I'll post market design related news and items about repugnant markets. See also my Stanford profile. I have a general-interest book on market design: Who Gets What--and Why The subtitle is "The new economics of matchmaking and market design."
Here is its table of contents. (Google Translate is helpful but far from perfect in reading the article for those of us who are linguistically impaired...)
Plan de l'article
1. Introduction
2. Roth et la répugnance : le cas des organes
2.1. La solution marchande au manque d’organes
2.2. Le rejet de la solution marchande et la solution de Roth
3. Les critiques de la solution marchande
3.1. Motivation et effet d’éviction
3.2. Commerce de détresse et liberté du donneur
4. Donner corps à la répugnance
4.1. Conventions, marquage et incitation : du marchand et du non marchand
4.2. Don-contre-don et limite de la solution marchande
5. Conclusion
Here's a short (4 minute) teaching video put together by the CORE Project ("Teaching Economics as if the last three decades had happened") from a much longer videotaped discussion on market design, matching markets, kidney exchange and repugnant transactions.
Here's a link to a CORE class that uses this video:
Will the United Kingdom of England, Scotland, Wales and Northern Ireland break up, following the 52% to 48% vote for the UK to leave the European Union? (Scotland and Northern Ireland voted to remain in the EU...).
Ken Rogoff has a characteristically well-written article (Britain’s Democratic Failure) arguing that such momentous decisions should be taken by super-majorities, not by a simple majority.
"The real lunacy of the United Kingdom’s vote to leave the European Union was not that British leaders dared to ask their populace to weigh the benefits of membership against the immigration pressures it presents. Rather, it was the absurdly low bar for exit, requiring only a simple majority. Given voter turnout of 70%, this meant that the leave campaign won with only 36% of eligible voters backing it. This isn’t democracy; it is Russian roulette for republics. A decision of enormous consequence – far greater even than amending a country’s constitution (of course, the United Kingdom lacks a written one) – has been made without any appropriate checks and balances."
Scotland, of course, has voted in the past to remain part of the UK--might it vote differently in the future? By a similarly narrow margin?
"SAN FRANCISCO — Brian Chesky, chief executive of Airbnb, made a vow this month to root out bigotry from his business.
His online room-sharing company has recently been grappling with claims of discrimination, with several Airbnb users sharing stories on social media about how they were supposedly denied a booking because of their race. The issue came into the open in December, when a working paper by Harvard University researchers found it was harder for guests with African-American-sounding names to rent rooms through the site.
“This is a huge issue for us,” Mr. Chesky said at a company event in San Francisco in early June. “We will be revisiting the design of our site from end to end to see how we can create a more inclusive platform.”
But even as Mr. Chesky promised to stamp out racism from Airbnb, the company’s class-action litigation policy makes it tough — if not impossible — for customers to push the start-up to make any substantive changes on the issue. Airbnb requires that people agree to waive their right to sue, or to join in any class-action lawsuit or class-action arbitration, to use the service.
That clause, known as a class-action waiver, crops up whenever someone logs into Airbnb’s site. In March, the company updated its terms of service for new users, partly tohighlight that clause. Last month, Airbnb users were unable to log in and use their accounts until they agreed to the updated terms, including the class-action waiver language.
...
"For Airbnb, an effective response to discrimination claims is needed to blunt any fallout on its business. The company, valued at about $25 billion, has hosts in more than 34,000 cities and 191 countries and is positioning itself as an alternative to hotels. Airbnb recently raised $1 billion in debt to help finance its growth, according to a person familiar with the deal who spoke on the condition of anonymity because the transaction is not public. The credit facility wasreported earlierby Bloomberg.
Airbnb’s expansion depends partly on whether people of different nationalities and ethnicities feel welcomed to the platform in the same nondiscriminatory way that they are welcomed at international hotel chains. Two rival room-sharing services, Innclusive and Noirbnb, are now marketing themselves as services that provide inclusive and safe short-term rentals for people of any race or ethnicity.
