Roger Doooley interviews me about Who Gets What and Why

Ep #68: Disrupting Markets with Nobel Winner Al Roth

07-23-2015 | 0 COMMENTS | ROGER DOOLEY

My guest today on The Brainfluence Podcast is quite a unique scholar. Al Roth is the Craig and Susan McCaw Professor of Economics at Stanford University, as well as the Gund Professor of Economics and Business Administration Emeritus at Harvard University. He is the author ofWho Gets What And Why: The New Economics of Matchmaking and Market Design. He also happens to have been awarded the Nobel Prize for Economics in 2012.

While winning a Nobel Prize makes Al unique, what sets him apart is his application of his knowledge of economics in solving seemingly intractable real-world problems. His insights have resulted in market creation in areas like city-wide school admissions, hospital internship negotiations, and kidney transplants that save thousands of lives each year.

Today, we’re going to hear how an economics professor turned into a lifesaver and how you can apply some of Al’s insights to your business ventures. The principles that Al has brought to the medical field, and that have been used in some of the great entrepreneurial successes in recent history, are readily accessible to you. These same principles can be used to understand and identify novel business opportunities, reshape the way you view your business and help you experience incredible success.

If you enjoy the show, please drop by iTunes and leave a review while you are still feeling the love! Reviews help others discover this podcast, and I greatly appreciate them!

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Ben Hippen on the economics of transplantation and dialysis

Dr Hippen replies to an earlier article suggesting that incremental changes in current transplant practice could remove the need to radically increase the supply of kidneys, e.g. through financial incentives...

Debating Organ Procurement Policy Without Illusions

Benjamin Hippen, MD American Journal of Kidney Diseases

"For poor patients, the primary payor for dialysis is Medicare, Medicaid, or some hybrid, unless they are ineligible for these programs. The profit margins of dialysis facilities with an average payor mix of Medicare, Medicaid, and commercial insurance is 3% to 4%.12 Crucially, a facility composed entirely of patients with Medicare and/or Medicaid as the primary payor is financially unsustainable because payments to facilities on a per-treatment basis are, depending on local labor and other overhead costs to the facility, frequently less than the cost to the facility to provide the treatment. Although a dialysis facility requires a minimum number of patients to cover labor and operational overhead costs, the total net margin of a typical facility is achieved through cross-subsidization from collections from commercially insured patients."
...

"A staple of opponents of financial incentives is that incentive proposals would not even bear consideration if transplantation professionals would just stop wasting perfectly good kidneys. Citing a 19% rate of organ discard in the United States, the authors argue that if only we biopsied more kidneys before turndown, made more use of organs with a Kidney Donor Profile Index > 85% (previously known as expanded criteria donors), and increased use rates of organ donation after circulatory death just like many European centers, we would be a long way toward solving the problem.

These arguments betray a lack of understanding of the extant regulatory burdens and financial constraints on US transplantation centers. In the United States, the expected risk-adjusted rate of death-uncensored transplant survival for a deceased donor kidney at 1 year is 96% (14; Fig 6.2), and 1-year expected patient survival is 98% to 99%. These outcomes represent the expectations of transplantation centers by CMS regulators, and failure to achieve these outcomes invites intense regulatory scrutiny under threat of involuntary closure.15 In the last several years, nearly 100 transplantation programs in the United States have gone through expensive stressful “mitigating factors” applications with CMS to avoid involuntary closure because of reported outcomes that were below risk-adjusted expected outcomes, although the data and veracity of the methodology used to calculate risk adjustment has been heavily criticized.16 With some frequency, scrutinized centers are required to enter into a Systems Improvement Agreement, essentially a contract with CMS to put oversight of the transplantation program into a multiyear third-party receivership, at extravagant expense to the transplantation center, until reported outcomes improve.

Regulatory scrutiny of programs that fall below expected outcomes is typically accompanied by denial of Center of Excellence status by CMS. Loss of this designation often causes commercial insurers to cancel insurance contracts and direct referrals to other programs. This is a profound incentive to embrace risk aversion.16 and 17 Refashioning insurance agreements and changing ingrained referral patterns is a slow process and can pose significant medium-term challenges to the financial stability of a transplantation program long after the quality issues have been resolved to a regulator’s satisfaction."

Nash equilibrium: something on which economists agree

The IGM Forum asks a panel of economists whether they agree or disagree with a given statement. The following statement drew a lot of agreement:

Nash Equilibrium

"Behavior in many complex and seemingly intractable strategic settings can be understood more clearly by working out what each party in the game will choose to do if they realize that the other parties will be solving the same problem. This insight has helped us understand behavior as diverse as military conflicts, price setting by competing firms and penalty kicking in soccer."

