Report on Denver School Choice--first year

A Denver organization, A+ Denver,  reports on the first year of Denver's new school choice system, which seems to have gone well.

Evaluation of Denver’s SchoolChoice Process for the 2011-12 School Year
Prepared for the SchoolChoice Transparency Committee at A+ Denver
by Mary Klute, U. of Colorado, Denver

and

Assessment of Assignment Tool
by Dr. Gary Kochenberger, U. of Colorado, Denver

See also Diving deep into SchoolChoice by Robert Reichardt 
"The new choice process consolidated over 60 different processes into one.  A computer program was used to assign students to schools based on student preferences, number of available seats, and school preferences (e.g. siblings, residents, or auditions for Denver School of the Arts). A second round  is open now through August 31, 2012 for students who are not happy with their current assignment or did not enter the first round.

"A Transparency Committee of DPS administrators and principals along with community stakeholders was selected by A+ Denver to receive and interpret an evaluation report on thecomputer program used to make the assignments and a second on the information created by the choice process.  A+ Denver also provides spreadsheets of choice data by school.  

...

"The choice process worked. DPS was able to collect over 20,000 hand-written choice requests and implement a complex computer program to assign students to schools.

"There are huge differences in demand for schools. The differences are largest in high schools: Denver School of Science and Technology, Stapleton, had 8.2 first choice requests per available seat compared to Denver Online High School which had .01 first choice requests per seat.  This is a difference of 82,000%."

Denver school choice is an IIPSC project, see my earlier blog posts.

Living donors' stories

Narrative Inquiry in Bioethics (2, 1, Spring 2012) is devoted to a Narrative Symposium: Living Organ Donation

"As Elisa Gordon notes, the collection of stories represent the experiences of liver and kidney donors; donors whose organ was successfully and unsuccessfully transplanted into a recipient; related and unrelated donors; and donors who had overwhelmingly positive experiences, mixed experiences, and negative experiences. In these stories we read about a wide variety of motives for donation and concerns with the donation experience. We hope that the collection of personal narratives and commentaries by Drs. Dianne LaPointe Rudow and Paul Root Wolpe will lead to a better understanding of the current living donation process as well as improvements in that process for future donors."

Living Organ Donors’ Stories: (Unmet) Expectations about Informed Consent, Outcomes, and Care

pp. 1-6 | DOI: 10.1353/nib.2012.0001

Elisa J. Gordon

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Living Organ Donation

pp. 7-37 | DOI: 10.1353/nib.2012.0002

Laura Altobelli, Sherri Bauman, Janice Flynn, Andy Heath, Joseph Jacobs, Tim Joos, Amy K. Lewensten, Donna L. Luebke, Sarah A. McDaniel, Donald Olenick, Laurie E Post, Vicky Young

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An Altruistic Living Donor’s Story

pp. 7-10 | DOI: 10.1353/nib.2012.0018

Laura Altobelli

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Surgery for the Soul

pp. 10-11 | DOI: 10.1353/nib.2012.0008

Sherri Bauman

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Kidney Donation Story

pp. 11-14 | DOI: 10.1353/nib.2012.0010

Janice Flynn

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The Essence of Giving—A Transplant Story

pp. 14-17 | DOI: 10.1353/nib.2012.0012

Andy Heath

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Love—the Risk Worth Taking

pp. 17-19 | DOI: 10.1353/nib.2012.0014

Joseph Jacobs

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My Donation Journey

pp. 19-21 | DOI: 10.1353/nib.2012.0016

Tim Joos

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A Life For A Life: My Gift To My Dad

pp. 21-24 | DOI: 10.1353/nib.2012.0017

Amy K. Lewensten

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Lessons Learned: The Realities of Living Organ Donation

pp. 24-26 | DOI: 10.1353/nib.2012.0007

Donna L Luebke

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Sarah’s List Exchange Experience

pp. 26-29 | DOI: 10.1353/nib.2012.0009

Sarah A. McDaniel

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Accelerated Living Donation

pp. 29-31 | DOI: 10.1353/nib.2012.0011

Donald Olenick

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Liver Donor Nightmare

pp. 31-34 | DOI: 10.1353/nib.2012.0013

Laurie E Post

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Adrift After Donation

pp. 34-37 | DOI: 10.1353/nib.2012.0015

Vicky Young

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Personal Narratives: Living Organ Donation (Web Only Content)

