Market for sex workers, and human trafficking

The AP reports UK Government Unveils Plan for Sex Trade Crackdown, which has drawn some nuanced reactions from sex workers and others.

"The British government announced plans Wednesday to make it illegal to pay for sex with women forced into prostitution and to name men who solicit sex on the streets -- measures that prostitutes say will put more women at risk.
As part of the Home Office's ''name and shame'' campaign, people who pay for sex with a prostitute ''controlled for another person's gain'' could face criminal charges and a fine of 1,000 pounds ($1,500).
The crime would be a ''strict liability offense,'' which means men would be held accountable even if they didn't know a woman had been trafficked or was working for a pimp, according to the Home Office."
...
"Sex trade workers, however, said the wording of the proposed law would make it illegal for men to use prostitutes who work for other women at brothels or in other voluntary arrangements.
''This is a very dangerous moral crusade,'' Cari Mitchell, spokeswoman for the English Collective of Prostitutes, said Wednesday. ''What this will ultimately do is drive the sex trade further underground and put the focus on criminalizing clients that, for the most part, women aren't complaining about. This plan is of no benefit to women.'' "
...
"[Home Secretary] Smith said there was no public support for a ''wholesale ban'' on paying for sex and the measures were aimed at cutting down on exploitation."
...
"Under current laws in England and Wales, it is illegal to loiter and sell sex on the streets or elsewhere in public. Keeping a brothel is unlawful, but a lone woman selling sex inside is not. Similarly, paying for sex is legal. But solicitation has largely been tolerated."

Organs for transplant: supply and demand

An interesting post at Freakonomics brings to attention a paper in the International Journal of Health Services by Herring, Woolhandler, and Himmelstein titled
INSURANCE STATUS OF U.S. ORGAN DONORS AND TRANSPLANT RECIPIENTS: THE UNINSURED GIVE, BUT RARELY RECEIVE

The subtitle tells much of the story, the paper finds that "16.9 percent of organ donors but only 0.8 percent of transplant recipients were uninsured"

The paper begins with the following story:
"In September of 2005, one of us (Herring), then a third-year medical student, cared for a previously healthy 25-year-old uninsured day laborer who arrived at the emergency department with rapidly advancing idiopathic dilated cardiomyopathy. The patient was ultimately deemed unsuitable for cardiac transplantation.
The decision on transplantation was driven, in part, by realistic concern about the patient’s inability to pay for long-term immunosuppressive therapy and to support himself during recovery. Absent such resources, the likelihood of a successful outcome is compromised (1–4). The clinicians caring for him faced a wrenching dilemma: deny the patient a transplant, or use a scarce organ for a patient with a reduced chance of success. He died of heart failure two weeks after his initial presentation. This tragedy inspired us to examine data on the participation of the uninsured in organ transplantation, both as recipients and as donors."

HT Scott Kominers

Matching students to high schools in NYC

The final version of our paper on the design of the NYC high school match is now available: Abdulkadiroglu, Atila , Parag A. Pathak, and Alvin E. Roth, "Strategy-proofness versus Efficiency in Matching with Indifferences: Redesigning the NYC High School Match,'' revised, November, 2008, American Economic Review, forthcoming.

This paper had a long evolution, partly because of the actual work it represents, and partly because of the lengthy and interesting process of figuring out and negotiating (among coauthors and with editors and referees) how to write a paper that properly represents the mix of theory, institutional detail, and empirical work that is integral to practical market design.

Incentives for kidneys

Kidney Disease Takes a Growing Toll reports the Times, as a result of diabetes and hypertension. The article touches on the debate about compensation for donors.

Writing of the National Kidney foundation the article says
"The organization has also been criticized by advocates who support financial compensation for organ donors, which the foundation firmly opposes as unethical and unlikely to increase the availability of organs. (In contrast, the American Association of Kidney Patients supports research into how financial incentives would affect organ donation.)"

Receivables exchange

The NY Times reports on a new online market in which companies can sell their receivables: An Online Market for Selling I.O.U.’s

"Businesses getting pinched by the credit squeeze can now tap a new source of cash — by selling the money owed to them by other companies.
A new online marketplace, the Receivables Exchange, was formally introduced on Monday after 18 months in development. It allows companies to sell their outstanding receivables at a discount to a panoply of financial institutions."

Truth in advertising: I'm on their advisory board.

Market for health care: adding choice in Britain

Choice is having an effect on Britain's National Health Service, the Telegraph reports:
NHS hospital units shunned by patients face closure
NHS hospitals units are facing closure as patients choose to be treated in more successful medical centres, new figures show.