Kidney exchange in Turkey, and the state of Turkish transplantation

Here are two articles from the June issue of Transplantation Proceedings

First International Paired Exchange Kidney Transplantations of Turkey    

M. Tuncer

, S. Tekin

, Y. Yuksel

, L. Yücetin

, L. Dosemeci

, A. Sengul

 and A. Demirbaş

Transplantation Proceedings, 2015-06-01, Volume 47, Issue 5, Pages 1294-1295, Copyright © 2015 Elsevier Inc.

Abstract

Objective

We estimated that many patients on the waiting list for kidney transplantation in Turkey have immunologicaly incompatible suitable living donors. Paired exchange kidney transplantation (PETx) is superior to desensitization for patients with incompatible donors. Recently we decided to begin an international PETx program.

Methods

We report three international living related paired kidney transplantations which occurred between May 14,2013, and March 7, 2014. The international donor and recipient operations were performed at Medical Park Hospital, Antalya, Turkey. All pairs were living related and written proofs were obtained according to Turkish laws. As with the donor procedures, the transplantation procedures were performed at the same time.

Results

The uniqueness of these transplantations was that they are the first international exchange kidney transplantations between Turkey and Kirghizia. Currently all recipients are alive with wel-functioning grafts.

Conclusion

In our institute, a 5% increase was obtained in living-related kidney transplantations by the help of PETx on a national basis. We believe that international PETx may also have the potential to expand the donor pool.

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

State of Turkish Transplantation    

• Sukru H. Emre Prof.
•  and Ulug Eldegez Prof.

Transplantation Proceedings, 2015-06-01, Volume 47, Issue 5, Pages 1243-1243, Copyright © 2015 Elsevier Inc.

The 10th Congress of the Turkish Transplantation Centers Coordination Association (TTCCA) was held on October 15–18, 2014 in the ancient city of Bodrum, Turkey (formerly Halicarnassus), where one of the Seven Wonders of the Ancient World, “Mausoleum at Halicarnassus,” resides.

This congress also marked the 20th anniversary of the TTCCA. Since its inaugural meeting, TTCCA's congresses have hosted international leaders in the fields of transplantation in transplant immunology, hepatology, nephrology, surgery, radiology, infectious disease, intensive care, nursing, and other related disciplines. Throughout the years, these congresses have served as a great training ground for young Turkish physicians, surgeons, and scientists to meet with world experts and discuss cases. These congresses have also helped Turkish physicians develop international networks so that they may visit transplant centers around the world.

Twenty years ago, TTCCA was established by two pioneers of Turkish transplant surgery: Professors Tuncer Karpuzoglu and Ulug Eldegez. These men were the ones who approached the young transplant surgeons, physicians, immunologists, and nurses to welcome them, encourage them, guide them and point them in the right direction. TTCCA has had bi-annual national meetings since its inception. These meetings have brought almost all transplantation centers in Turkey together under the TTCCA and initiated a nationwide deceased organ distribution system for kidney, liver, and heart transplantations. This effort was sponsored by a grant provided by Novartis. This was the first attempt in Turkey to institute the equal, fair sharing of organs procurred from deceased organ donors. After almost 10 years of serving in this capacity, TTCCA partnered with the Ministry of Health of Turkey (MoH) to achieve the current organ allocation system. During the development of the new organization under the auspices of the MoH, TTCCA leadership and many members have played crucial roles by serving on many committees of this national organization.

As a result of these efforts ignited by TTCCA, solid organ transplantation in Turkey has became a routine procedure with reasonably good outcomes.

Despite these achievements, there are many areas that the transplantation society and MoH can work on:

• 1. 
  Based on the 2014 statistics, approximately 80% of kidney and liver transplants were done with living donors and only 20% of organs were from deceased donors. In living donor liver transplantation, Turkey is the one of the leading countries in the world together with South Korea. These ratios are the opposite to the ratios of Europe and the US where most of donations are from deceased donors. Therefore, there is an ample opportunity to increase deceased organ donation in Turkey. This effort requires continuous education of the public on organ donation.
• 2. 
  It is imperative to establish a Turkish Transplantation Network similar to UNOS. Besides what has been achieved, this organization should be in charge of increasing the number of deceased donors, more detailed organ specific data from transplant centers, auditing, controlling the quality of transplant centers in terms of policies, processes, quality and accreditation of medical and surgical staff involved in transplant centers, education, and monitoring transplant related disease transmission.