Ms. Murphy, the Airbnb adviser, said the company recognized that eliminating discrimination was in its best interests. She said Airbnb’s relative youth — the company was founded in 2008 — meant it could deal with the issue in a more agile way than companies with entrenched cultures that may have needed the pressure of litigation to do the right thing.
“Airbnb is part of a new area of commerce, and the conditions for transactions are still developing,” she said. “That’s why it’s important to get it right.”
"Shady internet lenders in China are reportedly coercing female college students to provide nude pictures of themselves as collateral – a loan-for-porn scheme that has prompted anger on the country’s internet.
Under the arrangement reported by state media this week, some college students have agreed to send photos of themselves naked, holding their identification cards, to potential lenders. In exchange, they became eligible for higher loan amounts – two to five times the normal sum, the state-run Beijing Youth Daily reported.
Lenders tell the students they will publish the photos online if the loans are not repaid on time, often at usurious interest rates.
According to state media, the loan scheme is taking place on JD Capital’s Jiedaibao website. Jiedaibao is a platform where individuals - often friends and acquaintances – can lend or borrow money, striking their own arrangements."
"The US government has quietly dropped its campaign for an international ban in the trade of polar bear parts, which would have given the practice the same outlaw status as the elephant ivory market.
The US Fish and Wildlife Service has spent several years attempting to ban the overseas trade of polar bear skins, teeth, paws and other parts from Canada, which permits the hunting of the Arctic predators.
"The US’s bid to ban the polar bear trade has garnered support from the UK, Germany and Russia but has been opposed by Canada, which insists that hunting is sustainable and an important cultural practice of the native Inuit people. Hunting can also generate income for communities, with tourists paying up to $50,000 for the chance to shoot a polar bear."
Here's an article (gated) from a recent issue of Transplantation, describing how the transplant program in Shiraz is discouraging patients from the (legal) market there for buying kidneys from living unrelated donors (they impose a six month waiting time for such transplants). Most patients who have transplants at Shiraz are receiving deceased donor kidneys.
Abstract: Limited organ availability in all countries has stimulated discussion about incentives to increase donation. Since 1988, Iran has operated the only government-sponsored paid living donor (LD) kidney transplant program. This article reviews aspects of the Living Unrelated Donor program and development of deceased donation in Iran. Available evidence indicates that in the partially regulated Iranian Model, the direct negotiation between donors and recipients fosters direct monetary relationship with no safeguards against mutual exploitation. Brokers, the black market and transplant tourism exist, and the waiting list has not been eliminated. Through comparison between the large deceased donor program in Shiraz and other centers in Iran, this article explores the association between paid donation and the development of a deceased donor program. Shiraz progressively eliminated paid donor transplants such that by 2011, 85% of kidney transplants in Shiraz compared with 27% across the rest of Iran's other centers were from deceased donors. Among 26 centers, Shiraz undertakes the largest number of deceased donor kidney transplants, most liver transplants, and all pancreas transplants. In conclusion, although many patients with end stage renal disease have received transplants through the paid living donation, the Iranian Model now has serious flaws and is potentially inhibiting substantial growth in deceased donor organ transplants in Iran.
Each morning when I manage this blog I erase spam comments, and many of them relate to kidney sales. You can see typical ones on the Google+ page of the (apparently mis-spelled) Appollo Hospital in India.
So I noted with interest this recent story about arrests connected to that hospital.
"NEW DELHI: Delhi Police have traced at least three recipients and five donors in connection with the international kidney racket linked to Apollo Hospitals in Delhi, even as the investigators sought legal opinion regarding slapping charges on them.
Five persons, including two personal secretaries of a nephrologist in Apollo Hospital, have been arrested in connection with the kidney racket which is believed to have its ramifications in countries including Sri Lanka and Indonesia, an official privy to the investigation said.
Till this afternoon, three of the recipients were traced in Kolhapur, Jammu and Kashmir and Ghaziabad.