Getting Our Child Off Dialysis

p. E1 | DOI: 10.1353/nib.2012.0019

Blake Adams

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A Living Donor’s Journey

pp. E2-E6 | DOI: 10.1353/nib.2012.0020

Anonymous One

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The Spare Kidney

pp. E6-E9 | DOI: 10.1353/nib.2012.0021

Michael Sauls

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Living Donors are People Too

pp. E9-E11 | DOI: 10.1353/nib.2012.0022

Christine Wright

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Gifts and Obligations: The Living Donor as Storyteller

pp. 39-44 | DOI: 10.1353/nib.2012.0003

Paul Root Wolpe

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The Gift of Life—Walking by Faith

pp. E11-E14 | DOI: 10.1353/nib.2012.0023

Shannon D. Wyatt

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Journey of an Altruistic, Non–designated Living Donor

pp. E14-E16 | DOI: 10.1353/nib.2012.0024

Cara Yesawich

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Experiences of the Live Organ Donor: Lessons Learned Pave the Future

pp. 45-54 | DOI: 10.1353/nib.2012.0004

Dianne LaPointe Rudow

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Who Gets What: the new economics of matchmaking and market design: Public Lecture

Sydney Ideas (Public Lecture): Who Gets What: the new economics of matchmaking and market design


What are markets and marketplaces? How do they work? How do they fail? How can we fix them when they’re broken? In recent years economists have stepped forward as market designers to try to craft answers to these questions. These questions are particularly difficult for matching markets, which are markets in which you can’t just choose what you want, but also have to be chosen. If a market has an application or selection procedure, it’s a matching market, and matching markets determine some of the most important transitions in life. Who goes to which schools and universities? Who gets which jobs? Who gets scarce organs for transplant? Professor Alvin Roth illustrates with examples of recent market designs, in school choice, labor markets and kidney exchange in the US.

And here's the press release: Harvard expert on making life changing markets work

Here's your invitation.

• Date: Tuesday 10 July, 2012
• Time: 6.00pm to 7.30pm
• Venue: Law School Foyer, Eastern Avenue, the University of Sydney (Click here for venue information)
• Cost: This event is free and open to all, with no ticket or booking required. Seating is unreserved and entry is on a first come, first served basis.
• 
  
• /span>

Indian surrogates bearing British babies

The Telgraph reports: how more and more Britons are paying Indian women to become surrogate mothers.

"There are now up to 1,000 clinics, all entirely unregulated, in the country, many specialising in helping Britons become parents.

"Couples and single people are paying an average of £25,000 a time to have children, getting around rules in the UK which make commercial surrogacy illegal.

"It is estimated that 2,000 births to surrogate mothers took place in the country last year, with most experts agreeing that Britain is the biggest single source of people who want to become parents in this way. Britain may account for as many as 1,000 births last year in India. In contrast there were 100 surrogate births recorded in Britain last year.
...
"Dr Sharma has chaired a committee which has drawn up proposals for industry standard. It would guarantee safety standards for the first time, outlaw sex selection, forbid women capable of childbirth making use of surrogacy and set up the first register of clinics, with a regime of inspections and sanctions for those which fail them.
...
"However the legislation has yet to be considered by India’s parliament and it could be many years before it becomes law. Dr Sharma’s committee has called for urgent action.
...
"Clinics in India offer fertility treatments which would-be parents in Britain would either be unable to have for legal reasons, or would face lengthy waits on the NHS to obtain.
...
"One clinic in New Delhi, The Birthplace of Joy, said that their patients were “100 per cent foreign” and estimated that as many as half of them were homosexual couples wanting to become parents."

College admissions exams in China

The NY Times reports: Test That Can Determine the Course of Life in China Gets a Closer Examination


"In a country where education is so highly prized, the score that a student earns after the days of testing at the end of high school is believed to set the course of one’s life. The score determines not just whether a young person will attend a Chinese university, but also which one — a selection, many Chinese say, that has a crucial bearing on career prospects.

"But debate appears to have grown more heated lately over the value of the gaokao (pronounced gow-kow). Critics say the exam promotes the kind of rote learning that is endemic to education in China and that hobbles creativity. It leads to enormous psychological strain on students, especially in their final year of high school. In various ways, the system favors students from large cities and well-off families, even though it was designed to create a level playing field among all Chinese youth.