TTCCA and MoH have been working with The Transplantation Society (TTS), World Health Organization (WHO), EuroTrans and the Declaration of Istanbul on Organ Trafficking and Transplantation Tourism leadership to honor the concept of the “gift of life,” prevent organ trafficking and increase the number of deceased donors for transplantation. I hope that these commendable efforts would be honored by TTS by allowing the 2020 World Congress to be held in Istanbul, Turkey.

It has been my pleasure to live through these amazing improvements in Turkish Transplantation along the last 20 years.

Inquiring Minds podcast on Who Gets What and Why

Here's a podcast about my new book--first quarter hour is devoted to chat between the hosts, and then an interview with me, which starts at 17:30 and goes through minute 53. The whole thing is an hour.

Doctor assisted dying: the debate, and the Dutch experience

Sangram Kadam points me to two different takes in the ongoing debate on doctor-assisted dying, and whether it should be legalized, and if so how common it should become.

The first is from the Economist:
The right to die--Doctors should be allowed to help the suffering and terminally ill to die when they choose

It begins as follows:

"IT IS easy to forget that adultery was a crime in Spain until 1978; or that in America, where gay marriage is allowed by 37 states and may soon be extended to all others by the Supreme Court, the last anti-sodomy law was struck down only in 2003. Yet, although most Western governments no longer try to dictate how consenting adults have sex, the state still stands in the way of their choices about death. An increasing number of people—and this newspaper—believe that is wrong.

"The argument is over the right to die with a doctor’s help at the time and in the manner of your own choosing. As yet only a handful of European countries, Colombia and five American states allow some form of doctor-assisted dying. But draft bills, ballot initiatives and court cases are progressing in 20 more states and several other countries (see article). In Canada the Supreme Court recently struck down a ban on helping patients to die; its ruling will take effect next year. In the coming months bills will go before parliaments in Britain and Germany.
*************

The second article is by Theo Boer, a professor of ethics at the Protestant Theological University at Groningen. He supported the right to die law in the Netherlands, but now is dismayed by the growth in the number of people choosing to end their lives.
I supported our euthanasia law, but I was terribly wrong: Dutch ethicist

It begins as follows:

"In 2001 The Netherlands was the first country in the world to legalize euthanasia and, along with it, assisted suicide. Various safeguards were put in place to show who should qualify and doctors acting in accordance with these safeguards would not be prosecuted. Because each case is unique, five regional review committees were installed to assess every case and to decide whether it complied with the law. For five years after the law became effective, such physician-induced deaths remained level - and even fell in some years. In 2007 I wrote that ‘there doesn’t need to be a slippery slope when it comes to euthanasia. A good euthanasia law, in combination with the euthanasia review procedure, provides the warrants for a stable and relatively low number of euthanasia.’ Most of my colleagues drew the same conclusion.

"But we were wrong - terribly wrong, in fact. In hindsight, the stabilization in the numbers was just a temporary pause. Beginning in 2008, the numbers of these deaths show an increase of 15% annually, year after year. The annual report of the committees for 2012 recorded 4,188 cases in 2012 (compared with 1,882 in 2002). 2013 saw a continuation of this trend and I expect the 6,000 line to be crossed this year or the next. Euthanasia is on the way to become a ‘default’ mode of dying for cancer patients."

Equilibrium effects: animals that might become extinct if no one eats them

Not eating animals doesn't always mean there will be more of them: the Livestock Conservancy works to match breeding pairs of endangered species of farm animals. NPR has the story.  These Animals Might Go Extinct Because No One Wants To Eat Them

The Steller's sea cow, the passenger pigeon and the New Zealand moa all went extinct because people developed a taste for their meat.

But other animals are going their way precisely because they are no longer preferred table fare. The Livestock Conservancy, a North Carolina organization that advocates for the preservation of rare and vanishing breeds, keeps an official list of nearly 200 domesticated birds and mammals which today are at risk of vanishing. The group is trying to generate interest in these breeds, among both consumers and farmers, to keep the animals from going extinct.

"We sometimes say, 'You need to eat them to save them — just don't eat them all,' " says Ryan Walker, the marketing and communications manager of the conservancy.

The Red Wattle, a pig with exceptionally juicy flesh, and the Randall Lineback, a cow that produces beautiful rose-red veal, are two success stories — breeds that were close to oblivion but that foodie ranchers have revived.