"Patients are now able to choose where they are treated, with many snubbing the traditional visit to their local hospital and opting for units with the best treatment records, facilities and, crucially, cleanliness and infection control.
GPs can also choose where to send their patients. Crucially, hospitals no longer receive a guaranteed block grant and are paid according to the number of patients they treat. "

"The internal market reforms were the source of a bitter struggle within the Labour Government. Tony Blair and Alan Milburn, his Health Secretary, fought against union and backbench opposition to force through many of the changes to the way the NHS was run. "

Gay marriage: protests over election setbacks

I think of bans on who can marry whom as being pure cases of repugnant transactions, namely transactions that some people don't want other people to be able to participate in. In the case of gay marriage, we're seeing the beginning of the end of an ancient ban, but it may not come easily.

The NY Times reports that demonstrations have been held in protest over Proposition 8 in California: Across U.S., Big Rallies for Same-Sex Marriage

"In New York, some 4,000 people gathered at City Hall, where speakers repeatedly called same-sex marriage “the greatest civil rights battle of our generation.”"

"The big crowds notwithstanding, it has been a tough month for gay rights. Proposition 8 was just one of three measures on same-sex marriage passed on Nov. 4, with constitutional bans also being approved in Arizona and Florida. In Arkansas, voters passed a measure aimed at barring gay men and lesbians from adopting children. "

"The protests over Proposition 8 also come even as same-sex marriages began Wednesday in Connecticut, which joined Massachusetts as the only states allowing such ceremonies. By contrast, 30 states have constitutional bans on such unions. "

Organized crime in Japan

The market for crime is organized differently in Japan. The NY Times reports on a local lawsuit involving the headquarters of a yakuza headquarters: Neighborhood in Japan Sues in Bid to Oust Mafia

"The Dojinkai is one of the country’s 22 crime syndicates, employing some 85,000 members and recognized by the government.
Traditionally, the yakuza have run protection rackets, as well as gambling, sex and other businesses that the authorities believed were a necessary part of any society. By letting the yakuza operate relatively freely, the authorities were able to keep an extremely close watch on them."

British organ donation: opt in versus opt out

The Telegraph reports that A report into organ donation ordered by Gordon Brown will not recommend a system of presumed consent.

"The group ordered to look into the system as a possible solution to a shortage of donors is due to report at the start of next week. It will recommend that ministers work to increase the number of donors but is expected to favour a situation where donors still register to donate organs after their death.
The group is understood to have come under pressure from Muslim organisations to keep the opt-in system.
But senior government figures, including the Prime Minister and Liam Donaldson, the Chief Medical Officer, are understood to believe that presumed consent is the only way to solve the problem. "

The London Times also covers the story, with a different emphasis: Brown’s organ donor plan is rejected by scientists

"Mr Brown has argued previously that presumed consent, already used in Spain and other countries, could help to “close the aching gap between the potential benefits of transplant surgery in the UK and the limits imposed by our current system of consent”. ...
But the taskforce, an expert working group of healthcare professionals, lawyers and ethicists set up to look at ways to increase the number of organ donations, is understood to believe that an opt-out system would do little to boost the number of life-saving transplants. It is expected to say such a move would create practical problems for the NHS and risk a potential backlash among the public.
Last night a senior Whitehall source told The Times: “It’s fair to say this report is not helpful to the case for a change in the law to presumed consent.” "

Thaler and Sunstein will be disappointed too.

Update: Thaler emails me as follows
"Thaler and Sunstein will NOT be disappointed. We favor mandated choice for two reasons. First, presumed consent raises hackles. Second, it leads to more overrides by family since the donor's intentions may be only implicit.
Illinois has adopted this with zero fanfare. When you renew your license they just ask you "donor or not donor". Perfect."

Repugnant transactions in Inauguration tickets

eBay to Ban Resale of Inaugural Tickets

"eBay Inc. is banning the sale of coveted free tickets to the swearing-in of President-elect Barack Obama after a U.S. senator said she was crafting a bill to make such online sales a federal crime.
Representatives of the online auction site met with the Joint Congressional Committee on Inaugural Ceremonies this week and came to a mutual decision on the prohibition, said Nichola Sharpe, a spokeswoman for eBay.
“The tickets are free. We felt that it is an official event,” Sharpe said in an interview today. “We think it’s in the best interest of all concerned.”
Sen. Dianne Feinstein (D-Calif.), chairman of the committee, announced Monday that she was contacting sites, like eBay and Craigslist, to ask them to stop selling the tickets to the Jan. 20 event. She also said she was drafting legislation to criminalize the sales. "

Market for lawyers

A NY Times article reports that the recession is causing some law firms to contract: Law Firms Feel Strain of Layoffs and Cutbacks .

It contains two insights into the market that struck me:

"Lawyer departures, whether voluntary or through layoffs, pose special risks to firms. Layoffs scare off law school recruits, who crave security and wealth. "

“Clients often don’t want to invest in discretionary litigation in a downturn,” Mr. Younger said. Responding to government investigations has been keeping lawyers busy but does not generate continuing work for armies of associates, like a big lawsuit does, he said. “There are tons of government investigations going on now.”