"Last month, a 12-minute television segment railing against the exam by Zhong Shan, a well-known talk show host in Hunan Province, gained popularity on the Web and became a focal point for fury against the gaokao in particular and the Chinese educational system in general. Also widespread on the Internet were photographs taken in a Hubei Province classroom of students hooked up to intravenous drips of amino acids while cramming.

Will circumcision become a repugnant transaction in Germany?

A court in Germany has ruled that circumcising young boys for religious reasons amounts to bodily harm.

Earlier attempts to ban circumcision in California lost support because of the “grotesque anti-Semitic imagery" employed by activists in favor of the ban.

HT: Sven Seuken

Priority for _live_ organ donation in Israel

 I've recently posted about the new Israeli organ donation law which gives priority for deceased donor organs to those who have signed deceased donor cards themselves (see here and here and, earlier, here). However there's no provision to give priority to people who have made live donations (typically of a kidney).  Here's an article (in Hebrew) about a proposal to change that: 

http://www.ynet.co.il/articles/0,7340,L-4243900,00.html

Ron Shorrer provides a translation (he says he 'upgraded' the Google translation):

"The health Committee of the Knesset approved today (Monday) for the first reading the bill allowing prioritizing transplants to living organ donor, even if they donated to a relative. So far only ADI card holders  who needed a transplant received priority , but those who donated to their relative  remained outside the scope of the law, not winning this priority.

·  Living donors - to sign an ADI card, click here 

"These livedonors go through a process so difficult," said the discussion MK Gal-On (Meretz), who initiated the bill along with committee chairman MK Haim Katz (Likud). "There is no difference in suffering between those who donated to a stranger and those who donated to a family member. "Galon stressed that the bill has the support of the government.

"It took hard rehabilitation over three months," said Dina Abecassis Committee, which donated a kidney to her brother patient 15 years ago. "Family members should be encouraged to donate organs, since there is 99% match. I say that the Benefit also should apply retroactively to everyone who donated organs years ago, like me, not only from the entry into force of the law".

"Today people are donating to family members in the lack of choice," said Amos wing debate, Israel's national chairman kidney transplant patients. "They do it because there is hardly no donations from the dead . We need to reward even more the  family members who donate. "

"Representative of the Ministry of Health, Mr. Meir Broder praised the bill and noted that an organ donor is at health risk and therefore should be provided with a safety net as suggested in this amendment.

"Hundreds of Israeli patients are waiting right now  for an organ donation and the bill that we submitted  may encourage family members to pitch in and contribute," said committee chairman MK Haim Katz. "Later we will discuss the application of the legislative process to the benefit of family members who donated in years past."

Hannan Lecture at the Econometric Society Australasian Meeting ESAM12

Session 36: E.J. Hannan Lecture
 Session Chair: Nejat Anbarci, Deakin University
Session type: invited
Date: July 5, 2012 Time: 11:00 - 12:15
Location: Ballroom

 E.J. Hannan Lecture
Alvin Roth
Harvard University
  Kidney Exchange: Accomplishments and New Challenges

One of the interesting recent applications of market design has been to Kidney Exchange, which allows incompatible patients and their donors to exchange kidneys with other such pairs. Kidney exchange now takes place in the U.S., Europe, Asia, and Australia. It has grown as market design solutions have been found to various obstacles. However obstacles remain to further growth. Some of them are new: as kidney exchange has grown, it has become possible for hospitals to free ride on the public good it creates. I’ll discuss the history of kidney exchange from a market design perspective, and the current challenges.

 

Melbourne is a Centre for Market Design

I will be bringing coals to Newcastle when I speak tomorrow about market design at the Econometric Society meetings in Melbourne, July 3-6.

See the announcement below about the new centre. (One of its first activities will be a short course by Tayfun Sonmez.)

Official Launch of Centre for Market Design

Event	Official Launch of Centre for Market Design
Date	7th Jun 2012 5:00pm
	The Centre for Market Design is a collaboration between the University of Melbourne, the Commonwealth Treasury, and the Victorian Department of Treasury and Finance. Drawing on well established expertise in areas of economic design, and research strengths in the underlying disciplines of mechanism design, information economics, structural econometrics and experimental economics, the Centre will provide an institutional framework to build research capacity and to support ongoing policy collaboration. Queries to be directed to Preeta Philip, 03 8344 5290.