But others haven't been so lucky. And it may be because lately no one has wanted to eat them.

There are fewer than 200 Choctaw hogs left, for example. This pig was prized by the Native American Choctaw tribe as a meat source. But displacement of the tribe led to the breed's downfall. Today, Choctaw hogs live on just a few farms in a single county in Oklahoma. The animals are still extremely vulnerable to inbreeding and, Walker says, to natural disasters. "They could potentially get wiped out by one tornado," he says.

...

The key to saving critically endangered breeds is finding people to breed and grow the populations. Walker says his organization, without land to rear its own animals, helps rare breeds by coordinating meetings between farmers who own the animals.

Today, in spite of the efforts of numerous ranchers and organizations focused on preserving rare breeds, some are going extinct. Almost one livestock breed has vanished every month around the world for at least the past six years, according to the United Nations Food and Agriculture Organization.

The U.S. Department of Agriculture supports a program for preserving heritage livestock breeds. The idea is to keep alive unique genetic traits that could someday come in handy for breeders who are trying to create hardier, or tastier, animals. In the American West, Walker says, demand is growing for drought tolerant cattle that can withstand the unusually dry conditions that may become the new normal going into the future. While many rare breeds are kept alive on small farms, the USDA has preserved some cryogenically—mainly via samples of frozen semen."

HT: Aaron Roth

Who Gets What and Why, in England

Last Monday, I devoted a day to helping my English publisher sell my book. It has a a slightly different subtitle in England: Who Gets What - And Why: The Hidden World of Matchmaking and Market Design

Here is a broadcast of BBC's Newsnight  13/07/2015  in which I briefly talk about the book starting at minute 39:.

And here is a slightly longer discussion, as part of The Monocle Weekly, from minute 27 to 40:50.

Internships may be unpaid, court rules, if they benefit intern more than employer, and serve an educational purpose

A class action lawsuit, seeking to make many unpaid internships legally repugnant, has been sent back to a lower court.  The NY Times has the story:

Employers Have Greater Leeway on Unpaid Internships, Court Rules (this is one of those cases in which the URL is more informative than the headline:  http://www.nytimes.com/2015/07/03/business/unpaid-internships-allowed-if-they-serve-educational-purpose-court-rules.html? )

"Employers  have considerable leeway to use unpaid interns legally when the work serves an educational purpose, a federal appeals court ruled on Thursday, setting aside a lower court decision that the movie studio Fox Searchlight Pictures had improperly classified former workers as unpaid interns rather than employees.

The decision, which sends the case back to the lower court, could have broad ramifications for the way employers rely on unpaid labor. It erects large barriers to further class-action lawsuits by unpaid interns against companies where they had worked."
*********

Here's an op-ed regretting the decision: Interns, Victimized Yet Again, by Ross Perlin the author of “Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy.”

State by state variations in organ donation policy in the U.S. have little effect: JAMA Internal Medicine

The Effect of State Policies on Organ Donation and Transplantation in the United States  
Paula Chatterjee; Atheendar S. Venkataramani ; Anitha Vijayan ; Jason R. Wellen; Erika G. Martin

JAMA Intern Med. Published online June 01, 2015. doi:10.1001/jamainternmed.2015.2194


Abstract:
"Importance  Shortages in transplantable solid organs remain a critical public health challenge in the United States. During the past 2 decades, all states have implemented policies to increase organ supply, although their effectiveness is unknown.

Objective  To determine the effects on organ donation and transplantation rates of state policies to provide incentives for volunteer donation.

Design, Setting, and Participants  Using a quasi-experimental design and difference-in-differences regression analyses, we estimated the effect of policies in all 50 states and the District of Columbia on organ donors per capita and the number of transplantations from January 1, 1988, to December 31, 2010. Analyses were also stratified by type of donor (living vs deceased). Data were derived from the United Network for Organ Sharing. All data collection occurred between July 7 and September 27, 2013.

Exposures  Policies of interest were the presence of first-person consent laws, donor registries, dedicated revenue streams for donor recruitment activities, population education programs, paid leave for donation, and tax incentives. Information on states’ passage of various policies was obtained from primary legislative and legal sources.

Main Outcomes and Measures  The number of organ donors and transplantations per state, per year, during the study period.

