Management Science’s 65th Anniversary Conference, May 20-21, Boston University

Management Science’s 65th Anniversary Conference
May 20 – 21, 2019
Boston University Questrom School of Business

"2019 marks the publication of the 65th volume of Management Science. To celebrate this anniversary, the editorial board is organizing a conference at Questrom School of Business, Boston University, from May 20th to May 21st, 2019. The focus of the conference is “Innovations in the Science and Practice of Management,” with an emphasis on integrating theory and practice. "

Here's the conference program.  It appears it will be a single stream, without parallel sessions.

It includes some talks explicitly labelled as market design, including, on Monday,
10:30 – 11:15 am Market Design, Behavioral and Experimental Economics and Management
Prof. Yan Chen, University of Michigan
Prof. Peter Cramton, University of Maryland
Prof. Axel Ockenfels, University of Cologne

And my talk on Tuesday,
Operational aspects of market design: the case of kidney exchange
By Itai Ashlagi and Al Roth

Gail Cornwall responds to the recent NY Times story on SF schools

Gail Cornwall, who follows San Francisco schools, replies to a recent article in the NY Times:

A cautionary tale about linking school choice and segregation

"Late last month, New York Times’ national education reporter Dana Goldstein wrote about public school choice and segregated schools in San Francisco. Headlined San Francisco Had an Ambitious Plan to Tackle School Segregation. It Made It Worse, the story hits several nails squarely on the head.

...

"But there are several important weaknesses in Goldstein’s article that could mislead parents, readers, and policymakers.

"The piece lays blame for segregation at the feet of San Francisco’s citywide public school choice system. It oversimplifies the views and priorities of lower-income non-white families. And, though Goldstein told me it wasn’t meant to, the article seems to endorse a controversial return to a restriction of choice in favor of a form of neighborhood attendance zones."

**********
Here's my earlier post on the NY Times article:

Tuesday, May 7, 2019

School choice in San Francisco--update in the NYT

I've blogged about other articles by Ms. Cornwall.

Yale SOM celebrates Vahideh Manshadi on the benefits of scale in kidney exchange

In Yale Insights (from Yale SOM):

Kidney Exchange Registries Should Collaborate to Save More Lives
VAHIDEH MANSHADI

"The results were surprising, says Manshadi. “We didn’t find any evidence that higher-frequency match runs were reducing the overall number of transplants by depleting the pool of potential donors. The total number of transplants remained stable.”

"What the researchers did find, however, was an unexpectedly high number of patients in both programs whose antibodies made them hard to match—what are called sensitized patients.

“The majority of patients in these programs are sensitized,” Manshadi says. “These patients have such high levels of antibodies in their blood that they are more likely to reject a donor organ. Frequent or infrequent matching will have little effect on them because it’s so much harder to find a donor whose kidney they can accept.”

"The best way of improving the outlook for these patients, says Manshadi, is to ensure they are prioritized when searching for matches. That, and find new ways of increasing—and diversifying—the number and range of donors coming into exchange programs. "
*********

And here's the original paper:

Effect of match‐run frequencies on the number of transplants and waiting times in kidney exchange
Itai Ashlagi  Adam Bingaman  Maximilien Burq  Vahideh Manshadi  David Gamarnik  Cathi Murphey  Alvin E. Roth  Marc L. Melcher  Michael A. Rees, American Journal of Transplantation, Volume18, Issue5, May 2018, Pages 1177-1186
First published: 31 October 2017 https://doi.org/10.1111/ajt.14566

Abstract
Numerous kidney exchange (kidney paired donation [KPD]) registries in the United States have gradually shifted to high‐frequency match‐runs, raising the question of whether this harms the number of transplants. We conducted simulations using clinical data from 2 KPD registries—the Alliance for Paired Donation, which runs multihospital exchanges, and Methodist San Antonio, which runs single‐center exchanges—to study how the frequency of match‐runs impacts the number of transplants and the average waiting times. We simulate the options facing each of the 2 registries by repeated resampling from their historical pools of patient‐donor pairs and nondirected donors, with arrival and departure rates corresponding to the historical data. We find that longer intervals between match‐runs do not increase the total number of transplants, and that prioritizing highly sensitized patients is more effective than waiting longer between match‐runs for transplanting highly sensitized patients. While we do not find that frequent match‐runs result in fewer transplanted pairs, we do find that increasing arrival rates of new pairs improves both the fraction of transplanted pairs and waiting times.

