Ramesh Johari's class on Platform and Marketplace Design, winter 2015

Here's a class by Ramesh Johari, well worth considering in the Winter quarter at Stanford:

MS&E 336: Platform and Marketplace Design The last decade has witnessed a meteoric rise in the number of online markets and platforms competing with traditional mechanisms of trade. Examples of such markets include online marketplaces for goods, such as eBay; online dating markets; markets for shared resources, such as Lyft, Uber, and Airbnb; and online labor markets. We will review recent research that aims to both understand and design such markets. Emphasis on mathematical modeling and methodology, with a view towards preparing Ph.D. students for research in this area. Prerequisites: Mathematical maturity; 300-level background in optimization and probability; prior exposure to game theory.

Updates on school choice

Some recent articles look at school choice in several American cities, including some (Denver, New Orleans, DC) where IIPSC has helped out, and some that are contemplating a unified school choice system.

Detroit Needs Universal Enrollment for District and Charter Schools, Report Says
"Creating a one-stop shop where Detroit families can enroll in both district and charter schools would help families navigate what has become a very complex school-choice system. That's at the heart of a series of recommendations made in a report commissioned by Excellent Schools Detroit, a nonprofit devoted to improving the city's schools."



How Parents Experience Public School Choice
By Ashley Jochim, Michael DeArmond, Betheny Gross, and Robin Lake

From the executive summary:
"A growing number of cities now provide a range of public school options for families to choose from. Choosing a school can be one of the most stressful decisions parents make on behalf of their child. For all families, but for some more than others, getting access to the right public school will determine their child’s future success. How are parents faring in cities where choice is widely available?
...
"Parents experience school choice differently in different cities. Differences across the cities suggest parents’ perceived challenges and opportunities with choice vary depending on where they live.

"In Denver, New Orleans, and Washington, D.C., parents were more likely than parents in the other cities to say their school systems were getting better. In Philadelphia, only 11 percent of parents reported having a positive outlook about the public education system, compared to 65 percent in D.C.

"However, a generally positive outlook does not necessarily mean that families are satisfied with their public school options. Denver parents were most likely to report having another good public school option available to them, but parents in Philadelphia, New Orleans, and D.C. reported the most challenge finding a school that provided a good fit for their child.
...
"Cities have made uneven investments in the systems that support parent choice. Parents’ experiences with choice are likely shaped by the systems and supports put in place by policymakers, including access to information about schools, the enrollment process, and transportation options.

"Denver, D.C., and New Orleans have made the most progress in investing in these systems. However, we saw little consistent evidence linking specific investments with positive outcomes, which may simply be a reflection of the newness of the investment or may indicate the need for these cities to
go further into developing these supports.

"In Denver, parents who enrolled their child after implementation of the common (sometimes called “unified” or “universal”) enrollment system, which enables parents to apply to all charter and district schools via a single application, were less likely to report struggling with enrollment processes. Yet, in New Orleans, parents were more likely to report problems after the introduction of common enrollment. "

Jean Tirole's Nobel lecture

Jean Tirole - Prize Lecture

Market Failures and Public Policy

New York City high school choice: market design in the NY Times

The NY Times has a nice article on the high school application process, and how it arose, with particular attention to the work that Atila Abdulkadiroglu and Parag Pathak and I did with Neil Dorosin, when he worked for the New York City Department of Education. (We've since worked to help bring school choice to other cities, through IIPSC...)

How Game Theory Helped Improve New York City High School Application Process
By TRACY TULLIS  DEC. 5, 2014

Here's how the article begins:

"Tuesday was the deadline for eighth graders in New York City to submit applications to secure a spot at one of 426 public high schools. After months of school tours and tests, auditions and interviews, 75,000 students have entrusted their choices to a computer program that will arrange their school assignments for the coming year. The weeks of research and deliberation will be reduced to a fraction of a second of mathematical calculation: In just a couple of hours, all the sorting for the Class of 2019 will be finished.

"To middle-school students and their parents, the high-school admissions process is a grueling and universally loathed rite of passage. But as awful as it can be, it used to be much worse. In the late 1990s, for instance, tens of thousands of children were shunted off to schools that had nothing going for them, it seemed, beyond empty desks. The process was so byzantine it appeared nothing short of a Nobel Prize-worthy algorithm could fix it.