Results  From 1988 to 2010, the number of states passing at least 1 donation-related policy increased from 7 (14%) to 50 (100%). First-person consent laws, donor registries, public education, paid leave, and tax incentives had no robust, significant association with either donation rates or number of transplants. The establishment of revenue policies, in which individuals contribute to a protected state fund for donation promotion activities, was associated with a 5.3% increase in the absolute number of transplants (95% CI, 0.57%-10.1%; P = .03). These associations were driven by a 4.9% increase in organ donations (95% CI, 0.97%-8.7%; P = .01) and an 8.0% increase in transplants (95% CI, 3.1%-12.9%; P = .001) from deceased donors as opposed to changes among living donors or transplants from living donors.


Conclusions and Relevance  Nearly all state-level policies to encourage organ donation have had no observable effect on the rate of organ donation and transplantation in the United States. The one exception was the establishment of revenue policies to promote organ donation, which may have led to small increases in organ donations and transplantations from deceased donors. New policy designs are needed to increase donation rates and curtail the widening gap between organ supply and demand."

In France, children born to surrogates become legal, even while surrogacy does not

The NY Times has the story: France: Surrogate Children Win Legal Recognition

"France’s highest court, the Court of Cassation, on Friday granted legal recognition to surrogate children, in a major turnaround that will make their daily lives easier and could lead to greater acceptance of new forms of families. The court ruled that while surrogacy would remain banned in France, children born abroad through this practice would now be legally tied to their parents and would be granted birth certificates and immediate means to prove their French citizenship. Surrogacy procedures are used by heterosexual couples unable to conceive, gay couples, and single parents. Until now, surrogate children were deprived of any legal connection to their parents, or any civil status in France. These children could not get automatic ID cards or passports, or register for state health care or other services."

The market share of living languages

Some very interesting data graphics here (compare Chinese, in all its dialects, and English...first as native languages, and then as languages being learned around the world).
Proportional Pie Chart of the World’s Most Spoken Languages

Taiwan moves to criminalize transplant tourism to China

Taiwan Shuts Down Organ Transplant Tourism, By Jenny Li, Epoch Times |

"Taiwan’s Parliament has made amendments to its organ transplantation law that would have the effect of criminalizing the transplantation of organs from executed prisoners in China, part of a global trend to halt thetrafficking of human organs in China.

In a June 12 session in Taiwan’s Legislative Yuan, a number of important amendments to the Human Organ Transplant Ordinance were read and passed as law.

Under the updated legislation, patients who travel abroad to receive an organ acquired by illegal means can be sentenced up to five years in jail and face fines from $NT300,000 (about $9,700) up to $NT15,000,000 (about $484,000).

The new amendments place some of the responsibility of regulation on doctors and hospitals. Doctors must file a report for any patient who receives a transplant overseas and carries out follow-up treatment in the country. Both doctors and hospitals are subjected to fines of up to $NT150,000 (about $4,840) if they fail to submit reports. Medical institutions and staff will incur criminal charges for filing false reports."

Critique of the "Swedish model" for sex work laws

The New Republic published an interesting critique: The Problem With the "Swedish Model" for Sex Work Laws

"Sweden’s landmark 1999 sex work legislation—presented as decriminalizing the seller of sex while criminalizing the client—is aggressively marketed as a “progressive solution” to prostitution internationally. Versions of the “Swedish model” have been implemented in Norway, Iceland, and Canada, and last week a version was adopted in Northern Ireland. The intention, we’re told, is to “reduce demand” for paid sex: shrinking, then ultimately abolishing, the sex trade.

"It’s too bad that the reality of the law is not so simple, nor so uncomplicatedly progressive.
...
"For street-based sex workers, a potential client driving past will be nervous and keen to agree to terms speedily if his role is criminalized, and to keep his business the sex worker has far less time to make crucial assessments about whether he seems safe. Research into anti-client laws around Vancouver street-based sex work found that, “without the opportunity to screen clients or safely negotiate the terms of sexual services … sex workers face increased risks of violence, abuse, and HIV.” The Norwegian government writes about its own law: “Women in the street market report [having] a weaker bargaining position and more safety concerns now than before the law was introduced.”

"While sex workers are not prosecuted simply for selling sex under the Swedish model, various laws continue to be used against them in punitive ways. “Operation Homeless,” the memorably-named Norwegian police initiative, evicted people suspected of selling sex—a law aimed at “pimps,” but used against sex workers’ landlords.