Repugnant phrasing

Japan's labor and immigration policies have been more restrictive than welcoming to an immigrant/migrant labor force.  So one can imagine a cheerful headline saying that was about to change, something along the lines of the final paragraph quoted below.  I don't think the following WSJ headline quite does the trick:

Japan Aims to Hire Foreigners for Nuclear Cleanup
The country’s largest utility is working to decommission the Fukushima plant amid radiation risks at the site of the 2011 disaster

"TOKYO—Japan’s largest utility is looking to foreign blue-collar workers to help decommission its Fukushima Daiichi nuclear-power plant amid a labor shortage exacerbated by radiation risks at the site of the 2011 nuclear disaster.

"Tokyo Electric Power Co. , or Tepco, said Thursday it has informed dozens of contractors that foreigners could qualify for a new type of visa that allows manual workers to stay in the country for five years. Workers who enter areas with elevated radiation would need sufficient Japanese-language skills to comprehend radiation levels and safety instructions, a Tepco spokeswoman said.

"The move is a shift in strategy for Tepco, which hasn’t employed large numbers of blue-collar foreigners at the Fukushima plant. As of February, there were 29 foreign workers, the spokeswoman said.

"Under a new law that went into effect this month, Japan plans to open its doors to about 340,000 workers over the next five years to help fill job vacancies in chronically understaffed industries such as construction and nursing care. The new law also creates another type of visa for higher-skilled blue-collar workers who can stay indefinitely."

Market design workshop, NBER October 18-19, 2019 in Cambridge.

Here's the call for papers

To:     NBER Market Design Working Group
From:   Michael Ostrovsky and Parag Pathak

The National Bureau of Economic Research workshop on Market Design is
a forum to discuss new academic research related to the design of
market institutions, broadly defined.
The next meeting will be held in Cambridge, MA on October 18 & 19, 2019.

We welcome new and interesting research, and are happy to see papers
from a variety of fields. Participants in the past meeting covered a
range of topics and methodological approaches.
Last year's program can be viewed at: http://papers.nber.org/sched/MDf18.

The conference does not publish proceedings or issue NBER working
papers - most of the presented papers are presumed to be published
later in journals.

There is no requirement to be an NBER-affiliated researcher to
participate. Younger researchers are especially encouraged to submit papers.

If you are interested in presenting a paper this year, please upload
a PDF version by August 1, 2019 to this link:
http://papers.nber.org/confsubmit/backend/cfp?id=MDf19.

Preference will be given to papers for which at least a preliminary
draft is ready by the time of submission. Only authors of accepted
papers will be contacted.

For presenters in North America, the NBER will cover the travel and
hotel costs. For speakers from outside North America, while the NBER
will not be able to cover the airfare, it can provide
support for hotel accommodation.

There are a limited number of spaces available for graduate students
to attend the conference, though we cannot cover their costs. Please
email ppathak@mit.edu a short nominating paragraph.

Please forward this announcement to any potentially interested
scholars. We look forward to hearing from you.

Finding out what employers value in a candidate, without deception, by Kessler, Low and Sullivan

Many experiments designed to detect how employers evaluate applications employ deception: artificial applications are sent to employers in response to advertisements of job openings, and the responses are recorded. This involves deception (to get employers to devote resources to fake applications).  Here's a design that seeks the same information without deception.

Incentivized Resume Rating: Eliciting Employer Preferences without Deception

Judd B. Kessler, Corinne Low, Colin Sullivan

NBER Working Paper No. 25800
Issued in May 2019 

"We introduce a new experimental paradigm to evaluate employer preferences, called Incentivized Resume Rating (IRR). Employers evaluate resumes they know to be hypothetical in order to be matched with real job seekers, preserving incentives while avoiding the deception necessary in audit studies. We deploy IRR with employers recruiting college seniors from a prestigious school, randomizing human capital characteristics and demographics of hypothetical candidates. We measure both employer preferences for candidates and employer beliefs about the likelihood candidates will accept job offers, avoiding a typical confound in audit studies. We discuss the costs, benefits, and future applications of this new methodology."