Prima facie the recipients shelled out over Rs. 40 lakh for each transplant, of which not even 10 per cent reached the donor, the official said.
He further said, the police have traced over five donors, including three women, who are presently admitted in a hospital in Delhi.
During investigation it came to light that the gang members used to prepare forged papers to establish the relationship between donors and recipients, to adhere to the law.
The police have come across five cases in Apollo Hospital, in which the donors were shown as wife, brother, father or brother-in-law (2 cases) of recipients, the official said, adding that while average time of hospital stay for the donors was six days, for the recipients it was 12 days.
Meanwhile, the police have sought legal opinion in slapping charges on the donors and recipients under relevant provisions of law. Lawyers have been consulted for the purpose, the official said.
The accused arrested so far in the case include Aditya Singh and Shailesh Saxena, who worked as personal secretaries of Apollo Hospital doctors for 3-4 years, and three touts identified as Aseem Sikdar, Satya Prakash and Devashish Moulik.
The touts used to lure financially poor people from West Bengal, Uttar Pradesh and other parts of the country for donating kidney. Mr Moulik landed in the police net following a fight with his wife, whose kidney he had sold off.
Medical tests of recipient and donor were conducted and once the compatibility match was done, operations were conducted at Apollo Hospital in southeast Delhi.
"We are cooperating and providing all information required to help the police in their investigation pertaining to the alleged kidney sale racket," said a press statement by Indraprastha Apollo Hospital."
NBER Working Paper No. 22309 Issued in June 2016 NBER Program(s): CHLS
The standard Beckerian analysis of marriage market equilibrium assumes that allocation within marriage implements agreements made in the marriage market. This paper investigates marriage market equilibrium when allocation within marriage is determined by bargaining in marriage and compares that model with the standard model. When bargaining in marriage determines allocation within marriage, the marriage market is the first stage of a two-stage game. The second stage, bargaining in marriage, determines allocation within each marriage. This analysis is consistent with any bargaining model with a unique equilibrium as well as with Becker's "altruist model," the model that underlies the Rotten Kid Theorem. Marriage-market participants are assumed to rank prospective spouses on the basis of the allocations they foresee emerging from bargaining in marriage. The first stage game, the marriage market, determines both who marries and, among those who marry, who marries whom (assortative marriage). When bargaining in marriage determines allocation within marriage, the appropriate framework for analyzing marriage market equilibrium is the Gale-Shapley matching model, not the Koopmans-Beckmann assignment model. These models have different implications for who marries, for who marries whom, and for the Pareto efficiency of marriage market equilibrium.
"A black market in Jewish graves is hiding in plain sight on the classified pages.
"Defunct Jewish burial societies have been selling cemetery plots at bargain basement prices through classified ads on Craigslist and in the print edition of the Forward — even though New York and New Jersey state laws bar these sales.
"Each sale of a New York grave by a burial society on the open market could be punishable by up to six months in jail, according to the state’s top cemetery regulator, though no one has ever been prosecuted. New Jersey law carries no such penalties, but still prohibits the sales.
...
"Only cemeteries are generally allowed to sell cemetery plots on the open market in New York and New Jersey. But in the two states’ Jewish cemeteries, mutual aid societies, called landsmanschaften, own huge inventories of empty graves. Founded at the turn of the past century by Jewish immigrants from the same town or region in Europe, the societies bought up large tracts of cemetery land, erected stone gates lined with the names of the societies’ officers and readied plots for their dues-paying members.
"Today, many of those societies and congregations have disappeared, leaving behind empty, unclaimed graves.
"As the societies have withered away, control of the organizations and their assets has passed down within families. The officers who now run the landsmanschaften — often the children or grandchildren of earlier officers — have found themselves responsible for cemetery land worth hundreds of thousands of dollars."
"He may be the chief executive of Denver’s largest marijuana dispensary, ground zero for America’s fastest growing industry, but Andy Williams struggles with a lot of financial hurdles.