"When the Norwegian Police were pursuing “Operation Homeless,” they used surveillance to find targets for eviction—but they also evicted sex workers who came to their attention in other ways. A group of sex working Nigerian women were evicted—and left homeless—after reporting that they had been the victims of rape, a situation that illuminates the comment by the Norwegian government that “the threshold for reporting a violent customer to the police also seems to be higher after the law. People in prostitution are afraid that such actions will come back to [haunt] them at later stages.” Sex workers—including people with EU residency—are aggressively deported, and their deportation orders include commentary like: “She has not maintained herself in an honest manner.” 

The Economist as Engineer at Exeter, July 14 and 15

Tomorrow is the conference for which I traveled to England, here's the announcement:

Economic Design: The Economist as an Engineer 14-15 July 2015

Al Roth, winner of the Nobel Prize 2012 in Economics, will receive an honourable doctorate from the University of Exeter. The Department of Economics with funding from the South West Doctoral Training Centre (SWDTC) and the University of Exeter Business School is proud to host a workshop in honour of Al Roth and his contribution to market design.

How to bring different parties together in the best possible way is a key economic problem. Examples of situations where this problem arises include matching children with different schools, interns with internships, and kidneys or other organs with patients who require transplants. The two-day workshop will focus on applying economic theory to solutions for "real-world" problems.

Speakers

Name	Institution	Paper
Alvin Roth	Stanford University	"Who Gets What and Why: The New Economics of Matchmaking and Market Design" and "Kidney exchange"
Vincent Crawford	University of Oxford	Efficient Mechanisms for Level-k Bilateral Trading
Bradley Ruffle	Wilfrid Laurier University	Waiting to Cooperate? Cooperation in one-stage and two-stage games
Joana Pais	University of Lisbon	Affirmative action through minority reserves: An experimental study
Surajeet Chakravarty	University of Exeter	Communicating with an ignorant agent
Burak Can	Maastricht University	Comparing Orders, Rankings, Queues, Tournaments and Lists
Dorothea Kuebler	WZB Berlin	College Admissions with Entrance Exams: Centralized versus Decentralized
Luke Lindsay	University of Exeter	How to organise a conference: A market design approach
Dirk Engelmann	Humboldt University	Does a Buyer Benefit from Bad Reputation? Theory and Experiments on Auctions with Default
Elizabeth Baldwin	LSE	Understanding Preferences: "Demand Types", and the Existence of Equilibrium with Indivisibilities

As part of the workshop Al Roth will present a public talk, details below: 

Who Gets What and Why: The New Economics of Matchmaking and Market DesignTuesday 14^th July at 2pm – 3.30pm
Streatham Court A

Please register your attendance online – REGISTER HERE

Workshop programme

Download the programme here: Economic Design: The Economist as an Engineer - Workshop Programme

I speak at the Bristol Festival of Ideas: Monday July 13

Here's the announcement:

Alvin Roth

Who Gets What - And Why: The Hidden World of Matchmaking and Market Design

Economics/

Mon 13 July 2015
18:15-19:15 

Wills Memorial Building
Fully Booked

 In many parts of life – jobs, housing, medical care, education, even a date on the internet – price is not the only determinant of who gets what. So how do the other processes that influence who gets which goods, jobs, university places and partners really work? In Who Gets What, Nobel Prize-winning economist Alvin Roth uncovers the global rules of how markets allocate, how matchmaking shapes lives, where markets exist that we may not even realise, and how everything about our biggest experiences – from getting accepted at university or living where we want – can be better understood and negotiated when one understands the design of those matching markets. The distribution of rewards is often unfair, but it’s seldom as random as it seems. Roth reveals just how much of our life takes place in marketplaces, and leads us to a new understanding of who gets what and why. He sheds new light on the politics of free markets and how many things that we choose in life also must choose us.

This event is part of the build-up to the annual Festival of Economics – an initiative of Festival of Ideas. The Festival of Economics takes place 12-14 November and will be launched in early September.

How to Book/

Book ticketTerms and Conditions

The event is fully booked and we have started a waiting list (follow booking link to add yourself). There are always empty seats due to no-shows, so you are welcome to come and queue for those on the night. We will admit as many as we can 5 minutes before the start.

Cheating in China on (American) college admissions

Inside Higher Ed has the story: In China, No Choice But to Cheat?

July 9, 2015 By

Elizabeth Redden

"EUGENE, Ore. -- Is the admission process broken for Chinese applicants to American colleges?

Variations of that question came up again and again during sessions on Wednesday at the Overseas Association for College Admission Counseling [OACAC] conference. Persistent concerns about standardized test fraud, doctored transcripts and fake admission letters -- and the role of agents in helping to "pollute" the application process (as one session description put it) -- are causing some to worry that Chinese students might think cheating is their only choice.