Randomization in Economics: a history, by Julian Jamison

Randomized experiments have a long history:

The Entry of Randomized Assignment into the Social Sciences

By:Julian C. Jamison

JOURNAL OF CAUSAL INFERENCE

Volume: 7,  

Issue: 1 MAR 2019

Abstract

Although the concept of randomized assignment in order to control for extraneous confounding factors reaches back hundreds of years, the first empirical use appears to have been in an 1835 trial of homeopathic medicine. Throughout the 19th century there was a growing awareness of the need for comparison groups, albeit often without the realization that randomization could be a clean method to achieve that goal. In the second and more crucial phase of this history, four separate but related disciplines introduced randomized control trials within a few years of one another in the 1920s: agricultural science; clinical medicine; educational psychology; and social policy (specifically political science). This brought increasing rigor to fields that were focusing more on causal relationships. In a third phase, the 1950s through 1970s saw a surge of interest in more applied randomized experiments in economics and elsewhere - both in the lab and especially in the field.

PBS on Uber's economists

Paul Solman interviews Uber economists (John Hall and others) and other economists (Susan Athey and Paul Oyer) on what economists do at Uber:

UNOS proposal for public comment: Eliminate the use of DSAs and regions from kidney and pancreas distribution

Public comment solicitation is a lengthy process--and this proposal has solicited many lengthy comments (for which you'll have to scroll down at the link...)

Proposal Overview

Status: Public Comment

Sponsoring Committee: Kidney Transplantation Committee & Pancreas Transplantation Committee

Strategic Goal 2: Provide equity in access to transplants

Read the concept paper (PDF; 1/2019)

Contacts: Scott Castro and Abigail Fox

View dashboard of proposed kidney distribution circles

Data request from the OPTN Kidney Transplantation CommitteeProvide simulation data on effect of removing DSA and region from kidney/pancreas/kidney-pancreas organ allocation policy

• View kidney pancreas analysis (PDF; 12/2018)
• Access kidney pancreas results (XLSX; 12/2018)

Executive summary

The Final Rule (hereafter “Final Rule”) sets requirements for allocation polices developed by the Organ Procurement and Transplantation Network (OPTN) and the United Network for Organ Sharing (UNOS), including the use of sound medical judgement, achieving the best use of organs, preserving the ability for centers to decide whether to accept an organ offer, avoiding wasting organs, avoiding futile transplants, promoting patient access to transplantation and promoting efficiency. The Final Rule also includes a requirement that policies “shall not be based on the candidate’s place of residence or place of registration, except to the extent required” by the other requirements of the Final Rule.

In the past year, the United States Secretary of Health and Human Services (HHS) received critical comments regarding the OPTN/UNOS’s compliance with the National Organ Transplant Act (NOTA) and the Final Rule with respect to the geographic units used in lung and liver distribution. The OPTN/UNOS made rapid changes to eliminate using donation service area (DSA) and OPTN/UNOS regions (regions) in lung and liver distribution, respectively. Furthermore, the OPTN/UNOS Executive Committee directed the organ-specific committees to analyze their distribution systems and replace DSAs and regions with more rational units of distribution.

Policy 8: Allocation of Kidney and Policy 11: Allocation of Pancreas, Kidney-Pancreas, and Islets currently use DSA and region as geographic units of distribution. These are poor proxies for geographic distance between donors and transplant candidates because the disparate sizes, shapes, and populations of DSAs and regions result in an inconsistent application for all candidates. As noted in Department of Health and Human Services Administrator Sigounas’s letter to the OPTN/UNOS President, “DSAs and Regions have not and cannot be justified” under the regulatory requirements of the Final Rule.

Members of the OPTN/UNOS Kidney Transplantation Committee, joined by members from the OPTN/UNOS Pancreas Transplantation Committee and the OPTN/UNOS Pediatric Transplantation Committee, created the Kidney/Pancreas Workgroup (hereafter “the Workgroup”) in order to remove DSA and region from kidney and pancreas allocation policies. The Workgroup reviewed OPTN/UNOS data on current distribution practices, engaged Workgroup members on their collective clinical experience, and utilized the OPTN/UNOS Board of Directors’ “Geographic Organ Distribution Principles and Models” to develop five potential allocation options that would eliminate DSA and region from kidney and pancreas allocation policies.