Treasury abandons plans for reverse auction to purchase troubled assets

The Treasury announced today what had already become clear, which is that it has abandoned the initial plan to purchase troubled assets, in favor of buying equity in troubled companies: Remarks by Secretary Henry M. Paulson, Jr. on Financial Rescue Package and Economic Update

"As credit markets froze in mid-September, the Administration asked Congress for broad tools and flexibility to rescue the financial system. We asked for $700 billion to purchase troubled assets from financial institutions. At the time, we believed that would be the most effective means of getting credit flowing again.
During the two weeks that Congress considered the legislation, market conditions worsened considerably. It was clear to me by the time the bill was signed on October 3rd that we needed to act quickly and forcefully, and that purchasing troubled assets – our initial focus – would take time to implement and would not be sufficient given the severity of the problem. In consultation with the Federal Reserve, I determined that the most timely, effective step to improve credit market conditions was to strengthen bank balance sheets quickly through direct purchases of equity in banks. "

HT to Eric Budish (a market designer on the market)

Market for medical services: time of day

Timing is an important part of many markets: Beth Israel Medical Center in NYC is experimenting with a 24 hour a day clinic for non-emergency services, intended to serve parts of the market that have trouble making appointments during standard doctors' hours: When You Just Have to Get a Flu Shot... at 3 A.M.

Market for spam

The BBC, reporting on the work of Stefan Savage, director of UCSD's Collaborative Center for Internet Epidemiology and Defenses, says that the number of sales generated by spam are surprisingly small, so that spam networks might be vulnerable to measures that would increase their costs even slightly: Study shows how spammers cash in

Savage's study involved sending his own spam, he must have had an interesting conversation with UCSD's Institutional Review Board (i.e. human subjects committee...)

College admissions, international

Harvard's director of admissions visits China: Colleges scour China for top students

"There are no quotas, no limits on the number of Chinese students we might take," Fitzsimmons told a standing-room-only crowd of more than 300 students during a visit to Beijing No. 4 High School. "We know there are very good students from China not applying now. I hope to get them into the pool to compete."

Market for check cashing and payday loans

The NY Times has a nuanced article about the business and recent sale of a big check cashing chain: Check Cashers, Redeemed

"Selling to the poor is a tricky business. Poor people pay more for just about everything, from fresh groceries to banking; Prahalad, the economist, calls it the “poverty penalty.” They pay more for all kinds of reasons, but maybe most of all because mainstream firms decline to compete for their business. Nix has served customers that traditional financial institutions neglected, but he has also profited from that neglect. Whether he profited too much, charging poor communities what the market would bear — that’s a moral question as much as an economic one. And there’s no simple answer. "

Academic marketplace

Tough Times Strain Colleges Rich and Poor
"“Budget cuts mean that campuses won’t be able to fill faculty vacancies, that the student-faculty ratio rises, that students have lecturers instead of tenured professors,” said Mark G. Yudof, president of the California system. “Higher education is very labor intensive. We may be getting to the point where there will have to be some basic change in the model.” "

In the meantime, there's concern that the credit crisis will reduce the availability of student loans:
U.S. Buying More Loans to Students
"While students are still able to obtain federally backed loans, the credit crisis has hurt the lenders that provide them. Dozens have stopped offering the loans, blaming market conditions.
The initiative by the Education Department is intended to make it easier for these loan companies to obtain financing. In the 2009-10 academic year, the agency will purchase loans, as it has this year. The agency will also pledge to be the buyer of last resort for loans purchased by a private intermediary in an effort to foster investment in the student loan industry."

Pope Benedict speaks about organ transplantation

Pope condemns organ transplant abuses as ‘abominable’, the Catholic News Agency reports. (stale link is updated at bottom of post)

 The Pope spoke to a conference at the Pontifical Academy for Life. "Pope Benedict began his address to the conference entitled, “A Gift for Life. Considerations on Organ Donation.” by applauding the great advances of medical science in the realm of issue and organ transplants. Though these measures give hope to people who are suffering, he lamented the problem of a limited availability of organs, as evidenced “in the long waiting lists of many sick people whose only hopes of survival are linked to a minimal supply which in no way corresponds to effective need." Despite the fact that the supply of organs is limited, the Pontiff emphasized that people can only donate, “if the health and identity of the individual are never put at serious risk, and always for morally-valid and proportional reasons. Any logic of buying and selling of organs, or the adoption of discriminatory or utilitarian criteria ... is morally unacceptable,” he stressed. " "The Pope went on to address abuses in the transplant plant of organs and tissues such as organ trafficking, which often affect innocent people such as children. These abuses, he said, “must find the scientific and medical community united in a joint refusal. These are unacceptable practices which must be condemned as abominable.”