"We need to make it [the application process] safe for honest applicants," said Terry Crawford, the chief executive officer and co-founder of InitialView, a video interviewing company based in Beijing.

"There's a perception in China that the system is rigged, that if you pay enough money you're going to get the results that you want," Crawford said. He cited a recent China Newsweek article laying out the process and prices for cheating on the Test of English as a Foreign Language (TOEFL) as just one example of the type of story that feeds into this perception (the reporter received test answers during the exam via a small, wireless-enabled watch)."

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

Interestingly, Initial View, the company that Terry Crawford and Gloria Chyou founded in China, was initially founded to address the problem of fraud in English language tests, by offering applicants the opportunity to make a video of an unscripted interview that they conduct, to be sent to colleges, who can then confirm the fluency of the speaker, and later verify that the student who enrolls is the one who took the interview.

NBER workshop on Market Design: call for papers (October 23-24, in Cambridge)

Mike Ostrovsky and Parag Pathak have announced the following call for papers:

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

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, Massachusetts, on October 23-24, 2015.

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://conference.nber.org/confer/2014/MDs14/program.html

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, 2015 to this link:
http://papers.nber.org/confsubmit/backend/cfp?id=MDf15

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 and discussants 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.

Maclean's review of Who Gets What and Why

In Canada, Maclean's Magazine reviews my new book:

Marketplaces are everywhere—even in online dating
Book review: A look at what makes good market design from game-theory pioneer Alvin E. Roth  by James Brenton, July 9, 2015

The last sentence of the review:
"This book is his way of sharing what he learned along the way, making it an intriguing field guide from a true pioneer."

What do employers learn from interviews? Can they be replaced?

The NY Times had a recent column covering the latest version of this old debate about the informativeness of interviews:

ROBO RECRUITING--Can an Algorithm Hire Better Than a Human?

"A new wave of start-ups — including Gild, Entelo, Textio,Doxa and GapJumpers — is trying various ways to automate hiring. They say that software can do the job more effectively and efficiently than people can. Many people are beginning to buy into the idea. Established headhunting firms like Korn Ferry are incorporating algorithms into their work, too.

"If they succeed, they say, hiring could become faster and less expensive, and their data could lead recruiters to more highly skilled people who are better matches for their companies. Another potential result: a more diverse workplace. The software relies on data to surface candidates from a wide variety of places and match their skills to the job requirements, free of human biases."

Greece and Iran: two very different deadlines

Deadlines are often an important element of economic design, from the design of auctions like eBay's, whose auctions have a well specified deadline after which no more bids are accepted, to negotiations in which e.g. the date at which a labor contract expires may be the deadline for calling a strike.. But the deadlines in the news for a financial bailout of Greece, and Greek banks, is very different from the (repeated) deadlines for nuclear negotiations with Iran.  In the case of Greece, banks will really fail soon without some help--the deadline is real. In the case of Iran, the deadlines are supposed to concentrate the minds of negotiators, but they have already been extended multiple times...

Iran Nuclear Talks Are Extended Once Again

Greece Given Until Sunday to Settle Debt Crisis or Face Disaster

Podcast: Russ Roberts interviews me on EconTalk, about Who Gets What and Why

 Matching Markets: EconTalk Episode with Alvin Roth--Hosted by Russ Roberts, a one-hour podcast/interview about my new book (which you can buy here:)

Tim Harford reviews Who Gets What and Why in the FT

Tim Harford's review in the Financial Times is here: In search of the perfect match

His closing paragraph:
"Economists such as Alvin Roth are like engineers or doctors. They cannot settle for understanding a system in theory; they must solve practical problems too. It’s a hopeful direction for economics — and an essential one, if economists aren’t to be left on the shelf themselves."

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You can also read the piece on Harford's blog, The Undercover Economist

Straw in the wind: Google's Waze is piloting a ridesharing marketplace in Israel

Ynet has the story:
Google's Waze to start carpooling pilot program in Israel
Mapping company launching RideWith, which will allow commuters to pay fellow drivers a small fee to share rides with the help of Waze's navigation system

"Google-owned online mapping company Waze is launching a carpooling pilot program in Israel where commuters pay fellow drivers a small fee for a ride to and from work.

"The new application, called RideWith, will use Waze's navigation system to learn the routes drivers most frequently take to work and match them up with people looking for a ride in the same direction.
...
""We're conducting a small, private beta test in the greater Tel Aviv area for a carpool concept, but we have nothing further to announce at this time," Waze told Reuters of its foray into the increasingly competitive field of ride-sharing.