"Which is essentially what happened.

"About a decade ago, three economists — Atila Abdulkadiroglu (Duke), Parag Pathak (M.I.T.) and Alvin E. Roth (Stanford), all experts in game theory and market design — were invited to attack the sorting problem together. Their solution was a model of mathematical efficiency and elegance, and it helped earn Professor Roth a Nobel Memorial Prize in Economic Science in 2012.

"Before the redesign, the application process was a mess. Or, as an economist might say, it was an example of a congested market. Each student submitted a wish list of five schools. Some of them would be matched with one of their choices, and thousands — usually the higher-performing ones — would be matched with more than one school, giving them the luxury of choosing. Nearly half of the city’s eighth graders — many of them lower-performing students from poor families — got no match at all. That some received surplus offers while others got none illustrated the market’s fundamental inefficiency.

"Thousands of unlucky teenagers wound up waiting through the summer to get placed, only to be sent to schools they had not listed at all. And those schools, Professor Pathak discovered in a recent analysis, were “worse in all dimensions” — including student achievement, graduation rate and college admissions — than the schools the students had asked to attend."
*********
The article goes on to describe the deferred acceptance algorithm and some other matters. One nice thing about the story is that it makes clear that this was an effort that involved lots of people--not every newspaper account manages to make that point.

I ended up writing about the NYC school project at somewhat greater length in my forthcoming book, which should be coming out in June, if the creeks don't rise.

Students selling seats in popular courses

An Unusual Honor-Code Violation: Students Selling Seats in Popular Courses
(ungated access here: http://www.aacrao.org/resources/resources-detail-view/an-unusual-honor-code-violation--students-selling-seats-in-popular-courses )

"Course registration can be a stressful process on many college campuses, but students at Emory University have channeled their frustration into creative solutions—some more ethical than others.

The university’s stratified registration process gives priority access to students who have earned the most credits, such as seniors and juniors, and students who hold merit scholarships. So crafty students have devised a way to game the system: Those with earlier registration times enroll in courses to save spots for their friends, who arrange to pick up those class spots during the university’s "add-drop-swap" open-enrollment period, in the last weeks of a semester.

Some students even enroll in popular classes to try to sell their spots to others, according to some undergraduates.

"I’ve definitely heard it’s happened," said Priyanka Krishnamurthy, a senior. "I’ve seen Facebook statuses: ‘I’m willing to pay anybody who drops this class.’" In one case, students told a professor, the price for a spot in a prime course, such as a chemistry class or business-school prerequisite, was advertised at $100.

The practice is considered a violation of Emory’s honor code because it confers "unfair academic advantage" on those who have not earned it, according to Joanne Brzinski, senior associate dean for undergraduate education.

Payoffs for class slots have occurred, she said, and have been advertised via social-media posts. But Ms. Brzinski believes there have been only a handful of such cases.

"Quite frankly, that’s the sort of thing we’re more concerned about than anything," she said. "It would mean that students who can afford to pay for courses get an advantage."

Housing markets through thick and thin (and back again)

A paper in the December AER discusses seasonality in the housing market: when the market is thick, better match quality raises prices...


Hot and Cold Seasons in the Housing Market
By L. Rachel Ngai and Silvana Tenreyro

"Every year housing markets in the United Kingdom and the United
States experience systematic above-trend increases in prices and
transactions during the spring and summer (“hot season”) and
below-trend falls during the autumn and winter (“cold season”).
House price seasonality poses a challenge to existing housing models.
We propose a search-and-matching model with thick-market effects.
In thick markets, the quality of matches increases, rising buyers’ willingness
to pay and sellers’ desire to transact. "

I am The Fixer in the IMF's Finance and Development magazine

The Fixer, it turns out, is the title of a profile of me, based on an interview, and on conversations with some of my old and not so old colleagues, published in the IMF's Finance and Development magazine.

(The title makes me think of the Malamud novel, which isn't bad when you recall that the fixer was a handyman...and which is a lot better than thinking of the corrupt politicians who could "fix" your speeding tickets... A handy man is a characterization worth trying to live up to, sort of like Keynes' dentists...)