*************

And here's a news story on the Centre: Unique new centre launched

Econometric Society Australasian Meeting (ESAM12) July 3-6

In Melbourne, Australia...

Keynote Speakers
Jean Charles Rochet, University of Zurich, Presidential Address Dale Mortensen, Northwestern University (2010 Nobel Prize Winner in Economic Sciences) Alvin Roth, Harvard University Dani Rodrik, Harvard University Jeffrey Wooldridge, Michigan State University

The program

How should we pay for kidney exchange?

Rees, Michael A.,  Mark A. Schnitzler, Edward Zavala, James A. Cutler,  Alvin E. Roth, F. Dennis Irwin, Stephen W. Crawford,and Alan B.  Leichtman,“Call to Develop a Standard Acquisition Charge Model for Kidney Paired Donation,”American Journal of Transplantation, 2012, 12, 6 (June), 1392-1397.


Abstract:  We propose a Medicare Demonstration Project to develop a standard acquisition charge for kidney paired donation. A new payment strategy is required because Medicare and commercial insurance companies may not directly pay living donor costs intended to lead to transplantation of a beneficiary of a different insurance provider. Until the 1970s, when organ procurement organizations were empowered to serve as financial intermediaries to pay the upfront recovery expenses for deceased donor kidneys prior to knowing the identity of the recipient, there existed similar limitations in the recovery and placement of deceased donor organs. Analogous to the recovery of deceased donor kidneys, kidney paired donation requires the evaluation of living donors prior to identifying their recipient. Tissue typing, crossmatching and transportation of living donors or their kidneys represent additional financial barriers. Finally, the administrative expenses of the organizations that identify and coordinate kidney paired donation transplantation require reimbursement akin to that necessary for organ procurement organizations. To expand access to kidney paired donation for more patients, we propose a model to reimburse paired donation expenses analogous to the proven strategy used for over 30 years to pay for deceased donor solid organ transplantation in America.

Sir John Hicks Lecture at the SAET 2012, July 1 in Brisbane

Matching and Market Design talks at the SAET in Brisbane June 30 - July 3

I woke up in Auckland NZ this morning (Saturday already) on my way to Brisbane, and I'll be speaking about kidney exchange tomorrow (Sunday). There are a number of papers on matching and market design on the program, including these.


Market Design I (Sunday July 1,  11:00-13:00, Bldg 7 Rm 237)
Ning Chen
Room 234, Building 7
1. Ties Matter: Improving E ciency in Class Registration by Introducing
Ties
Ning Chen Nanyang Technological University
(ningc@ntu.edu.sg)
2. A Necessary and Su cient Condition for Stable Matching Rules to be
Strategy-Proof
Takashi Akahoshi Waseda University
(akahoshi@suou.waseda.jp)
3. Strategyproof Matching with Minimum Quotas
Peter Troyan Stanford University
(petetroyan@gmail.com)
Daniel Fragiadakis Stanford University
Atsushi Iwasaki Kyushu University
Suguru Ueda Kyushu University
Makota Yokoo Kyushu University
4. Experimentation in Democrcay
Vit alijs A. Butenko Center of Economic Research at ETH
Zurich (vbutenko@ethz.ch)
Hans Gersbach Center of Economic Research at ETH
Zurich



Market Design II  (Monday July 2, 8:30-11:30)
Tayfun Sonmez
Room 348, Building 63
1. College Admission Problem with Clear-In Ranks
Georgy Artemov University of Melbourne
(georgy@gmail.com)
2. Stability and Competitive Equilibrium in Trading Networks
Alexandru Nichifor University of St. Andrews
(alexandru.nichifor@gmail.com)
John William Hat eld Stanford University
Scott Duke Kominers University of Chicago
Michael Ostrovsky Stanford University
Alexander Westkamp University of Bonn
3. Matching with (Branch-of-Choice) Contracts at United States Military
Academy
Tayfun Sonmez Boston College
(tayfun.sonmez@bc.edu)
Tobias B. Switzer United States Air Force
4. Platform Markets and Matching with Contracts
Juan Fung University of Illinois at
Urbana-Champaign
(fung5@illinois.edu)
Chia-Ling Hsu University of Illinois at
Urbana-Champaign