The First Bank of Colorado closed the accounts of everyone in the family business, Medicine Man Technologies, including children who have no part in the industry. Williams can’t take on any investment and needs to fund expansion through personal loans from friends and family.
Customers can only pay in cash; banks refuse to hold his money and everyone from employees to contractors need to accept cash payments. Employees, who can’t prove their income as a result, often struggle to get loans and mortgages.
Furthermore, section 280E of the US tax code prohibits the deduction of expenses related to controlled substances for tax purposes, and Williams predicts that he gives the internal revenue service an additional $600,000 each year as a result of business expenses that can’t be written off.
While recreational marijuana legalisation is well on its way in states like Colorado, it remains illegal at the federal level, stifling the growth and innovation of the industry’s first movers.
Meanwhile, north of the border, Canadian prime minister Justin Trudeau has vowed tolegalise recreational marijuana consumption on a federal level, opening the door to investment, less restrictive tax policies and banks that can treat the marijuana industry like any other. While legalisation hasn’t yet taken place in Canada, when it inevitably does American marijuana businesses may suddenly find themselves at a disadvantage."
8:30 – 9:00 AM: REGISTRATION AND BREAKFAST 9:00 – 9:15 AM: INTRODUCTION Dean Peter Henry, NYU Stern School of Business 9:15 – 10:15 AM: SESSION 1: KEYNOTE ADDRESS “Kidney Exchange: Where We Are and Where We May Be Going,” Alvin Roth, Craig and Susan McCaw Professor of Economics and 2012 Nobel Memorial Prize Recipient in Economic Sciences, Stanford University 10:15 – 10:30 AM: BREAK 10:30 – 12:00 PM: SESSION 2: RIDE-SHARING AND ON-DEMAND PLATFORMS Talks: “Operations in the On-Demand Economy: Staffing Services with Self-Scheduling Capacity,” Martin Lariviere, John L. and Helen Kellogg Professor of Managerial Economics & Decision Sciences, Kellogg School of Management “Surge Pricing at Uber,” Garrett Van Ryzin, Head of Dynamic Pricing Research, Uber; Paul M. Montrone Professor of Private Enterprise, Columbia Business School “Smarter Tools for (Citi)Bike Sharing,” David Shmoys, Laibe/Acheson Professor of Business Management and Leadership, Cornell University 12:00 – 1:30 PM: LUNCH (ROOM 5-50, 5TH FLOOR) 2 1:30 – 2:30 PM: SESSION 3: EMPIRICS OF PRICING Talks: “Monitoring Costs and the Design of Online Marketplaces,” Kostas Bimpikis, Associate Professor of Operations, Information and Technology, Stanford GSB “Price Floors and Preferences: Evidence from a Minimum Wage Experiment,” John Horton, Assistant Professor of Information, Operations and Management Sciences, NYU Stern School of Business 2:30 – 2:45 PM: BREAK 2:45 – 4:15 PM: SESSION 4: TRUST AND REVIEWS Talks: “The Welfare Impact of Consumer Reviews: A Case Study of the Hotel Industry,” Greg Lewis, Senior Researcher, Microsoft “Provably Trustworthy Dark Pools,” David Parkes, George F. Colony Professor of Computer Science and Area Dean for Computer Science, Harvard University “The Effect of Online Reviews on Physician Demand: A Structural Model of Patient Choice,” Mor Armony, Associate Professor of Information, Operations, & Management Sciences, NYU Stern School of Business 4:15 – 4:45 PM: BREAK 4:45 – 5:45 PM: SESSION 5: DIGITAL ADVERTISING AND AUCTIONS Talks: “Online Mechanisms for Repeated Auctions and Ad Selection,” Vahab Mirrokni, Principal Researcher, Google “Bundling Over Time and Martingale Auctions,” Santiago Balseiro, Assistant Professor, Decision Sciences, Duke University
Here's a video of the plenary talks/announcements at the White House Organ Summit yesterday. I give the last brief talk, from minute 43-48. (5 minute talks are hard:). I report on the plan to start some nondirected donor kidney exchange chains with deceased donor kidneys at Walter Reed, which has some flexibility in the allocation of deceased donor kidneys.