Repugnant transactions: gradual or radical change?

Policy makers and advocates who wish to relax a ban on some presently repugnant transactions may not always be glad to have the support of those who demand more radical change, since those more radical changes may remind people of just what aroused their repugnance in the first place.

Two examples have showed up in my email stream lately, the first having to do with those who support "death with dignity" and would like physicians to be allowed to help people nearing the end of life to die peacefully. The second comes from the debate about whether the ban on compensating kidney donors should be relaxed.

‘Prophylactic’ Suicide
"Perhaps the moment is right for broaching the idea of what we might call prophylactic suicide: the decision of an elderly person to pre-empt the grim reaper and avoid the disabilities of extended life.

Organizations such as Compassion and Choices, and Final Exit, are campaigning for dignified terminations of life for those with incurable diseases. And with some success, since Oregon, Washington, Vermont and Montana have recently established the right to aid-in-dying. What I propose goes a step further, extending the right to people before they face terminal or debilitating illnesses.

With nearly half of people 85 or older suffering from Alzheimer’s disease, concerns about quality of life in old age are reasonable, even if opinions about what to do about the situation vary widely. However sane prophylactic suicide might be, getting assistance is illegal."


And here's a counterpoint to the cautious proposal by Sally Satel that I blogged about yesterday.

The Kidney Crisis
by Richard A. Epstein
Monday, October 27, 2014

"Recently, a distinguished list of academics signed an open letter to President Barack Obama, Health and Human Services Secretary Sylvia Matthews Burwell, Attorney General Eric Holder, and the leaders of Congress. The letter implored the administration to take prompt and effective steps to end the shortage of organs now available for transplants, especially kidneys. Its signatories announced: “We call for the swift initiation of evidence-based research on ways to offer benefits to organ donors in order to expand the availability of transplants.“

I chose not to sign that letter. It was not because I disagreed with its unhappy diagnosis that the chronic shortage of organs available for transplants, especially kidneys, is inexcusable; on that point, the letter was spot on. Rather, I refused to sign because I believe that the letter’s call to action was hopelessly slow in the face of an unending cascade of unnecessary deaths. If heeded, its call will be the latest in a long series of well-intentioned failed attempts to end the government scourge created by the current ban on kidney sales. This ban was implemented by the National Organ Transplantation Act (“NOTA”) of 1984, sponsored by Senator Orrin Hatch and then-Representative Al Gore. NOTA’s central provision makes it illegal to “acquire, receive, or otherwise transfer” an organ to another person for “valuable consideration,” which with minor exceptions blocks both cash and in-kind payments.

To solve the problem of organ shortages, we must begin by repealing NOTA and implementing a free market for organs. The area in which that voluntary market would work best is for kidneys, both live and cadaveric. Kidneys are the most desperately sought organ. Of the close to 125,000 people now waiting on the Organ Procurement and Transplantation Network, (OPTN) transplant list, more than 100,000 are waiting for kidneys, and the number is rising daily. Relative to transplants of pancreas, livers, hearts, lungs, and intestines, kidney transfers are the easiest to execute, with the greatest benefits to the recipients and the transferors alike.

The open letter reports that we are in a losing battle with kidney shortages. On the supply side, the number of live donations is now down to about 5,700 per year from 6,000 per year some five years ago. Most of those transfers come from family members, where the matches may be less than ideal, and the health of the donor less than perfect. Also on the supply side, the number of accidental deaths of young individuals is down, which cuts off, for the best of reasons, the most desirable source of cadaveric kidneys. On the demand side, better healthcare now allows individuals who suffer from diabetes and kidney disease to live long enough so that they will actually need dialysis or other treatment.

The ability to get organ donations from strangers is very small even though the net benefits are enormous. The mortality risk to the donor is in the order of 3 parts in 10,000. The extra life to the recipient of a live kidney is in the order of 15 to 20 years. (That figure is far greater than the gains from a cadaveric kidney, whose condition is likely to be degraded at the time of death, and to deteriorate thereafter in the interval needed to complete transplantation, if consent can be obtained in time from grieving relatives.) The gains to recipients of a live transaction, if monetized, could easily exceed one, even two, million dollars, at a total cost that is below $100,000 per donor, which includes personal discomfort, loss of work time, and family dislocations. But altruism does not work well when donors have to incur uncompensated losses of that size. Unfortunately, the huge potential for gains from trade is blocked by the firm NOTA prohibition against organ sales.