The five variations that the Workgroup chose to model are:

1. A fixed concentric circle framework with a 150 nautical mile (NM) small circle and a 300 NM large circle
2. A fixed concentric circle framework with a 250 NM small circle and a 500 NM large circle
3. A fixed concentric circle framework with a single 500 NM circle
4. A hybrid framework with a single 500 NM circle that utilizes a small number of proximity points inside and outside of the circle, and
5. A hybrid framework with a single 500 NM circle that utilizes a large number of proximity points inside and outside of the circle.

These variations will be more comprehensively outlined in this paper’s “What Concepts Are Being Considered?” section. The Workgroup is not limiting itself to consideration of solely these five variations, but rather used these variations as choices to model in the Kidney/Pancreas Simulated Allocation Model (KPSAM) in order to most strategically determine what could be the ideal variation. The Workgroup understands that, given community feedback and additional evidence gathered, it is possible that the framework and variation ultimately selected by the Workgroup may be a combination of these variations, or perhaps a new variation, such as a single-circle hybrid with a smaller concentric circle.

The Workgroup is currently considering these five variations for modifying kidney and pancreas allocation policy to be more consistent with the Final Rule and to provide more equity in access to transplantation regardless of a candidate’s place of residence or registration, except to the extent required by §121.8 (a)(1)-(5) of the Final Rule. The Workgroup requests community feedback in order to better inform the evidence-gathering and decision-making processes.

Feedback requested

How are American transplant centers regulated? How does this influence treatment decisions?

Here's a NYT oped about the fact that transplant centers are regulated based on their one-year graft survival statistics--i.e. on how often the transplant (and the patient) lasts 12 months:

When Is a Transplant Worth It?
A year in a hospital bed is a “success” while dying after 11 months is failure.
By Daniela J. Lamas
Dr. Lamas is a pulmonary and critical care physician.

"The single-minded focus on staying alive for a year begins at the time of a transplant program’s initial certification by the Centers for Medicare and Medicaid Services. If the program’s one-year mortality rate is higher than expected, possibly because surgeons are giving transplants to people who are too sick, that program could be put on probation or lose its certification. That metric is equally important to the United Network for Organ Sharing, which allocates donor organs. A patient looking for information might happen upon the Yelp-style transplant center rankings developed by the Scientific Registry of Transplant Recipients — also based on one-year mortality, particularly for lung transplant programs.
...
"The focus on one-year mortality isn’t necessarily what patients want, and it can have unintended consequences. Dr. Richard Formica, a kidney transplant specialist at Yale-New Haven Hospital, noted that with mortality as the metric of success, surgeons might be apt to discard riskier transplant organs because they worry about their numbers. The concern about program numbers — and the potential repercussions for other patients if a center loses its certification — also might influence the choice of who gets a transplant in the first place. “Do we deny patients who have an increased risk of mortality in the first year?” Dr. Formica asked. “Yes, we do.”

Indian Society of Organ Transplantation meeting in Ahmedabad May 11-12

I'll be in Ahmedabad this weekend, starting with a conference of the Indian Society of Transplantation:

http://isot.co.in/file/ISOT_Mid_term_meeting_11-12_May_Ahmedbaabd.pdf

Here's a draft of the program.

My two talks will be on
History and organization of kidney exchange, and
Taboo transactions and frontiers in ethical kidney exchange

Shrouded prices for blood tests in the U.S.

One of the features of the American health care system is that prices are heavily shrouded--insurance companies reach negotiated prices with providers, that may be very different with different providers, and very different from list prices, and are not quoted. So prices aren't nearly as informative in health care as in most other markets.

Here's a NYT story that focuses on blood tests:

They Want It to Be Secret: How a Common Blood Test Can Cost $11 or Almost $1,000
Huge price discrepancies like that are unimaginable in other industries. Also unusual: not knowing the fee ahead of time.