Here's the text of my five-minute speech (which I wrote out in advance, to stay on script and keep on time):
"White House
Organ Summit: Deceased Donor Chains
I’m Al Roth,
an economist at Stanford.
Most people
waiting for transplants are waiting for kidneys. And kidneys are special,
because healthy people have two and can remain healthy with one. So kidneys can
be donated by living as well as deceased donors. Each year in the U.S. we transplant over
5,000 living donor kidneys, along with over 11,000 deceased donor kidneys.
Kidney transplantation is also special: it is both
the best treatment for kidney failure, giving recipients many more years of
life—and it is also the cheapest treatment. The American health care system
saves over $250,000 in five years after a transplant, because dialysis is much
more expensive than transplantation and post-transplant care.
I’m going to tell you now about how
some living donor kidney transplants are organized, as background for one of
the quite concrete announcements we have today.
Sometimes a
person is healthy enough to donate a kidney but can’t give to the patient he
loves, because kidneys have to be biologically compatible. This opens up the
possibility of kidney exchange (and exchange is where economists come in).
Kidney exchange is a kind of matching market in which
patient-donor pairs can donate compatible kidneys to one another so that each
patient gets a compatible kidney. For example, if you and I are healthy enough
to donate a kidney, but can’t donate to the patient we love, maybe my kidney is
compatible with your patient and yours with mine, and so a simple exchange
between two patient-donor pairs can make two additional transplants possible.
In the last 10-15 years, kidney exchange has become a standard part of American
medicine, resulting in thousands of additional transplants.
Sometimes a non-directed donor comes
forward—an altruistic donor who wishes to donate a kidney, and doesn’t have a
particular patient in mind. These donors can spark chains of transplants that
help patient-donor pairs in the kidney exchange pool, and patients on the deceased
donor waiting list who don’t have a living donor. Some of these chains can
produce many transplants, ever since we have learned to organize them as Non-simultaneous
chains, in which the non-directed donor initiates a chain by giving to a
patient-donor pair whose donor then gives to another pair, etc., most often
ending with a donation to someone on the waiting list who doesn’t have a living
donor. These chains can be long because
they don’t have to be conducted simultaneously since every pair receives a
kidney before giving one, so that they don’t risk giving a kidney and not
getting one. Mike Rees who is here today
organized the first non-simultaneous chain, which had twenty people--ten donors
and ten transplant recipients--in the picture that was eventually published in
People Magazine.
The average
non-directed chain produces five transplants. That is, if someone offers to
donate a kidney to start a chain - someone offering to help a stranger with
this amazing gift of a kidney and a life free from dialysis - then on average,
that one donor's gift will start a chain which produces 5 transplants
With that in
mind, earlier this year, several eminent surgeons and I published an article in
the American Journal of Transplantation noting that deceased donor kidneys are
almost all non-directed. So we proposed that we should occasionally start non-directed
donor chains with deceased donor kidneys – which are non-directed donor kidneys
that today are used to produce just a single transplant. Carefully done, this
could substantially increase the number of transplants for all patients –both
those waiting without a living donor and those waiting for a kidney exchange.
Today,
surgeons at Walter Reed who are here today have announced that they are going
to pilot this idea through the military share program, which gives
them the flexibility to allocate certain deceased donor kidneys to the benefit
of veterans and service members. This new initiative at Walter Reed may soon
show us how to move forward on a larger scale in using some deceased donor
organs to start chains of multiple transplants.
To
summarize, kidney chains can play an important role in increasing transplants.
