College rankings: how they influence applicants, and colleges

A recent paper discusses the impact of the US News and World Report rankings of colleges:

"Why is First Best? Responses to Information Aggregation in the U.S. News College Rankings," by Michael Luca and Jonathan Smith, both grad students at BU.

Here is the abstract: "We present robust evidence that the U.S. News college rankings causally affect college choice beyond their informational content about school quality. Using multiple identification strategies, we estimate that an exogenous one rank improvement leads to a 0.3%-0.9% increase in applications. We explore two potential explanations of the rank effect, showing evidence that students use rankings to improve coordination and to reduce cognitive costs of information processing. Using a novel natural experiment, we then consider the incentives that rankings create for schools. Our results suggest that the rankings caused significant changes to admissions policies, causing schools to favor students who do well along dimensions used in the rankings."

The final section of the paper, called "Rankings as a Mechanism Design Problem" concludes:
"While gaming of the USNWR rankings has come to have a very negative connotation, the rankings also present a mechanism that will only grow in importance over time. In particular, the mere presence of information provides incentives for schools to change their behavior. Further, USNWR provides one of the largest and most sophisticated examples of rankings as an accountability mechanism for schools. We have shown that the existence of the rankings led schools to focus more on attracting students who come from the top 10% of their class and have high SAT scores, probably at the expense of good students who performed worse along these observable measures. However, we have also shown that the rankings led to higher graduation rates. In net, the rankings have served their purpose by holding schools accountable for their decisions. The rankings created high powered incentives to which schools respond. This shows hope that information provision can become an important part of improving schools, especially in settings where there is school choice. As high schools and elementary schools around the country continue to look for new mechanisms in the challenging problem of school accountability, USNWR can help to highlight some of the positive and negative consequences that we should expect to see.

Assortative dating

Specialty dating sites are nothing new; and here's a story about one that specializes in beauty: Beautiful dating events: ‘It’s not shallow to say I like beautiful people’

To join Beautifulpeople.com you submit a photo, and members vote on your looks.

I wonder if this works better than sites that aim to match complements.

More on kidney donation and social networking

It continues to look like social networking may become big for kidney donation. Here's a recent story from New England: Conn. mayor donates kidney to Facebook friend

"Sanchez, a 44-year-old father whose kidneys were failing because of diabetes, sent out the request on Facebook only hesitantly and on his doctor's suggestion. He worried people might pity him -- and certainly hadn't pinned his hopes on finding a donor that way.
He didn't have long to wait. Capone Almon was the first person to respond.
"I sent him a private message and just said, 'Hey, I'll try. I'll get tested,'" Capone Almon said Wednesday. "I really felt from the very beginning that I was going to be a match and a donor. I don't know why, but I just knew it."
Sanchez had no such certainty.
"I thought she was joking. The mayor of East Haven would offer me her kidney?" said Sanchez, an office administrator. "She responded back and said, 'I am serious, I am willing to get tested.'"
...
"Capone Almon, a Democrat, was running for a second term as mayor at the time but kept the details of her medical plans a secret. She won the election as they awaited word on when she could donate the kidney, saying they grew as close as family during the lull.
"I know he voted for me, too," she joked.
The operation was set only after Capone Almon passed a battery of tests and was given a long explanation of the process, which involved three small incisions near her ribcage and a scar similar to that of a cesarean section.
"What the doctors said to me is, 'Your recipient is already sick and we're not going to make you sick to make him somewhat better,'" she said. "They do not compromise the donor's health in any way, shape or form."
Their tenuous connection was cemented into a lasting bond April 8, when doctors at Yale-New Haven Hospital removed Capone Almon's left kidney and transplanted it into Sanchez.
They were released from the hospital in less than a week and are expected to make full recoveries. His insurance paid for both their surgeries, and the mayor is back on the job in this middle-class city of about 30,000."

HT: Alexander Ruiz

The WSJ on the football draft and market design

Writing in the Sports section of the Wall Street Journal, Reed Albergotti considers the NFL player draft, and some possible alternatives.
Why the NFL Draft Drives Economists Crazy
Fixed Costs, Variable Talent and Changes in the College Game Make Big Mistakes Unavoidable; Time for an Auction?

In an accompanying graphic, he writes "Harvard researchers Lucas Coffman, Itai Ashlagi, and Itay Fainmesser came up with an alternative based on an idea called a simultaneous ascending auction."

