Market Design

Thursday, February 10, 2011

Experimental conference and summer school at Barcelona in June

There will be lots to learn...

2nd LeeX International Conference on Theoretical and Experimental Macroeconomics, June 10-11, 2011at Universitat Pompeu Fabra. Keynote speakers are:Jean-Robert Tyran, University of Wiena, and Jordi Gali, CREI UPF. The conference organizers are: John Duffy, University of Pittsburgh Frank Heinemann, Technical University of Berlin, Rosemarie Nagel , Universitat Pompeu Fabra. Deadline Friday, April 1, 2011.

Summer school: Fourth Barcelona LeeX Experimental Summer School in Macroeconomics, June 6-9 2011 at Universitat Pompeu Fabra. The summer school organizers are: John Duffy, University of Pittsburgh Frank Heinemann, Technical University of Berlin, Rosemarie Nagel , Universitat Pompeu Fabra. Deadline 18 April 2011.

Wednesday, February 9, 2011

Wake Forest coach donates a kidney to player

The story is here, it was published yesterday, and I saw it only after yesterday's blog post of organ donation stories.

"When a coach says he would do anything for his players, it sounds like a cliché.

"Then there is Wake Forest baseball coach Tom Walter.

"On Monday, Walter donated one of his healthy kidneys to Kevin Jordan, a Wake Forest freshman outfielder talented enough to be drafted in the 19th round by the New York Yankees last year but sick enough to wonder if he would ever play again.

"Surviving became Jordan's challenge.

"Today, Walter and Jordan are recuperating together at Emory University in Atlanta, each with one healthy kidney and baseball in their futures.

"I wanted to help this young man," Walter, 42, said on a conference call last week. "When we recruit our guys, we talk about family and making sacrifices for one another. It's something we take very seriously."

"When no one in Jordan's family could give him what he needed, the baseball coach - for whom Jordan has never played a game - did."

Note that there's even an unraveling aspect to the story: the young man was drafted by the Yankees as a high school student.

HT: Thayer Morrill

Tuesday, February 8, 2011

Misc. organ donation stories

Here's a live donor kidney site run a bit in the style of a traditional matchmaker (שַׁדְּכָן‎) by an orthodox Jewish woman who donated a kidney: KidneyMatchmaker.com

But there remain religious objections to deceased donations in Israel, despite rulings in favor by senior rabbis, Haaretz reports: Despite donor card, soccer star Avi Cohen's family keeps hospital from taking organs after lobbying by rabbis
"The family of soccer star Avi Cohen has refused to donate his organs despite the fact that he signed a donor's card - something that has happened only once before in Israel's history.

"Cohen, 54, was declared brain dead Tuesday afternoon at Ichilov Hospital in Tel Aviv, where he had been in critical condition since suffering a motorcycle accident on December 20. The determination was made by a medical committee as required by law.

"Pursuant to Health Ministry regulations, Ichilov then asked his family for permission to use his organs. The family initially agreed, since he had signed the donor's card. But shortly before they were to sign the necessary forms, hospital staffers said, they were contacted by rabbis, some of whom even came to the hospital, and the rabbis dissuaded them.

"Though the Chief Rabbinate was involved in drafting the law on determining brain death that passed two years ago, some rabbis still do not recognize brain death, holding that death occurs only when the heart stops - at which point, most organs become useless.

"The hospital sources said that Sephardi Chief Rabbi Shlomo Amar personally called the family to urge them to approve the donation. But they ultimately sided instead with the rabbis who urged them to leave Cohen intact until his heart stopped, which happened yesterday morning.

"It was Amar - with approval from the Sephardi community's leading halakhic arbiter, Rabbi Ovadia Yosef - who issued the halakhic ruling that held brain death, rather than heart stoppage, to be the true moment of death, and enabled the brain death law to pass.

"Some 600,000 Israelis have signed donor's cards, but the cards have no legal force: When a signatory dies, family permission is still needed to donate organs. Still, the only previous case in which a signatory's family refused occurred over a decade ago."