Matching, Group Formation, and Evolutionary Games (Monday, July 2, 13:30-15:30)
Takako Fujiwara-Greve
Room 139, Building 8
1. Understanding Stable Matchings: A Non-Cooperative Approach
Yosuke Yasuda GRIPS (yyasuda@grips.ac.jp)
Michihiro Kandori University of Tokyo
Fuhito Kojima Stanford University
2. Group Formation and Heterogeneity in Collective Action Games
Toshimasa Maruta Nihon University
(maruta.toshimasa@nihon-u.ac.jp)
Akira Okada Hitotsubashi University
3. Perfect Foresight Equilibrium Selection in Signaling Games
Kenichi Amaya Kagawa University
(amaya@ec.kagawa-u.ac.jp)
4. Behavioral Diversity in Voluntarily Separable Repeated Prisoner's Dilemma
Takako Fujiwara-Greve Keio University
(takakofg@econ.keio.ac.jp)
Masashiro Okuno-Fujiwara Ryutu Keizai University and University
of Tokyo

Compensation for bone marrow donors is no longer being contested

After a long fight (see these posts), it appears that bone marrow donors can be compensated (if they donate in the right way:

Final Victory for Cancer Patients In Bone Marrow Donor Case

U.S. Attorney General Won’t Seek Supreme Court Review; Bone Marrow Donors May Now Be Compensated

HT: Bob Slonim

Unraveling of tech recruiting

Revenge of the Nerds: Tech Firms Scour College Campuses for Talent


"On college campuses these days, the top nerds are getting a taste of what it's like to be star jocks.

"For Maxwell Hawkins, a computer science and art major at Carnegie Mellon University, the moment came in March. A technology recruiting firm sent him a letter by FedEx urging him to drop out of his junior year and take his talents to work for a start-up.
... "The technology boom has created an acute shortage of engineers and software developers. The industry has responded by taking a page from the playbook of professional sports: identify up and comers early, then roll out the red carpet to lock them up.

"With the social media frenzy in full swing, promising students are now wrestling with decisions about whether to stay in school or turn pro.
...
"The National Basketball Association has a rule called "one and done" that requires players entering the draft to be 19 or have completed their freshman year of college. But some prospective programmers aren't even making it that far.

"Sahil Lavingia was a freshman at the University of Southern California in 2010 when he got an email from Ben Silbermann, chief executive and co-founder of the fast-growing online scrapbook Pinterest. Mr. Silbermann was looking for help building a version of Pinterest for the iPhone and happened upon a data tracking app developed by the self-taught Mr. Lavingia.

"Figuring the young student "seemed like a go-getter," Mr. Silbermann drove up to Berkeley from Silicon Valley to meet Mr. Lavingia, who was coming to the Bay Area for the USC-Berkeley football game. A few days later, Mr. Lavingia had an offer in hand and took a leave from school to take the job.

"Some companies are grabbing talented programmers even before they reach college. Luke Weber taught himself how to design computer games in high school and became one of the most popular contributors to Roblox Corp., a company that lets its subscribers play games developed by its users.

"After graduating, he attended a Roblox conference last June and met the head of the company's marketing department, who asked him if he wanted to shoot some videos to teach people how to make games. The videos turned into a design job, and now Mr. Weber, who has postponed plans to go to college, works three days a week for the company producing games and virtual goods for $25 an hour.

"At 18, he is the youngest employee of the company."

The internet and the market for summer rental housing

Along with all the first order effects of the internet, it has had big effects on small markets, like secondhand books and, it turns out, vacation rentals: The Summer Rental Rat Race.

"as more vacation-home owners have entered the rental business, with help from a growing collection of Web sites that make it easy to post listings, the competition to attract tenants has become fierce.

"“Real estate agents who want to sell you a house will tell you that you can make money off it,” Mr. Johnston said. “Well, I did 20 years ago, but I don’t anymore.”

"There is often money to be made in vacation homes, but as the number of listing services has increased, so have the number of properties posted for rent. For example, HomeAway.com, one of the most popular sites, says it has more than 300,000 rentals worldwide.