David Kreps on Behavioral Economics (Nemmers Prize Lecture)

David Kreps won the 2018 NEMMERS PRIZE IN ECONOMICS , and
today, at Northwestern, he is giving his

NEMMERS PRIZE LECTURE

EVENT DETAILS

Wednesday, May 8, 2019
4:30 - 6:00 pm
McCormick Auditorium, James L. Allen Center
Free and open to the public

"SOME DIMENSIONS OF BEHAVIOR WITH WHICH ECONOMICS SHOULD CONTEND"

Behavioral economics is generally taken to mean economics in which the behavior of individual agents does not conform to the “standard model” of rational behavior.  However, under this banner, one finds a very large number of specific “nonstandard” models of behavior.  This very large number prompts a standard criticism of behavioral economics:  If any behavior is permissible, any conclusion can be reached.  

Using a small handful of examples, the lecture illustrates and fleshes out a test for the value of work in behavioral economics.  This test is based on three principles:

1.  Is the behavior in the model systematic, at least in some important contexts?
2. Does positing this behavior lead to economically significant phenomena?
3. Either via intuition or, preferably, empirical evidence, does the behavior provide "better" explanations of those significant phenomena, where defining the adjective “better” is the crux of the matter.

School choice in San Francisco--update in the NYT

Here's the NY Times story: San Francisco Had an Ambitious Plan to Tackle School Segregation. It Made It Worse.

“Our current system is broken,” said Stevon Cook, president of the district Board of Education, which, late last year, passed a resolution to overhaul the process. “We’ve inadvertently made the schools more segregated.”
...
"About a quarter of the city’s children are enrolled in private school, a higher percentage than in some other major cities, like New York, where it is around 20 percent. The lottery system is thought to be a major reason wealthy parents here opt out of public schools, further worsening segregation."
**********

The San Francisco Unified School District interacted with market designers some years ago, but ultimately turned down their (our) help and decided to deal with the existing problems in-house.  Here are some old blog posts...

Thursday, September 23, 2010

San Francisco school choice goes in-house

And

Thursday, June 2, 2011

Followup on school choice in San Francisco

A (first) liver-kidney exchange

Here's a forthcoming paper in the American Journal of Transplantation:

Bi‐organ Paired Exchange – Sentinel Case of a Liver‐Kidney Swap
by Ana‐Marie Torres  Finesse Wong  Janine Sabatte‐Caspillo  Sandy Del Grosso John P Roberts  Nancy L Ascher  Chris E Freise  Brian K Lee
First published: 12 April 2019
https://doi.org/10.1111/ajt.15386

Abstract: "Organ transplantation is the optimal treatment for patients with ESLD and ESRD. However, due to the imbalance in the demand and supply of deceased organs, most transplant centers worldwide have consciously pursued a strategy for living donation. Paired exchanges were introduced as a means to bypass various biologic incompatibilities (blood‐ and tissue‐typing), while expanding the living donor pool. This shift in paradigm has introduced new ethical concerns that have hitherto been unaddressed, especially with non‐directed, altruistic living donors. So far, transplant communities have focused efforts on separate liver‐ and kidney‐paired exchanges, whereas the concept of a trans‐organ paired exchange has been theorized and could potentially facilitate a greater number of transplants. We describe the performance of the first successful liver‐kidney swap."
******
The discussion of the ethical concerns mentioned in the abstract strike me as worth looking at, given that one of the authors, when she was president of the Transplantion Society, argued strenuously that poor patients should not be allowed to participate in American kidney exchange, for ethical reasons.

First, here are the practical steps they took:
"Our team debated the ethical underpinning of this swap. A discussion with the chair of the ethics committee at the time concluded that a full committee review was unnecessary."

Second, they considered the differential risks to the kidney and liver donors, and decided that this did not disallow the donations, since both kidney and liver donation is already accepted.