A NY Times story deals with the question of why NY has relatively few organ donors

"For some, it’s a simple choice: when they die, they would like their organs to be used to save someone else’s life. But New York State doesn’t make it easy. People can sign up when they renew their drivers’ licenses, though that’s only once a decade, or they can go online and fill out an off-putting form, then print it out and walk it to a mailbox.

"A mailbox?

"The New York Organ Donor Network has decided it’s not even worth rolling out its new education campaign until the state makes it easier for people to sign up. People on the waiting list, meanwhile, keep dying. "

And it's not just in New York: Vatican Says Benedict No Longer an Organ Donor
"The Vatican says Pope Benedict XVI, who has long championed organ transplants, is no longer an organ donor.

"The pope's secretary Monsignor Georg Gaenswein addressed the issue in a letter to a German doctor who has been using the fact that Benedict possessed a donor card to recruit other donors.
"Vatican Radio, in a German language report this week, said Gaenswein wrote that while the former Cardinal Joseph Ratzinger's organ card dates to the 1970s it was rendered void when he became pope."

Monday, February 7, 2011

Through the looking glass of medical ethics: compatible pairs in kidney exchange

Some time ago my colleagues and I observed that there would be really large gains in terms of increased numbers of transplants from inviting compatible pairs into kidney exchange, largely because it would increase the supply of O donors.

(see Roth, Alvin E., Tayfun Sonmezand M.Utku Unver A Kidney Exchange Clearinghouse in New England American Economic Review, Papers and Proceedings, 95,2, May, 2005, 376-380.

As with many discussions of organ transplantation, discussions of efficiency are interspersed with discussions of ethics, and almost no good deed goes unquestioned (recall the story of the kidney doc who donated a kidney to a patient*). The current issue of Transplantation has a comment that takes issue with some of the prior discussion of ethics.

Compatible-Incompatible Live Donor Kidney Exchanges, by David Steinberg,Transplantation, 91(3):257-260, February 15, 2011.

Abstract: "The participation of an immunologically compatible donor-intended recipient pair in a kidney exchange that is unnecessary for them can significantly increase the number of kidneys available for transplantation. Despite their utilitarian value transplant ethicists have condemned this type of organ exchange as morally inappropriate. An opposing analysis concludes that these exchanges are examples of moral excellence that should be encouraged."

*Doctor's unique donation prompts ethical concerns: A Chicago-area nephrologist's gift of a kidney to her patient raises the question of whether doctors should be living organ donors.

Sunday, February 6, 2011

Nonsimultaneous kidney exchange chains produce more transplants than simultaneous chains

That's the conclusion of a new paper,
Ashlagi, Itai, Duncan S. Gilchrist, Alvin E. Roth, and Michael A. Rees, ''Nonsimultaneous Chains and Dominos in Kidney Paired Donation -- Revisited,'' American Journal of Transplantation, forthcoming, 2011.

The "revisited" in the title comes from the fact that the reverse conclusion was reached by an earlier paper in the same journal, due to a modeling error that unnecessarily constrained the length of non-simultaneous chains to be the same as simultaneous chains. (In practice, one of the main attractions of non-simultaneous chains is that they can be longer than chains in which all surgeries are performed simultaneously, since it is no longer necessary to have a different surgical team and operating room for each surgery.)

Here's the abstract of the paper:
"Since 2008 kidney exchange in America has grown in part from the incorporation of non-directed donors in transplant chains rather than simple exchanges. It is controversial whether these chains should be performed simultaneously (“domino paired donation”, DPD) or nonsimultaneously (“nonsimultaneous extended altruistic donor chains”, NEAD). NEAD chains create “bridge donors” whose incompatible recipients receive kidneys before the bridge donor donates, and so risk reneging by bridge donors, but offer the opportunity to create more transplants by overcoming logistical barriers inherent in simultaneous chains. Gentry et al. simulated whether DPD or NEAD chains would produce more transplants when chain segment length was limited to three transplants, and reported that DPD performed at least as well as NEAD chains. As this contrasts with the experience of several groups involved in kidney paired donation, we performed simulations that allowed for longer chain segments and used actual patient data from the Alliance for Paired Donation. When chain segments of 4-6 are allowed in the simulations, NEAD chains produce more transplants than DPD. Our simulations showed not only more transplants as chain length increased, but also that NEAD chains produced more transplants for highly sensitized and blood type O recipients."