"Numbers like that are forcing casual landlords to learn how to make their homes appear higher in search results, to track prices by monitoring their neighbors’ listings, and to deal with customer-service headaches like a negative Yelp-style review from renters.
...
"HomeAway listed 304 homes for rent in the Catskills in 2008; now it has roughly 520 homes available. Along the Jersey Shore over the same time frame, listings increased to 2,200 from about 700; in the Hamptons they jumped to 750 from 270.
...
"HomeAway owns another popular Web site, VRBO, which stands for “vacation rentals by owner.” But at these and other HomeAway sites, homes posted by professional property managers now account for 27 percent of the listings.
...
“We see that as a net benefit for our travelers,” said Jon Gray, HomeAway’s vice president for North America. “It gives more choice to them.”
...
"It also creates more competition for individual homeowners, who themselves have more rental listing services to choose from. The options include global players like HomeAway and FlipKey, which is owned by TripAdvisor, and specialized sites like Gite.com, which lists holiday homes in France."

University of Chicago adds a Z-list admissions option

The Chicago Maroon reports on an unexpectedly large class of 2016, as applications continue to grow, acceptance rates to fall, and the yield rate (the percentage of accepted students who decide to attend) rose. And Chicago has adopted an unusual admissions option previously seen at Harvard, the Z-list*.

"More students than expected have accepted a spot in the College’s class of 2016, pushing University officials to balance the U of C’s increasing popularity and its commitment to an intimate undergraduate experience.

"The incoming freshman class will comprise approximately 1,525 students, 125 more than the College’s consistent target size, according to University spokesperson Jeremy Manier.

"The number of students who accepted an offer of admission—the “yield rate”—rose to 46.8 percent, up 6.9 percentage points from last year. This is the first year that the yield rate strayed from the 36–40 percent range since 2007, even as the acceptance rate continued to decline.
...
"The College only accepted 20 transfer students, instead of the usual 40 or 50.

"The College is keeping a “z-list” option for the first time, offering applicants admission into the class of 2017 if they first take a gap year. Manier said that between 20 and 30 students are expected to accept that option.
************

*Note that the Z-list option is different from an acceptance simply deferred for a year, because it puts a condition on what the applicant can do in the intervening year (he/she can't enroll in another course of study...)

 HT: Scott Kominers

Girls' lacrosse camps and college admissions

College admissions begins early for high school and even middle school athletes, not just in big money sports like men's football and basketball, but for many sports, including women's lacrosse. Some of it starts with summer camps:
Northwestern Takes Game Directly to Eastern Recruits

"Northwestern has developed a following in the Northeast thanks to a pipeline built by Coach Kelly Amonte Hiller, who holds girls lacrosse camps in New York and Massachusetts each summer.

"Amonte Hiller, who also runs camps at Northwestern, said her main focus was promoting the sport. But she is aware of the other benefits, as more than half of her players during the past 11 years have been former campers. Of the 34 current Wildcats, 24 are from New York, New Jersey or Massachusetts. 

...

"Coaches routinely run summer camps at their universities. They are a way to raise money and visibility while serving as an initial meet-and-greet with potential recruits.

"But it is uncommon for a coach to take a camp out of state. Stacey Osburn, an N.C.A.A. spokeswoman, said basketball camps must be held within 100 miles of the university, and a football camp must be held in the university’s state or within 50 miles of its campus.

There are no restrictions for lacrosse camps, Osburn said. And since high school lacrosse’s densest and most talent-rich areas are still in the Northeast, out-of-town camps are an attractive option for coaches. 

...

“The first camp I went to, Kelly came right up and introduced herself,” said the senior midfielder Alex Frank, a Westwood graduate. “It had a big impact, having that relationship with her when I was just entering middle school. And as I got older, I knew what her coaching style was and I was comfortable with her.”

"Wildcats midfielder Shannon Smith, a native of West Babylon, N.Y., started attending Amonte Hiller’s camp on Long Island as a fifth grader.

“Kelly would walk around to all the different fields making sure she knew the kids,” said Smith, a 2011 Tewaaraton Award winner. “You were always shocked how she knew a lot of the kids before camp even started.” 

Kidney exchange pilot program: progress report

The official name is the OPTN national kidney paired donation pilot program (KPDPP). The latest news release reports that in March 2012 there were 110 transplant centers enrolled.

