapter surveys work in behavioral public economics, emphasizing the normative implications of non-standard decision making for the design of welfare-improving and/or optimal policies. We highlight combinations of theoretical and empirical approaches that together can produce robust qualitative and quantitative prescriptions for optimal policy under a range of assumptions concerning consumer behavior. The chapter proceeds in four parts. First, we discuss the foundations and methods of behavioral welfare economics, focusing on choice-oriented approaches and the measurement of self-reported well-being. Second, we examine commodity taxes and related policies: we summarize research on optimal corrective taxes, the efficiency costs of sales taxes that are not fully salient, the distributional effects of sin taxes, the use of non-price policies such as nudges, the tax treatment of giving, and luxury taxes. Third, we examine policies affecting saving, including capital income taxation, commitment opportunities, default contribution provisions for pension plans, financial education, and mandatory saving programs. Fourth, we detail the manner in which under-provision of labor supply and misunderstandings of policy instruments impact optimal labor income taxation and social insurance. We close with some recommendations for future work in behavioral public economics."

Repugnant prediction markets on a blockchain (Augur)

Augur is a decentralized (i.e. unmoderated) prediction market, built on a blockchain.  Somewhere there is a fundamental law of internet that says that anonymity leads to bad manners, and for a prediction market, that means death pools.

Here's the story from CCN, a news service that focuses on cryptocurrencies and blockchains:

Assassination Markets Let Augur Users Gamble on Trump Murder

"this market exists, and, though not the most popular bet on Augur, more than 50 shares have been traded on it as of the time of writing. Similar markets, moreover, exist for a number of other public figures, allowing users to gamble on whether 96-year-old actress Betty White and U.S. Senator John McCain — who has been diagnosed with brain cancer — will survive until Jan. 1, 2019."
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Earlier, see

Monday, September 7, 2009

"Death pools", coming to life again

HT: MR

Deceased donor chains: Market design language is entering transplantation

Here's some more argument in favor of starting kidney chains with deceased donors, from the journal
Clinical Transplantation Volume 32, Issue 7:

Lessons from Uber and Airbnb: Why we should link the deceased and living donor pools

by Avi Baskin  Ariella Maghen  Tom Mone  Jeffrey Veale

"Deceased donor organs are currently underutilized and undervalued, particularly in kidney chains, similar to how parked cars and vacant homes were before Uber and Airbnb. The ride‐sharing company Uber has been hailed for allowing people to drive their cars to generate more benefit from this underutilized resource. Similarly, Airbnb enables people to rent out their unused property, increasing the potential of an otherwise missed opportunity. Together, Uber and Airbnb represent a new era, amplifying the benefit of cars and property that would be otherwise underused.

"Likewise, the world of transplantation should take note as software programs and mathematical algorithms could also be applied to maximize the benefits of available kidneys for transplant."
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The authors are all transplant professionals, not an economist among them. We've come a long way from the days when it was hard to convince the transplant community that kidney transplantation, and kidney exchange in particular, could be usefully thought about in connection with markets, marketplaces, and market design.