One of the most exciting recent events in kidney exchange has been the revolution in using chains of transplants, inaugurated by Mike Rees and the Alliance for Paired Donation, which has really taken off since the publication in 2009 of the account of his first non-simultaneous extended altruistic donor (NEAD) chain:
Rees, Michael A., Jonathan E. Kopke, Ronald P. Pelletier, Dorry L. Segev, Matthew E. Rutter, Alfredo J. Fabrega, Jeffrey Rogers, Oleh G. Pankewycz, Janet Hiller, Alvin E. Roth, Tuomas Sandholm, Utku Ünver, and Robert A. Montgomery, “A Non-Simultaneous Extended Altruistic Donor Chain,” New England Journal of Medicine, 360;11, March 12, 2009

The new paper helps explain why this new kidney exchange technology has caught on so quickly.

Saturday, February 5, 2011

Can we make school choice more efficient?

A new paper by Eduardo Azevedo and Jacob Leshno addresses a recent puzzle in school choice: Can we make school choice more efficient? An Example

Here's their abstract:
"The deferred acceptance mechanism, currently used in the New York City and in the Boston public school systems, can produce Pareto-dominated assignments. When students are non-strategic a Pareto-dominating and efficient mechanism can be achieved by allowing some students to trade schools (e.g. Stable improvement Cycles, Erdil and Ergin 2008). We find that when students are strategic the equilibrium assignments of these mechanisms can be unstable with respect to the true preferences and can be Pareto inferior to the deferred acceptance equilibrium assignment."

The paper follows up on the Erdil and Ergin 2008 AER paper, and also on the paper by Atila Abudlkadiroglu, Parag Pathak and me which discusses the NYC high school match and shows that about a thousand NYC high school students could in principle be made better off
Abdulkadiroglu, Atila , Parag A. Pathak, and Alvin E. Roth, "Strategy-proofness versus Efficiency in Matching with Indifferences: Redesigning the NYC High School Match,'' American Economic Review, 99, 5, Dec. 2009, pp1954-1978.

That paper sets the stage for Azevedo and Leshno by observing that about 1,000 of the approximately 90,000 new high school students each year could have been given better matches if strategy-proofness were not a desiderata, and if their true preferences could be recovered without strategy proofness. So that raises the open question of what kind of preferences would be submitted to a system that tried to get these apparent welfare gains, and whether welfare gains could be achieved at equilibrium:
"Nothing is yet known about what kinds of preferences one could expect to be strategically submitted to such a mechanism, or what their welfare consequences would be. Consequently, there is room for more work to further illuminate the tradeoff between efficiency and strategy-proofness."

Azevedo and Leshno show that there's at least a possibility that attempting to improve welfare while sacrificing strategy-proofness could, in equilibrium, reduce welfare.

One of the exciting things about the modern school choice literature is how it has given rise to questions about matching that didn't arise in other applications (like to labor market clearinghouses). The special feature of school choice is the importance of how ties are broken, between between students who have equal priority for a given school that doesn't have capacity for all of them.

Azevedo and Leshno advance the discussion of how we should evaluate school choice algorithms, in the complex settings in which we're asked to design them. Their paper shows how strategy-proofness and welfare can be intertwined in subtle ways at equilibrium. There's a lot more to learn about this, so their short paper answers one question and raises many others.

Friday, February 4, 2011

Coalition Theory Workshop in Barcelona

Today and tomorrow: The 16th Coalition Theory Network Workshop Barcelona, February 4-5, 2011

Matching and market design are well represented.