*********

Update of stale links (June 2022)

NOVEMBER 7, 2008  UPDATED 14 YEARS AGO

Pope slams human organ trade, warns on transplants

Animal organs for human transplants

The Times of London reports on hopes of
Pig organs ‘available to patients in a decade’

If the formidable immunilogical barriers to such xenotransplants can be overcome, it would be a welcome development that could overcome the present dire shortage of transplantable organs. I'd be happy to see kidney exchange replaced by even better alternatives.

Pig kidneys for transplantation would presumably be sold without becoming a repugnant transaction of the kind that selling human kidneys is widely seen to be. However the breeding of transgenic pigs involves some of the same perception of repugnance:

"Professor Winston said that “organs that might be transplantable” could be ready “within two to three years” and on the basis that research went smoothly they would be fully licensed and tested in as little as ten years. He expected the first “proof of principle” pigs to be bred next year.
Two months ago he hit out at the “red tape” blocking the project’s progress in Britain. Under UK and EU rules, his team has been banned from mating and producing offspring from the transgenic pigs. Research in developing transgenic pigs is now likely to move to the US where the regulatory system is more relaxed. "

Market for professors

A report from Boston College's Center for International Higher Education says that Saudi Arabia has the highest academic salaries, and China the lowest. (I suspect that this may not reflect the qualities of the universities that will emerge in those two very different places...)

Gay marriage: one step forward, 3 steps back

Election day was a good day for studying repugnant transactions, that is, transactions that some people want to engage in, but others don't want them to be able to:
Bans in 3 States on Gay Marriage

In Massachusetts, a referendum banned greyhound racing.

In other referenda relating to repugnant transactions, Colorado and South Dakota voters rejected bills banning most abortions, Arkansas voted to prohibit unmarried couples from adopting children, Massachusetts voters decriminalized possession (but not sale) of less than 1 ounce of marijuana, Michigan legalized marijuana for medical uses, voters in the State of Washington legalized physician-assisted suicide for terminally ill patients, and San Franciscans defeated a proposition that would have prevented police from enforcing laws against prostitution.

School choice in England

School choice in England is in disarray: schools aren't supposed to be able to use their own preferences to select students, and this is a hard rule to enforce, the Telegraph reports:

Admissions chaos as thousands of schools flout rules
Schools face tighter admissions rules after thousands were found to be flouting guidelines designed to stop middle-class pupils dominating places.

Telephone call pricing between telephone companies

Ever wonder how payments are regulated/arranged between phone companies when you call someone who is a customer of a different company?
FCC Scraps Vote on Controversial Phone-Rate Plan

"Mr. Martin had proposed to lower the rates phone carriers pay each other to transfer calls to almost nothing and allow companies that would lose money from the change to raise their monthly subscriber rates by as much as $1.50 for residential phone lines. Business increases would have gone as high as $2.50 per month.
The current phone-exchange payment system, which dates back to the breakup of the Bell system in 1984, is widely divergent, with some carriers charging a fraction of a penny per minute for outside calls to their customers and others charging hundreds of times that much for the same service.
The FCC has for years tried to reform the payment system, but policy makers and industry sectors can't agree on a solution."

The market for science

The "republic of science" is the original open source public good, and its origins are traced to Renaissance patronage of science and math, in Paul David's essay in Capitalism and Society, The Historical Origins of 'Open Science': An Essay on Patronage, Reputation and Common Agency Contracting in the Scientific Revolution

The essay is accompanied by a comment by Ken Arrow, who summarizes the issue as follows:
" Scientific activity, like any other, requires resources, in the first instance: human resources usually with considerable alternative value, but also material
resources of an increasingly expensive nature. The typical dissemination of scientific information does not, in general, yield any income; indeed, publication itself is costly and was more so before the invention of printing.
"David concentrates in this paper on the development of scientific activity from the 15th to the 17th centuries, a period clearly of the greatest importance in setting the tone and style of the modern Scientific Revolution. His thesis, amply documented, is that the prestige to patrons, generally rulers, was an important motive for the support of science. They were not unaware of the practical usefulness of scientific discovery in technological development, but the sheer display value was an additional and powerful motive. To achieve this prestige, though, it was necessary to evaluate the qualities of the scientists to be supported. Especially in the case of mathematics, this was beyond the capacity of the rulers or their ministers. An open diffusion of science, then, was needed to permit critical evaluation, as well, indeed, as to display the prestige-granting science. Hence, the gradual emergence of the apparatus and value-system of science: publications, the opportunity for comment and criticism, and, eventually, the emergence of publicly supported academies, such as the Royal Society in England and the Académie des Sciences in France, and of periodicals for the diffusion of ideas."