Since the first long non-simultaneous non-directed donor chain was organized by
Dr Rees in 2007, thousands of kidney exchange transplants have been
accomplished, more than half through non-directed donor chains. These save both
lives and money by increasing the number of transplants. So we should take good
care of our non-directed living donors—and there is growing consensus that we
should at least figure out ways to reimburse all donors for their financial costs,
including lost wages. And we should, in gratitude to our deceased donors, make
the best use possible of their non-directed donation.
I’d like to
personally thank Walter Reed for their initiative in pioneering the use of
deceased donor kidneys to start kidney exchange chains that will increase
donations and benefit both those waiting for deceased donors and those waiting
for exchange with other patient donor pairs. Starting kidney transplant chains
with deceased donor kidneys has the potential to be a very significant
innovation."
****************
Here's a link to my post on our AJT article (by Melcher, Roberts, Leichtman, Roth, and Rees) advocating for starting kidney exchange chains with deceased donor kidneys:
"BETHESDA, Md., June 13, 2016 — Walter Reed National Military Medical Center officials today announced a pilot program to pioneer kidney paired donation chains started via the military share program, in which families of active duty military service members donate one of their kidneys to patients listed for transplant at the medical center’s campus here.
...
""We are excited to participate in this initiative, which has the potential to increase organ allocation for our patients,” Navy Capt. (Dr.) Eric Elster, professor and chairman of surgery at the Uniformed Services University of Health Sciences and Walter Reed National Military Medical Center said. “While it will require overcoming logistical barriers, we in military medicine excel at such challenges."
Walter Reed surgeons perform an average of 25 transplants per year on patients from across the country, and the medical center also maintains a living donor kidney transplant program that participates in national paired kidney exchanges.
Army Maj. (Dr.) Jason Hawksworth, transplant chief at Walter Reed, said his team “looks forward to contributing to the innovative initiative that may exponentially increase the availability of life-saving transplants on patients throughout the nation."
According to the Scientific Registry of Transplant Recipients, a regulatory body that tracks transplants, Walter Reed has the best organ transplant outcomes in the greater Washington-Baltimore region."
I'm catching an early flight from Boston to DC this morning. I expect there may be more to report later...
White House summit on increasing organ donation
"The White House will host an Organ Summit. At the summit, the administration and private entities will announce a new set of actions that will build on the administration’s previous accomplishments to improve outcomes for individuals waiting for organ transplants and improve support for living donors. This event will be webcast live at www.whitehouse.gov/live. The event will take place Monday, June 13, from 10:30 am-12:30 pm EDT."
"The idea for a body transplant is the kind of thinking that has experts around the world alarmed at how far China is pushing the ethical and practical limits of science. Such a transplant is impossible, at least for now, according to leading doctors and experts, including some in China, who point to the difficulty of connecting nerves in the spinal cord. Failure would mean the death of the patient.
The orthopedic surgeon proposing the operation, Dr. Ren Xiaoping of Harbin Medical University, who assisted in the first hand transplant in the United States in 1999, said he would not be deterred. In an interview, Dr. Ren said that he was building a team, that research was underway and that the operation would take place “when we are ready.”
His plan: Remove two heads from two bodies, connect the blood vessels of the body of the deceased donor and the recipient head, insert a metal plate to stabilize the new neck, bathe the spinal cord nerve endings in a gluelike substance to aid regrowth and finally sew up the skin.
Whether or not he performs the operation, leading medical experts have condemned the plan.
“For most people, it’s at best premature and at worst reckless,” said Dr. James L. Bernat, a professor of neurology and medicine at the Geisel School of Medicine of Dartmouth College.
Dr. Huang Jiefu, a former deputy minister of health in China, said in an interview in November that when the spine is cut, the neurons “cannot be reconnected, so it’s scientifically impossible.”
“Ethically it’s impossible,” Dr. Huang added. “How can you put one person’s head on another’s body?”
He talked to lots of people exploring different approaches, including incentives and outreach, and kidney exchange chains (and his article is full of interesting links, if you're interested...)
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