Friday, Feb. 4

9:30 - 10:15 In-Uck Park "Internal Hierarchy and Stable Coalition Structures" (with Massimo Morelli)

10:15 - 11:00 Messan Agbaglah "Informal insurance: an approach by overlapping coalitions as merging of networks and groups"

11:30 - 12:15 Rémy Oddou "The effect of spillovers and congestion on the segregative properties of endogenous jurisdiction structure formation"

12:15 - 13:00 Francis Bloch "Endogenous formation of alliances in conflicts"

14:30 - 15:15 Emiliya Lazarova "Dynamic Multilateral Markets" (with Arnold Polanski)

15:15 - 16:00 Guillaume Haeringer "Learning to match" (with Hanna Halaburda)

16:30 - 17:15 Lars Ehlers "Strategy-proof Tie-breaking" (with Alexander Westkamp)

17:15 - 18:00 Florian Biermann "A Measure of Instability for Matchings in Marriage Markets"

Saturday, Feb. 5

9:00 - 9:45 Kalyan Chatterjee "Word of Mouth Advertising, Credibility and Learning in Networks" (with Bhaskar Dutta)

9:45 - 10:30 Agnieszka Rusinowska "Iterating influence between players in a social network" (with Michel Grabisch)

11:00 - 11:45 Sunghoon Hong "Strategic Network Interdiction" (with Myrna Wooders)

11:45 - 12:30 Andrea Galleotti "Network Trading Games" (with Daniele Condorelli)

14:00 - 14:45 Timo Hiller "The Friend of My Enemy is My Enemy: Alliance Formation and Coercion in Networks"

14:45 - 15:30 Alexandru Nichifor "Stability and Competitive Equilibrium in Trading Networks" (with John William Hatfield, Scott Duke Kominers, Michael Ostrovsky and Alexander Westkamp)
16:00 - 16:45 Jaromir Kovarik "(Anti-) Coordination in Networks" (with Friederike Mengel and José Gabriel Romero)

16:45 - 17:30 Ana Mauleon "Myopic or Farsighted ? An Experiment on Network Formation" (with Marco Mantovani, Georg Kirchsteiger and Vincent Vannetelbosch)

Thursday, February 3, 2011

Shift swapping in the Boston fire department

The Globe has an illuminating article on a system originally intended to allow Boston fire fighters to trade shifts with one another without money changing hands, that seems to have gotten out of control, possibly turning into a cash system.

Trading the call of duty for a call of convenience: A system that lets Boston firefighters swap shifts has turned into a costly free-for-all. Some barely work for years and never make up the time. The city does almost nothing about it.

"It is a familial courtesy as intrinsic to the culture of Boston firehouses as shared chicken dinners. When a firefighter can’t make his shift, a colleague steps in, on condition the favor will be returned.
"But there are scores of Boston firefighters whose shifts have been covered by others for weeks or months at a time, with no record they have ever reciprocated and worked off the debt.
"One firefighter, Gregory L. Burton, owes his firehouse comrades 554 shifts — nearly three years of work — for shifts he borrowed over five years while he was tending to a successful real estate business, according to department records.
...
"The lack of accounting — and the absence of limits that other fire departments routinely impose on shift swaps — has nurtured a subterranean culture in which some firefighters pay cash to others to work their shifts, or repay the obligation by doing outside work like home renovation projects for their firehouse creditors, according to interviews with several firefighters, who asked that they not be identified by name.
...
"One telltale sign that much of the debt has been settled privately: Fraser and Keating said not a single firefighter who is owed shifts has ever filed a complaint. Under-the-table cash payments would violate tax laws if the income is unreported.
...
"Shift-swapping is common in fire departments, but so are stringent controls on the practice, according to a Globe survey of big-city fire departments across the country. And the Boston Police Department, which permits its officers to swap shifts, turned over to the Globe records showing deficits to be virtually nonexistent."

Wednesday, February 2, 2011

College admissions in Texas: unintended consequences of the 10% rule

Under the headline Strategic Displacement, Inside Higher Ed covers the recent NBER paper
Jockeying for Position: Strategic High School Choice Under Texas' Top Ten Percent Plan, by Julie Berry Cullen, Mark C. Long, and Randall Reback.