Incentives for students who get good grades

The Washington Post reports on experimental programs to reward inner city kids when they do well in school: Incentives Can Make Or Break Students: Ethical Issues Come With Gains on Tests
"The inducements range from prepaid cellphones to MP3 players to gift certificates. But most of them are cash: $10 for New York City seventh-graders who complete a periodic test; $50 for Chicago high school freshmen who ace their courses; as much as $110 to Baltimore students for improved scores on the Maryland High School Assessments. "

Some find this repugnant: "Critics denounce the initiatives as bribery and say the money could be better invested in ideas known to work, such as smaller class size. They also point to a body of psychological research suggesting that tangible rewards can erode children's intrinsic motivation. DePaul University education professor Ronald Chennault says there are ethical issues posed by the ventures, most of which are experimental and dependent on private funding and local political support."

Harvard's Roland Fryer is directing some of these experiments. "This is not a silver bullet," he said during a recent visit to the District. "But it's better than sitting around and doing nothing."

Labor Market Intermediation

David Autor has an essay on The Economics of Labour Market Intermediation"

"One might have speculated that in an era of rapid information flows and substantial job mobility, the importance of labour market intermediaries would wane. Indeed, the most prominent labour market intermediary, the traditional labour union, has been in secular declines for decades. Yet, the decline of labour unions is the exception rather than the rule. Two of the intermediaries discussed above – online search engines and centralised medical matches – have only recently gained prominence. And another labour market intermediary not even considered above, temporary help agencies, has risen from relative obscurity to international significance over the last two decades. "

The Federal Reserve’s Term Auction Facility

As the credit crisis unfolded, the Fed prepared to auction funds to banks. Among other design features (such as how expressive a bidding language to allow) they thought about adverse selection: they wanted to reduce the signal value "stigma" of participation.

The Federal Reserve’s Term Auction Facility
July 2008 Volume 14, Number 5
Authors: Olivier Armantier, Sandra Krieger, and James McAndrews

Abstract: "As liquidity conditions in the term funding markets grew increasingly strained in late 2007, the Federal Reserve began making funds available directly to banks through a new tool, the Term Auction Facility (TAF). The TAF provides term funding on a collateralized basis, at interest rates and amounts set by auction. The facility is designed to improve liquidity by making it easier for sound institutions to borrow when the markets are not operating efficiently."

Auction Design: "Once the Federal Reserve concluded that an auction format was an effective funding alternative, it added features aimed at ensuring the most efficient distribution of funds to banks with a high demand. In particular, the Fed established a minimum rate at which bids could be submitted that was set in a comparable, competitive market (rather than a penalty rate, which is set at a premium to existing market rates).This market-based minimum bid rate was likely to encourage participation and reduce any stigma associated with receiving auctioned funds, since banks would not necessarily signal an abnormally high demand by bidding. The Federal Reserve also chose a uniform-price (or single-price) auction rather than a discriminatory (pay-your-bid) auction in part to spur participation further. By using the uniform-price structure common in Treasury auctions, the Fed reasoned that banks would be more comfortable with bidding. Finally, to allow for the widest allocation of funds, the central bank imposed a cap on the bid amount corresponding to 10 percent of the auction size.
The Fed also imposed two important rules. First, based on its experience with option auctions in 1999, it would allow each bidder to make two rate-amount offers. This rule represents the Fed’s resolution of the trade-off associated with multiple rate-amount offers: as the number of offers increases, the auction becomes more complex, but participants are able to make bids that are more representative of their demand. Second, the central bank would require TAF participants to pledge collateral beyond the amount necessary to secure credit in the new facility. This rule was imposed to ensure that bidders in the new facility could still borrow through the discount window’s primary credit facility to meet unexpected overnight funding needs."

Credit Default Swaps: reducing counterparty risk

New York Fed Welcomes Further Industry Commitments on Over-the-Counter Derivatives

"The following areas constitute our central priorities for addressing both operational and market design concerns for OTC derivatives:
Institute a Central Counterparty (CCP) for Credit Default Swaps (CDS)...
Reduce Levels of Outstanding Trades via Portfolio Compression. Market participants continue to reduce the number of outstanding CDS trades through multilateral trade terminations (tear-ups)
Enhance Market Transparency.

HT to PrefBlog

Bank secrecy:

U.S. and Swiss law differ regarding U.S. citizens who keep accounts in Swiss banks that do business in the U.S., and an interesting game is afoot:
IRS, Justice Target Undisclosed Assets In Swiss Accounts

"Over the summer, the IRS won permission from a federal court to demand that UBS turn over the identities of an estimated 19,000 American clients who have failed to disclose their Swiss-based accounts on U.S. tax returns. It remains unclear what has or will come of that effort. Swiss law restricts the bank's ability to breach client confidentiality. Swiss law also gives clients the opportunity to oppose the release of their names through a judicial process that could slow any disclosures. "...

"James Nason, a spokesman for the Swiss Bankers Association, said, "UBS itself cannot decide to hand over client data because then it would be violating Swiss law." Any Swiss bank "waits for instructions from the Swiss authorities," Nason said, adding, "Switzerland doesn't allow fishing expeditions." ...