However the report also notes that "as of this writing" there are only 129 patients enrolled. That's just about one patient per program. And since 2010 a total of 19 transplants have been performed to date.

I'm hoping that the program will take a look at this participation problem.

Here's a bit of good operational news from a recent announcement:

"Match run frequency increased to twice a month

The goal of the OPTN Kidney Paired Donation Pilot Program (KPDPP) is to increase the number of transplants for candidates who have a willing but incompatible living donor. One way to do this is to increase the number of match runs to more than one a month, which was recently requested by the KPDPP work group and many of the 118 participating transplant centers."

Experiment on Medicare auctions

Charlie Plott and two of his students have a recent QJE paper that employs an experiment to make a point about market design. They study the Medicare procurement auction that has been criticized by Peter Cramton: see my previous posts here, here and here.

 The CMS Auction: Experimental Studies of a Median-Bid Procurement Auction with Nonbinding Bids Brian Merlob Charles R. Plott Yuanjun Zhang
Quarterly Journal of Economics Volume 127, Issue 2Pp. 793-827

 Abstract We report on the experimental results of simple auctions with (i) a median-bid pricing rule and (ii) nonbinding bids (winning bids can be withdrawn)—the two central pillars of the competitive bidding program designed by the Centers for Medicare and Medicaid Services (CMS). Comparisons between the performance of the CMS auction and the performance of the excluded-bid auction reveal the problematic nature of the CMS auction. The CMS auction fails to generate competitive prices of goods and fails to satisfy demand. In all proposed efficiency measures, we find the excluded-bid auction significantly outperforms the CMS auction

Here's a brief news story about the article: Medicare auction will face severe difficulties, research shows 


"Unlike standard auctions, however, the CMS auction was designed with two unorthodox rules. First, the eventual selling price is set at the median of all of the winning bids. Second, bids are nonbinding, so companies can change their mind once the prices are set.

"Critics say that these rules cultivate a harmful bidding strategy. To ensure a winning bid, each company will make a very low offer; this carries no risk, because the companies can cancel their bid if the median price turns out to be too low. The result is that participants in the auction will tend to make low-ball bids, assuring that the median price will also be very low—so low, in fact, that few of the companies can actually afford it, leading them to cancel their offers. At the extreme, nothing is bought or sold and, Plott says, "the auction crashes. It's just not an effective auction."

"And what will happen then, critics warn, is that the government will end up negotiating prices with individual companies—negating the whole point of a competitive-bidding scheme in the first place. "You can see immediately from theoretical arguments that the potential for disaster is built right in the strategic structures," Plott says.

"To determine if such theoretical predictions translate into real-world behavior, it is essential to examine experimentally how people behave in an actual auction, says Plott—who, for the last 30 years at Caltech, has been developing experimental techniques to test economic theories. He posed the problem to his experimental economics (EC 160) class. Two of his students, Merlob and Zhang, took up the challenge and spent a year researching, designing, and conducting experiments to test that behavior.

"The team used computers at Caltech and the University of Maryland to run a simplified version of the CMS auction and several other auction types; one, for example, followed more standard rules, with binding bids and prices set at the lowest bid that did not win, instead of the median of all winning offers. Each auction involved 12 or 16 bidders (student volunteers from Caltech and the University of Maryland), who first had to pass a quiz showing that they understood how the auctions worked. The volunteers were given just one item to sell—a generic "thing" (since the bidders' behavior should be the same in a given auction type, regardless of the item being sold)—each at a different cost to them.

"The Caltech team also examined the effect of other auction features, such as whether the costs of each item for each bidder are public knowledge and the effect of charging bidders to participate.

"The results, the researchers say, convincingly support critics of the CMS auction design. "It's pretty disastrous what the bidders ended up doing," Zhang says. In the simulated CMS-type auction, some people bid $0, and the "government" was not able to buy all the items it needed. The experiments also showed that a standard auction is much more efficient and successful: the government was able to buy all the items it needed, and the bidders who had the lowest costs were the winners.

"Using this experimental approach, the researchers were able to pinpoint the fundamental problem of the CMS auction design: the two rules. "If you just get rid of one of those two rules, it doesn't help—you still have problems," Plott explains. "So you have to get rid of both of them."