Here's the abstract of the paper:
"Beginning in 1998, all students in the state of Texas who graduated in the top ten percent of their high school classes were guaranteed admission to any in-state public higher education institution, including the flagships. While the goal of this policy is to improve college access for disadvantaged and minority students, the use of a school-specific standard to determine eligibility could have unintended consequences. Students may increase their chances of being in the top ten percent by choosing a high school with lower-achieving peers. Our analysis of students’ school transitions between 8th and 10th grade three years before and after the policy change reveals that this incentive influences enrollment choices in the anticipated direction. Among the subset of students with both motive and opportunity for strategic high school choice, as many as 25 percent enroll in a different high school to improve the chances of being in the top ten percent. Strategic students tend to choose the neighborhood high school in lieu of more competitive magnet schools and, regardless of own race, typically displace minority students from the top ten percent pool. The net effect of strategic behavior is to slightly decrease minority students’ representation in the pool."

HT: Victor Shnayder

Tuesday, February 1, 2011

Kidney exchange when hospitals are the players

Itai Ashlagi and I have a new paper, motivated by recent developments in kidney exchange. Now that exchange is often proceeding through multi-hospital clearinghouses, we are going to have to think about how to give hospitals the incentive to participate fully, and enroll all of their patient-donor pairs into the exchange, and not just the ones that are difficult to match.

Ashlagi, Itai and Alvin E. Roth, "Individual rationality and participation in large scale, multi-hospital kidney exchange," working paper, January 2011.

Abstract: As multi-hospital kidney exchange clearinghouses have grown, the set of players has grown from patients and surgeons to include hospitals. Hospitals have the option of enrolling only their hard-to-match patient-donor pairs, while conducting easily arranged exchanges internally. This behavior has already started to be observed.
We show that the cost of making it individually rational for hospitals to participate fully is low in almost every large exchange pool (although the worst-case cost is very high), while the cost of failing to guarantee individually rational allocations could be large, in terms of lost transplants. We also identify an incentive compatible mechanism."

Monday, January 31, 2011

Carbon markets

The U.S. Dept. of Agriculture's Economic Research Service is running a conference today and tomorrow on the design of carbon markets: Carbon Market Design: Issues and Opportunities

Monday, January 31, 2011 Morning Session

9:00 a.m. Welcome remarks Kitty Smith, USDA, Economic Research Service, Administrator

9:10 a.m. Kickoff speaker Richard Sandor, Environmental Financial Products, Chairman and CEO; Chicago Climate Exchange, Founder

9:45 a.m. Carbon Markets Marketing, Jim Kharouf, Environmental Markets Newsletter, Editor

10:15 a.m. Lessons from Existing Environmental Markets for the Design of Climate Policy, Dallas Burtraw, Resources for the Future, Senior Fellow

10:45 a.m. Morning break (coffee and snacks)

11:00 a.m. Implementation of Regional Carbon Markets in the United States Jonathan Schrag, Regional Greenhouse Gas Initiative, Inc., Executive Director

11:30 a.m. The Role of Exchanges in Global Environmental Markets: Confidence, Stability, Transparency,Tom Lewis,Green Exchange, CEO

Afternoon Session

1:15 p.m. Moderating Price Volatility, Andrew Stocking, Congressional Budget Office, Analyst and Market Design Economist

1:45 p.m. Participation in the Carbon Market Albert S. “Pete” Kyle, University of Maryland, Robert H. Smith School of Business, Charles E. Smith Chair Professor of Finance

2:15 p.m. Discussion of Moderating Price Volatility and Participation in the Carbon Market Matthew Harding, Stanford University Department of Economics

2:30 p.m. Alternatives to Quantity-based Climate Policy, Peter Cramton, University of Maryland, Professor of Economics

3:00 p.m. Discussion of Alternatives to Quantity-based Climate Policy Henrik Hasselknippe, Green Exchange

Tuesday, February 1, 2011, Morning Session

9:00 a.m. Oil Prices and the Carbon Market, Perry Sadorsky, York University, Schulich School of Business, Associate Professor of Economics

9:30 a.m. Discussion of Oil Prices and the Carbon Market Nela Richardson, Commodity Futures Trading Commission

9:45 a.m. Agricultural Carbon Credits: Lessons Learned from the AgraGate Experience, Dave Miller
Iowa Farm Bureau, Research and Commodity Services, Director