"Whether or not the Swiss officially give up clients' secrets, the U.S. government could have other ways of getting information. For example, bank employees have an incentive to expose tax evaders to the IRS, Skarlatos said, because whistle-blowers could receive 30 percent of the money they help the government collect. "

Market for toilets: NYC marathon

Providing Toilets for 39,000 Runners

The NYC marathon is a peak load event:
"Gathering and placing 2,250 portable toilets for a one-day event — and then removing them almost immediately — is a daunting task. The marathon represents the third-largest annual assemblage of portable toilets in the country, behind the Rose Bowl college football game and parade and the motorcycle rally in Sturgis, S.D. Placed side by side, the 4-foot-wide toilets would stretch 1.7 miles. "

Apparently portable potties have a natural life cycle:
"The average special-event life of a portable toilet, Malone said, is two years — shorter if it attends a lot of concerts — before it is assigned to duty at construction sites, the “bread and butter” of the business. "

Piracy

The LA Times reports: Somalia's pirate problem grows more rampant

"Entire villages along the coast now engage in piracy. Unemployed youths provide the muscle. Idle fishermen offer boats and knowledge of the coastline. Foreign businessmen provide the money for guns, radios and satellite phones. Islamic hard-liners are lured by the chance to attack Western interests offshore.
The result is a criminal free-for-all. Pirate attacks off the coast of Somalia have tripled over the last three years, with nearly three a week in 2008, maritime officials say. Currently there are about a dozen hijacked ships, with more than 300 crew members, being held hostage. Ransom payments are often as high as $2 million."

Market for marketing professors

Dan Goldstein at LBS has published his impressions of and advice about the interviewing process at the American Marketing Association annual meetings: If you can get through this, you can be a marketing professor, EVERYTHING YOU EVER WANTED TO KNOW ABOUT THE AMA INTERVIEWS (2008 edition)

The Marketing meetings come half a year earlier than the Economics meetings, but they have a family resemblance. (I gather that years ago the Marketing job market meetings happened at the same time as Economics, as part of the ASSA meetings, but that the Marketing market unraveled...)

HT to Katy Milkman (who is on the market this year)

Market for masseurs in S. Korea

SKorean Court Rules in Favor of Blind Masseurs

"A law that allows only visually impaired people to become licensed masseurs does not violate South Korea's constitution, a court ruled Thursday in a victory for the blind.
The decision brings an end to a fierce legal battle over whether the sighted should be allowed to become professional masseurs, a trade that has been reserved for the blind for nearly a century. The debate has sparked fervent protests by the blind, who say massage is their only chance at making a living."

Market for elephant ivory

The Times of London reports on a government sponsored sale of legal elephant ivory (I presume taken from elephants that died a natural death):
Ivory from 10,000 elephants on sale amid fears of new slaughter

"Wildlife groups and other African nations fear that the controversial sell-off could breathe life back into the ivory trade, banned in 1989, and trigger a resurgence of the poaching that devastated Africa’s elephant populations in the 1970s and 1980s.
Julian Newman, campaigns director with the Environmental Investigation Agency, said that the move could once again open the floodgates to poaching, which reduced Africa’s total elephant population from five million in the 1930s to about 600,000 today. “This [auction], coupled with a lack of sufficient checks in importing countries such as China and instability in some African range states, could easily drag us back to the dark and bloody days of the 1980s when we were seeing around 200 elephants killed by poachers each week.” Conservationists argue that a lack of proper oversight will allow poachers to mix illegal and legal ivory and slip it past regulators, many of them corrupt. "

Market for bribes and corrupt influence

A MA state senator has been charged with accepting bribes to influence the issuing of a liquor license. The criminal complaint describes how the transactions are alleged to have been carried out. It turns out to be unwise to take bribes from a cooperating witness.

Blood supply safety--paid versus unpaid

The Food and Drug Administration is responsible for keeping the blood suppy safe. As anyone who gives blood knows, before you can give blood you have to be interviewed about your sexual habits and other potential risk factors. Some donors are turned away, "deferred," based on their answers. (There are recently limits on how much cumulative time overseas a donor can have had, which exclude me.)

Here is a transcript of an FDA conference on Behavior-Based Donor Deferrals in the NAT Era (NAT is nucleic acid testing, i.e. it refers to the non-behavioral ways of screening the blood supply). It has some interesting points, including this on paid versus unpaid donation:

"But looking a little bit more closely at the role that has been played by behavioral exclusion, this is just an example for viral hepatitis. In the 1970s there was concomitant introduction of labeling of paid versus volunteer donation for blood for transfusion, which was at the same time as the first generation of the test for HBsAg, and the combined effect was a very dramatic, approximately 90 percent, reduction. We have never completely teased out how much of this was due solely to the change in labeling which eliminated paid donation, but we do know from the antecedent literature that paid donation was highly associated with transmission of hepatitis."