Finally they discuss the differential benefits to the liver and kidney recipients:
"Another area of contention is that donor-L’s recipient received remarkably less from a “life-enhancing” kidney transplant (rather than a truly “life-saving” liver transplant), despite the fact donor-L took on the substantially greater risk of donor hepatectomy. Our counterpoint is that the kidney recipient was spared from an extended dependency on dialysishad she stayed on the deceased donor waitlist (mortality on the kidney wait-list is 6-8% annually with a significant reduction in quality of life15,16). This does not even account for the superior allograft and patient survival outcomes that comes with a living vs. a deceased donor kidney transplant17. In fact, Merion18made the observation that the risk to patients on the kidney waitlist is not dissimilar to the liver waitlist mortality and reduction in quality of life for those with moderate MELD scores of 12-17. "

Fortunately for the patients involved, they decided that the benefits to the liver and kidney recipients were comparable. The implication is that if they had decided that the 'life-saving' benefits of a liver exceeded the 'life-enhancing' benefits of the kidney, then the exchange would have been unethical, and the ethical course of action would have been not to go ahead with it--which would likely have resulted in a quick death sentence for the liver patient, and perhaps a slower one for the kidney patient.

I'm glad that the dire decree was diverted.

It is this kind of ethical reasoning that led one of the authors to conclude that it would be unethical to go ahead with global kidney exchanges involving patient-donor pairs whose care had to be financed outside of their own countries' insurance coverage, so that, ethically, they could not be offered treatment even when financing was available. (It's lucky that the patients in this liver-kidney exchange apparently had good insurance, too.)
**********
The paper has an interesting back story in some speculative thoughts on market design.

The second reference in the paper is to a paper by computer scientists John Dickerson at Maryland and Tuomos Sandholm at CMU, proposing that multi-organ exchanges might substantially increase transplantation:
 Dickerson J, Sandholm T. Liver and multi-organ exchange. Journal of Artificial Intelligence Research. 2017;60:639

An unusual twist to the story is that it is the liver donor, eager to help her mother get a kidney transplant, who read the Dickerson-Sandholm paper and proposed the idea to the docs at UCSF.


Here's a press release from CMU, celebrating the event, and Sandholm's contributions:
Computer Science Idea Triggers First Kidney-Liver Transplant Swap
Sandholm says multi-organ exchanges could boost number of transplants

***********

Update: here's a May 11 story in the Washington Post

A daughter's gift to her mother saves two lives

Do child labor laws apply to social media?

The Guardian asks the question:
'It's not play if you're making money': how Instagram and YouTube disrupted child labor laws

"while today’s child stars can achieve incredible fame and fortune without ever setting foot in a Hollywood studio, they may be missing out on one of the less glitzy features of working in the southern California-based entertainment industry: the strongest child labor laws for performers in the country.

"Those laws, which were designed to protect child stars from exploitation by both their parents and their employers, are not being regularly applied to today’s pint-sized celebrities, despite the fact that the major platforms, YouTube and Instagram, are based in California. The situation is a bit like “Uber but for … child labor”, with a disruptive technology upending markets by, among other things, side-stepping regulation."

Global kidney health atlas from the International Society of Nephrology

Here's the 2019 Global Health Atlas

Kidney transplantation is nowhere readily available to everyone who needs it,  but the wealthy countries of the West provide it most widely:

Annual costs of dialysis are roughly the same as costs of transplantation in the year the transplant is performed (and of course dialysis costs stay roughly constant until the patient dies or is transplanted, while the costs of a successful transplant become largely the costs of immunosuppressive drugs).

Donating eggs for fertility: an update

Slate brings us up to date:

INSIDE THE QUIETLY LUCRATIVE BUSINESS OF DONATING HUMAN EGGS

"The first US child conceived from a donated egg was born in 1984. Since then, the procedure has grown into a thriving industry. Demand from aspiring parents, along with a dearth of regulations, have spawned matchmaking agencies that offer to help parents find the perfect young woman whose eggs will result in the equally perfect child.

"Donating eggs can be lucrative, with agencies paying as much as $50,000 per cycle in some cases.
...
"Ads or marketing materials targeting potential donors rarely mention the risks or common complaints. Liz Scheier donated eggs three times between 2005 and 2007, and says she was told there were no known risks associated with egg donation. Today, Scheier is a media liaison for We Are Egg Donors, a women’s health organization that works with more than 1,500 donors to promote transparency and advocate for their concerns. She says that donors nowadays hear the same line she did, delivered almost verbatim. But it’s missing one key detail. “There are no known risks because no one has looked,” she adds.
...
"Egg donation has thrived in the US in part because there are few laws regarding the transfer of unfertilized eggs for reproductive purposes, according to industry experts. They say a handful of states have policies that touch on some aspect of egg donation, generally from the perspective of the recipient.