Drivers will be limited to just two journeys a day and will not be able to earn a salary from RideWith, a source close to the company said, differentiating it from businesses such as Uber, where drivers can turn a profit.

Should RideWith be rolled out globally, this limitation could help it avoid the backlash Uber is facing in a number of countries that want to protect professional taxi drivers."
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Stay tuned...

New York City’s high school admissions process: an excerpt from Who Gets What and Why, in Chalkbeat

Chalkbeat has a brief excerpt from my new book, Who Gets What and Why:

Here's the link to what they have to say (or rather what they have me saying, in an excerpt from Chapter 9 "Back to School"):
Why New York City’s high school admissions process only works most of the time

Below are two paragraphs from the excerpt, concerning Neil Dorosin, who worked for the NYC Department of Education at the time, and is now the Johnny Appleseed of school choice as the director of the Institute for Innovation in Public School Choice (IIPSC):

One reason that principals gained confidence was that DOE staffers did a good job communicating to them how the new system would work. Crucial in that effort was Neil Dorosin, the DOE’s director of high school operations. The task of informing everyone about the new algorithm fell to Neil and his colleagues in the Office of Enrollment Services. Among those he had to educate was his ultimate boss, Chancellor Joel Klein.

“One day I got called down to talk to him,” Neil recalls. “He was upset because he had a friend whose child didn’t get into their first-choice school. The friend had a cousin whose child had gotten into the school, and it was their last choice. I had to explain why the system had to function that way” (i.e., to make it safe to list true preferences).

The lectures of the The 26th Jerusalem School in Economic Theory "Dynamic Games" - 2015, are available on video

Videos of the lectures are available here:

The 26th Jerusalem School in Economic Theory "Dynamic Games" - 2015

The slides are available here

Journal of Human Trafficking, Issue 1, 2015, on kidneys

Issue 1 of the Journal of Human Trafficking contains this article by Alexander Capron and Frank Delmonico. I've highlighted in the abstract two points worth noting--the first involves some untested, but testable empirical claims about what would happen if countries in the first world allowed compensation for donors. (It would be nice to have some empirical evidence...)  The second point is that it is now agreed by everyone that financial disincentives for donating should be removed. (Let's get organized on that, shall we?)

Preventing Trafficking in Organs for Transplantation: An Important Facet of the Fight Against Human Trafficking

DOI:10.1080/23322705.2015.1011491

Alexander M. Caprona & Francis L. Delmonico

pages 56-64

Published online: 28 Apr 2015

Abstract

Most countries now have national legislation that outlaws both human trafficking and organ trafficking. However, international conventions and domestic laws alone have not been enough to stop the trade in organs. As of 2007, a conservative estimate was that 5% of the approximately 100,000 organs transplanted annually were derived from exploiting the poorest and most vulnerable people in society; anti-trafficking efforts have since reduced, though not eliminated, this practice. The Declaration of Istanbul (DoI) was created in 2008 to engage medical professional societies to collaborate with governments and others in combating organ sales, transplant tourism, and trafficking in human organs. In 2010, the Declaration of Istanbul Custodian Group (DICG) was formed to actively promote and to monitor the implementation of the DoI principles. The removal of prohibitions on organ purchases, which is now being promoted in some wealthy nations, is unlikely to shorten transplant waitlists (because organ sales crowd out voluntary, unpaid donation) and would be based on the false view that such sales do not exploit the sellers. To combat such exploitation, the DICG advocates for ratification and enforcement of the new “Council of Europe Convention against Trafficking in Human Organs,” as a complement the Palermo Protocol to the United Nations organized crime convention that prohibits human trafficking for organ removal. To increase ethical organ donation by living related donors, the DICG encourages countries to adopt means to cover donors’ financial costs, which now discourage donation. It also works with the World Health Organization to encourage ministries of health to develop deceased donation to its maximum potential toward the goal of achieving national self-sufficiency in organ transplantation so that patients do not need to travel to foreign destinations to undergo organ transplantation using kidneys and partial livers purchased from poor and vulnerable people. Success in combating human trafficking for organ removal and organ trafficking will be greatly enhanced through organizations like the DICG forging strong relationships with human rights organizations.

An interview in the Times of India, on Who Gets What and Why

A matching market is like marriage — both sides have to choose each other: Alvin Roth
Subodh Varma,TNN | Jul 5, 2015,