That is, donors can be paid for blood donation, but paid donations must be labelled as such.

Universities in the current economy

The Chronicle of Higher Education reports: Booming States Lure Academics From Those With Financial Woes (un-gated version here for five days).

Texas, anyone?

Auctions for seats at sporting events

The Jets Gross $16 Million in a Seat-License Auction

The days when sports teams sold tickets at below market clearing prices to fans who waited on long lines are fading fast.

NBER working papers on design of partnerships and auctions

Two new NBER papers touch on market design: Hilt and O'Banion discuss the introduction of limited partnerships, and Bajari and Yeo look at how changes in the rules of FCC spectrum auctions changed bidding behavior.


The Limited Partnership in New York, 1822-1853: Partnerships without Kinship
by Eric Hilt, Katharine E. O'Banion - #14412 (DAE LE)

Abstract:

In 1822, New York became the first common-law state to authorize the formation of limited partnerships, and over the ensuing decades, many other states followed. Most prior research has suggested that these statutes were utilized only rarely, but little is known about their
effects. Using newly collected data, this paper analyzes the use of the limited partnership in nineteenth-century New York City. We find that the limited partnership form was adopted by a surprising number of firms, and that limited partnerships had more capital, failed at lower rates, and were less likely to be formed on the basis of kinship ties, compared to ordinary partnerships. The latter differences were not simply due to selection: even though the merchants who invested in limited partnerships were a wealthy and successful elite, their own ordinary partnerships were quite different from their limited partnerships. The results suggest that the limited partnership facilitated investments outside kinship networks, and into the hands of talented young merchants.
http://papers.nber.org/papers/W14412


Auction Design and Tacit Collusion in FCC Spectrum Auctions by Patrick Bajari, Jungwon Yeo - #14441 (IO)

Abstract:

The Federal Communications Commission (FCC) has used auctions to award spectrum since 1994. During this time period, the FCC has experimented with a variety of auctions rules including click box bidding and anonymous bidding. These rule changes make the actions of bidders less visible during the auction and also limit the set of bids which can be submitted by a bidder during a particular round. Economic theory suggests that tacit collusion may be more difficult as a result. We examine this proposition using data from 4 auctions: the PCS C Block, Auction 35, the Advanced Wireless Service auction and the 700 Mhz auction. We examine the frequency of jump bids, retaliatory bids and straightforward bids across these auctions. While this simple descriptive exercise has a number of limitations, the data suggests that these rule changes did limit firms' ability to tacitly collude.
http://papers.nber.org/papers/W14441

Slavery

Court Finds Niger Guilty on Slavery Charge

"A West African regional court found the government of Niger guilty on Monday of failing to protect a young woman who was sold into slavery at the age of 12. ...
"Slavery is outlawed in Niger and the rest of Africa, but it persists in pockets of Niger, Mali and Mauritania. Ms. Mani’s experience was typical of the practice. Her impoverished family sold her to a farmer named Souleymane Naroua when she was 12 for about $500."

Business networking thrives in a recession

Business networking is countercyclical: the Financial Times reports
"Professional networks such as LinkedIn and Xing, a European rival, have surged in popularity amid the economic crisis, as people look for advice and jobs from their online contacts."

"Online recruitment sites, such as Monster, Careerbuilder and Yahoo’s HotJobs, saw visitors leap 42 per cent in the same period.
“Financial services is one of our fastest-growing sectors,” said Mr Nye, with activity – frequency and duration of visits – up 50 per cent in August and September.
“Clearly people are joining as they are thinking about their employment situation. People are also getting advice from their network, reference-checking vendors or searching for candidates to fill positions.”
Xing now hosts a 2,000-strong group for “Lehman Brothers Alumni”.
Lars Hinrichs, chairman and chief executive of Xing, said: “We see the crisis as very beneficial for business networks because you are spending more time on your career than on luxuries.”

Property rights

A lack of well defined property rights can hamper efficiency. A case in point: Christians Feud Over Church of Holy Sepulcher

"The Israeli government has long wanted to build a fire exit in the church, which regularly fills with thousands of pilgrims and has only one main door, but the plan is on hold because the sects cannot agree where the exit will be built. In another example, a ladder placed on a ledge over the entrance sometime in the 19th century has remained there ever since because of a dispute over who has the authority to take it down."

Animal rights and food production in CA--Proposition 2

Animal rights, and what kinds of food can be sold, continue to be an issue in California (and not just in connection with the 1998 referendum banning the sale of horse meat). Here are two stories about Proposition 2, on this year's ballot:
A California Ballot Measure Offers Rights for Farm Animals , and
The Barnyard Strategist

"Proposition 2, co-sponsored by the Humane Society and Farm Sanctuary, the biggest farm-animal-rights group in the United States, focuses on what are considered the worst animal-confinement systems in factory farms. The ballot initiative, which voters will decide on Nov. 4, requires that by 2015 farm animals be able to stand up, lie down, turn around and fully extend their limbs. In effect that translates into a ban on the two-foot-wide crates that tightly confine pregnant pigs and calves raised for veal — a space so small that they can’t turn around. And it would eliminate so-called battery cages where four or more hens share a space about the size of a file drawer."