With few regulations, the US has become a magnet for well-off wannabe parents in other countries where egg donation is regulated, or outright illegal. Egg donation is barred in China, Germany, Italy, and Norway; paying women to donate eggs is prohibited in most of Europe, as well as in Canada and other nations.
...
"In 2011, an egg donor sued ASRM [American Society for Reproductive Medicine] over the organization’s compensation guidelines, which the donor claimed were a form of illegal price-fixing; other donors later joined the case. In a 2016 settlement, ASRM agreed to eliminate its payment suggestions, pay $1.5 million in legal fees, and give the plaintiffs $5,000 each. Agencies were freer to offer donors more money.
...
"Since then, donor pay has soared, particularly for attractive, well-educated donors."


HT: Stephanie Lo

Legal marijuana in California struggling to compete with the well established black market

Yesterday I posted about the competition the legal market for marijuana in Canada is facing from the pre-existing illegal market. Today we turn to California. It's still to early to draw conclusions, but one market design lesson is that even if the attraction of a legal market is regulation and tax revenue, regulators and tax authorities may have to ease up at least in the beginning if they want the legal market to out-compete the legacy black market.

In the NY Times, Thomas Fuller has been following the market(s):

‘Getting Worse, Not Better’: Illegal Pot Market Booming in California Despite Legalization  By Thomas Fuller

"It’s been a little more than a year since California legalized marijuana — the largest such experiment in the United States — but law enforcement officials say the unlicensed, illegal market is still thriving and in some areas has even expanded.
...
"The struggles of the licensed pot market in California are distinct from the experience of other states that have legalized cannabis in recent years. Sales in Colorado, Oregon and Washington grew well above 50 percent for each of the first three years of legalization, although Oregon now also has a large glut of pot.

"But no other state has an illegal market on the scale of California’s, and those illicit sales are cannibalizing the revenue of licensed businesses and in some cases, experts say, forcing them out of business.
...
"California gives cities wide latitude to regulate cannabis, resulting in a confusing patchwork of regulation. Los Angeles, San Francisco, San Jose and San Diego have laws allowing cannabis businesses, but most smaller cities and towns in the state do not — 80 percent of California’s nearly 500 municipalities do not allow retail marijuana businesses. The ballot measure legalizing recreational marijuana passed in 2016 with 57 percent approval, but that relatively broad support has not translated to the local level. Cities like Compton or Laguna Beach decisively rejected allowing pot shops.

"Regulators cite this tepid embrace by California municipalities as one of many reasons for the state’s persistent and pervasive illegal market. Only 620 cannabis shops have been licensed in California so far. Colorado, with a population one-sixth the size of California, has 562 licensed recreational marijuana stores.
...
"And the monetary incentives of trafficking also remain powerful: The price of cannabis products in places like Illinois, New York or Connecticut are typically many times higher than in California."

Competition between legal and illegal cannabis in Canada

Canadian cannabis competition:

Canada's legal weed struggles to light up as smokers stick to black market
Six months after legalisation, licensed producers are unable to keep up with the demand or quality of neighborhood dealers

"Six months after Canada became the first G7 country to legalise marijuana, the bold experiment is still struggling to get off the ground.

"Legal producers were unable to meet the sudden surge in demand, and struggled for weeks to fill orders, leaving marijuana stores with empty shelves.

"As a result, the vast majority of cannabis sales in the country – roughly $5bn – are made on the illegal markets, compared to $2bn in legal sales, according to government figures from January 2019.
...
"The Tobins are also competing against illegal “grey market” stores, which alongside marijuana sell edibles and hashish – items that licensed stores cannot yet offer.
...
"Canadians who purchase their cannabis from illegal sources also save a significant amount of money: the average price for a gram of illegal cannabis is 36% cheaper than its legal counterpart, Statistics Canada has found."
********

Here's a price survey and other stats from Statistics Canada: Cannabis Stats Hub