10:15 a.m. Tradeoff Between Permits and Offsets, Adele Morris, Brookings Institution, Fellow

10:45 a.m. Discussion of Agricultural Carbon Credits: Lessons Learned from the AgraGate Experience and Tradeoff Between Permits and Offsets John Horowitz, Economic Research Service

11:00 a.m. Regulatory Perspective on Carbon Markets Eric Juzenas, Commodity Futures Trading Commission, Senior Counsel to the Chairman

Sunday, January 30, 2011

Fishing as an endangered but protected transaction

Here in New England, the plight of the fishing industry, and particularly of independent fishermen who operate small "day boats" from local harbors, is in the news. Three issues compete for attention: how to sustainably manage vulnerable fish populations, while keeping fishing profitable, particularly for the small independent fishermen who are seen as needing protection from larger, corporate fishing fleets. Small fishermen are to New England what small family farms are in other areas of the country.

Here's a story from the Globe.

Change in fishing rules altering storied industry: Regulators to look at ways to protect fleet
"PLYMOUTH — Scores of fishermen have stopped going to sea in the past year as controversial new rules take hold that could fundamentally alter the storied fishing economy, culture, and communities of New England.

"The region’s scenic harbors already shelter hundreds fewer fishing boats than a decade ago, but some worry that smaller boats may vanish altogether: There are some signs the new rules, which assign groups of fishermen a quota on their catch of cod and other bottom-hugging fish, could accelerate a trend of consolidating those boats into far fewer, more efficient vessels. Some small-boat fishermen are selling or leasing their allotment to others under the new rules because they cannot turn a profit.

"“This may not be the end of fishing, but it is the end of fishing as we know it,’’ said Steve Welch, as he tinkered on one of his two boats, the Holly & Abby, in Plymouth. Nearby, his dog Hudson ate mussels that seagulls dropped on an icy dock.

Welch leased the fishing privileges on both his boats and laid off three workers this year. “We are talking jobs, tradition, culture,’’ he said. “All that will be left are large boats owned by corporations with deep pockets.’’

...
"However, it is inevitable, Grant said, that some fishermen will be pushed out of business for good because there are still not enough fish for all the fishermen. And that is a hard thing to take.

“Fishing is not what [these fishermen] do; it is who they are,’’ Grant said. “It helps define the community. You can’t say that about selling tires. They are a cultural icon.’’
...
"Still, there are some bright spots with the new rules. Some $5 million in federal funds has been allotted to New England states to buy fishing permits and lease them back, often at a reduced price, to vulnerable fishermen. Some fishermen say the new rules are successful, allowing them to keep catching bottom-dwelling fish while others are diversifying to go after more abundant species.

But some fishermen, like Welch, wonder whether there will be small fishermen left when the fish finally come back.

“I’ve been fishing for 33 years,’’ Welch said, proudly pointing out how he overhauled the electrical and hydraulic system on the Holly & Abby. “I’m a small, independent business owner. That should have value.’’"

HT: Tim Gray

Market Design

Friday, February 11, 2011

Experiments in Industrial Organization

Research highlights

Thursday, February 10, 2011

Experimental conference and summer school at Barcelona in June

Wednesday, February 9, 2011

Wake Forest coach donates a kidney to player

Tuesday, February 8, 2011

Misc. organ donation stories

Monday, February 7, 2011

Through the looking glass of medical ethics: compatible pairs in kidney exchange

Sunday, February 6, 2011

Nonsimultaneous kidney exchange chains produce more transplants than simultaneous chains

Saturday, February 5, 2011

Can we make school choice more efficient?

Friday, February 4, 2011

Coalition Theory Workshop in Barcelona

Thursday, February 3, 2011

Shift swapping in the Boston fire department

Wednesday, February 2, 2011

College admissions in Texas: unintended consequences of the 10% rule

Tuesday, February 1, 2011

Kidney exchange when hospitals are the players

Monday, January 31, 2011

Carbon markets

Sunday, January 30, 2011

Fishing as an endangered but protected transaction

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