Some years ago, New Zealand's Animal Welfare Act of 1999 gave considerable deference to the rights of "Non-Human Hominids," such as chimps and other 'great apes'. I recall Ted Bergstrom remarking at the time that there weren't many chimps in New Zealand, and that New Zealanders could have made more of a statement by giving rights to sheep. It looks like Californians are going to have an option like that at the polls next week.

Market for coffee

I wonder what a recession will do to high end coffee shops. Will Americans back away from $4.00 cappuchinos? Or will those seem like a still-affordable luxury--just as luxurious (in their own way) as a Rolls Royce, but cheaper... The NY Times reports on high end coffee shops in NYC: Bean Town

Assisted suicide and "death tourism"

The Times of London follows the Swiss suicide ‘clinic’ Dignitas

"The Crown Prosecution Service is deciding whether to press charges against the parents of Daniel James after it learnt that they had accompanied him to Dignitas, where he ended his life last month. The case has provoked sympathy and condemnation in almost equal measure because, unlike most previous cases, Mr James was not terminally ill. ..."

"Switzerland allows assisted suicide by a nondoctor provided that it is not done for profit. That is the most liberal ruling in Europe and its principles were set out as early as 1918: “In modern penal law suicide is not a crime . . . aiding and abetting suicide can themselves be inspired by altruistic motives.”Even critics of Dignitas such as Andreas Brunner, the state prosecutor in Zurich, accept the principle. “But there should be tighter controls, regulating the quality of the help offered,” Mr Brunner argued. “And more transparency when it comes to individual cases, to finances and to the organisation itself.”The real concern is not the practice of helping people to die – one Swiss organisation, Exit, has helped more than 700 Swiss citizens and has escaped most political criticism – but the tarnished image that comes with being seen as the suicide capital of Europe. Opponents call it “death tourism”."

An accompanying story explains Why I prescribe drugs for suicide, by Dignitas doctor

Britain's National Health Service and private medicine

Up until now, Britain's NHS has insisted that patients either accept the NHS's formulary which does not cover some expensive drugs, or give up all access to NHS care; i.e. patients who pay for some of their own drugs have been required to pay for all of their drugs and treatment, even those that would have been free to other British citizens. Now, the Telegraph reports:
"NHS patients will be allowed to pay for private 'top up' care: Patients will be allowed to pay privately for drugs and still receive NHS treatment under plans to be announced by the Government in the next fortnight. "

"Under current rules, hospitals may withdraw treatment from patients who want to use their own money to buy drugs not available on the health service.
But Alan Johnson, the Health Secretary, is preparing to announce that so-called top-up payments will be allowed. "
...
"Concerns have been raised that such a move would create a two-tier health service where wealthy patients buy life saving treatments denied to those who cannot afford them.
...The Government ordered a review into top-up payments earlier in the year. There has been a public outcry after some NHS hospitals refused to treat those paying for their own drugs or other treatments."

Freakonomics on legalizing prostitution

Should Prostitution Be Decriminalized?, a thoughtful post on the subject at Freakonomics.

eBay hasn't replaced garage sales

The credit crunch is bringing them back: Garage Sales on Rise With Economic Downturn

Debt and fairness

Margaret Atwood points out that credit and debt are not only economically important but highly emotive, and that solutions to the credit crisis will also involve deeply held beliefs about fairness:
A Matter of Life and Debt

Not so many centuries ago, debt transactions were considered repugnant in many parts of the world (and are still so considered in parts of the Islamic world).

Kidney Exchange on Grey's Anatomy

Kidney exchange makes it into fiction on the Oct.23 episode of Grey's Anatomy, even more complicated than in real life (or at least complicated in different ways).

"Miranda pulls all the surgical residents and interns for a "domino surgery," -- 12 kidney transplants in six O.R.s at the same time. "This whole surgery is a giant house of cards. If we lose one donor, we lose them all," Miranda advises the team. Complications arise with one young man whose estranged father is paying him $10,000 to donate his kidney. Izzie complains to Miranda, but they all agree to turn a blind eye so that the surgery -- which is making national news -- can go on. The surgeries are canceled when a female donor learns that her husband's donor is also his lover of three years and decides not to donate her kidney. Miranda reminds her that five other peoples' lives are on the line as well and the woman agrees to go ahead with the surgery. "
{I'm guessing they mean 6 transplants in 12 O.R.s, 6 for the nephrectomies and 6 for the transplants, but I didn't see the show...A.R.}

HT to Greg Barron