Along the way, the article has some nice things to say about market design.
"Thanks to market design, medical-school students are matched with hospitals through a complicated computer algorithm. Governments use "communal auctions" to distribute things like cellular bandwidth to telecommunications companies. Even the New York City public schools have used market economics to ensure parity in its school-choice system. "
...
"Three researchers at Harvard Business School—who studied under Alvin Roth, a Harvard professor and a pioneer in market-design theory—have proposed an alternative to the NFL draft.
Under their plan, all 32 teams would be given seven picks. They would have to abide by a spending cap that would go higher to lower—with the worst team (based on its record the previous season) having the most money to spend. When the bidding opened, the most sought-after players would draw multiple bids. Teams could then raise their bid as high as they'd like for a player they coveted.
Theoretically, a team could get any player it wanted—so long as it was prepared to pinch pennies on everyone else. Meanwhile, a team that didn't want to break the bank on any particular player could pick up lots of useful parts by spreading its money around evenly. Teams could also thrive by focusing on the bidding and looking for bargains.
"I think that it would significantly help teams get the right guys," said Lucas Coffman, one of the study's authors. If nothing else, Mr. Coffman said, the auction format might be more exciting than the draft, which allows for long gaps between picks.
In any case, there's some evidence the draft could be the next fix for a league that fixes everything. One NFL executive said patience is running thin. "There's a huge trail littered with guys who got the big dollars but were a bust," this person said."

Postscript: Luke Coffman, Itai Ashlagi, and Itay Fainmesser were all on a differently organized labor market this year, and will be at Ohio State, MIT Sloan, and Brown next year.

For another take on the design of the NFL labor market, by another recent Harvard grad Gregor Matvos, see his paper "Renegotiation Design: Evidence from NFL roster bonuses."

Update: Luke Coffman points out that the allocation of tickets to attend tonight's NFL draft could use some market design, and he points me to this, on Craigslist.
Experienced line sitter available to get tickets for NFL Draft - $75 (Midtown)
"I am an experienced line sitter who has worked many events. I am always on line early to secure tickets. I will be available to stand in line for tickets for the 1st 2 nights of the NFL Draft at Radio City Music hall. The procedure is as follows I will line up the evening before to get my wristband and will be back on line in order to get the tickets at 5:15 the day of the draft. The gates at Radio City will open at 6 p.m. each night. My charge for this service is $75 per ticket I can also bring people with me to secure extra tickets if you need more than 1, Please reply with the night(S) you want tickets for and how many tickets you need. Round 1 will be held Thursday night April 22nd and rounds 2-3 will be held Friday April 23rd. "

BBC on Suppliers of Human Bodies

The BBC has aired a 20 minute piece on Suppliers of Human Bodies . You can listen to it here. The first interviewee is my HBS colleague Michel Anteby, largely about his article A Market for Human Cadavers in All but Name?

The second interviewee is Brent Bardsley, of Anatomy Gifts Registry, part of the not-for-profit Anatomic Gift Foundation.

The interviewer is largely horrified ("trading in human flesh..." "money shouldn't be involved here..." "an unsavory business..."), but the interviewees help put the issues in perspective (and the law regards human tissues as an "anatomical gift").

Games, a new online game theory journal

This announcement came in today's email.

Dear All,
The first issue of Games, dated March 2010, has been published and is available under http://www.mdpi.com/2073-4336/1/1/
This first issue shows that, contrary to generally accepted practices, quick but rigorous refereeing and quick publication are feasible also in game theory. Counting both accepted and rejected papers, the average time from submission to first editorial response is currently 34 days, i.e. under 5 weeks. Concentrating on ultimately accepted papers, the overall average time from submission to publication online is currently 61 days. For me,
more instructive that these numbers have been the anecdotes. For example, I was astonished to see that it is perfectly possible to get highly detailed referee reports on a 60‐page, mathematically dense paper within a few weeks, and from established referees. Another rewarding experience concerns the reaction of authors, as for example when I asked an author of an experimental paper to conduct a full‐scale replication, expecting the revision to take months, and received the revision including the replication in a few weeks. Reasonable speed appears to be contagious.
It seems that the editorial delays we have grown used to are just an established but highly inefficient convention‐‐‐nothing more. Still, transitions from an inefficient equilibrium to a more efficient one can be notoriously difficult to implement. The first (short) issue has been completed, and the first paper in issue 2 is
already out, but we are still a long way from establishing the journal and the associated quick refereeing process. For this, I would like to ask for your help.
What can you do for the journal? First, talk about it and encourage good researchers to submit, quoting the speed of the editorial process. Second, if you are not already doing it, consider editing a special issue (feel free to contact me with your proposals). Third, consider submitting your own work. Related to the last point, currently Games would especially welcome literature surveys in your respective fields; although of course they would be submitted to the same rigorous (but quick!) refereeing process as any other paper, feel free to propose a topic so that the scope can be discussed in advance.
I would like to take this opportunity to thank you all for your support. Special thanks go to those who have already acted as referees and to the Guest Editors. I look forward to Issue 2!
Carlos Alós‐Ferrer
Editor‐in‐Chief, Games
‐‐
Frauke Muenzel, Managing Editor
Games Editorial Office
Molecular Diversity Preservation International (MDPI)
Kandererstrasse 25, CH‐4057 Basel, Switzerland
Tel. +41 61 683 77 34
Fax +41 61 302 89 18
E‐mail: games@mdpi.org
http://www.mdpi.com/journal/games/

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. "