The open letter does not refer to those gains from trade. It in fact criticizes them. “To ensure equality,” it reads, “private transactions between individuals should remain prohibited.” The letter then seeks to accomplish the impossible by endorsing a centralized approach administered by the United Network for Organ Sharing (UNOS). This nonprofit organization was founded in 1984, when the risks of kidney transplants were greater and the waiting lists far shorter than the 4.3 years of today. This is up from 2.8 years only five years ago. If UNOS remains in charge, the waiting times will continue to grow.

On the positive side, the letter proposes a set of possible healthcare experiments that might involve the provision of in-kind compensation to potential donors that could cover life-long health and disability insurance and funereal benefits. These could, in principle, be supplemented by “a pension contribution, tax credit, or charitable contribution.” Unfortunately, the letter frets so much about the downsides of improvident kidney transfers that it accepts a set of procedural limitations that doom the experiment. New experimental programs, doubtless subject to extensive internal oversight, have to meet as-yet unspecified standards on informed consent, psychological tests, and of course long wait periods before the donation can take place.

The simplest objection to this program is that it is too little and too late to dent the shortage. Any government experiment will take years first to debate and then to perform. Thereafter further delays will be incurred in trying to make sense of fragmentary data. Any pilot programs will prove yet again that justice delayed is justice denied, especially for the thousands of individuals who die in the interim.

It’s important to realize that any short-term experimental approach cuts out some indispensable benefits that only open markets can supply. The basic logic of a market is that it allows people to match up with others in order to secure gains from trade, which, as noted above, are huge for potential live kidney transplants. But kidney markets are difficult to organize because real gaps in information plague both sides of the market. After all, kidney transplants take place only once for any live kidney donor, and rarely more than twice for any kidney recipient. In one sense, these markets are even more difficult to crack than real estate markets, which exhibit a similar pattern of low-frequency and high-value transactions.

To navigate these markets, it is therefore critically necessary for third party intermediates to add their reputational bond and transactional skills to assure, as brokers, both buyers and sellers (no more donors, as it were) that the transaction will go as scheduled. And, no, there is no need for the government to supply these intermediates. The market forces that generate brokers for real estate could work here, where customers on both sides of the market enjoy full legal protections against bad performance, "

Compensation for kidney donors? Background, and Sally Satel's proposal

From the Washington Post, a post that frames the current debate about whether the legal ban on compensating organ donors should be revisited, followed by an interview with Sally Satel.

An organ shortage kills 30 Americans every day. Is it time to pay donors?  By Keith Humphreys.

"Thirty years ago this week, President Reagan signed the National Organ Transplant Act (NOTA), which established the federal legal framework for the procurement, donation and transplantation of organs needed by desperately ill Americans. The law’s advocates hoped that it would end organ shortages, but today over 120,000 Americans are on waiting lists. With the need for organs – especially kidneys -- projected to outstrip supply even more in coming years, intense debate has broken out over whether NOTA should be amended to allow funding of incentives for donors.

The interests at stake are colossal. About 30 Americans a day either die on the waiting list or are removed from it because they have become too ill to receive a transplant. Taxpayers also bear a significant burden in the case of kidneys because of the special status of renal dialysis within the Medicare program. In 1972, Congress mandated that Medicare cover the costs of care for end stage renal disease regardless of patient age. In 2011, over 500,000 people took advantage of this benefit at a cost of over $34 billion, which is more than 6% of Medicare’s entire budget.

One commonly proposed solution to the organ shortage derives from behavioral economic “nudge” principles. Rather than requiring Americans to complete paperwork in order to opt-in to donation at death, the country could shift to the European model of presuming that donation at death was acceptable. But Tom Mone, chief executive of OneLegacy, the nation’s largest organ and tissue recovery organization, points out that “The recovery rate for deceased donors in the United States is actually better than that of European nations with presumed consent laws. "
...
"In any event, because less than 1% of deceased individuals are medically eligible to donate organs, and 75% of this group in the United States in fact does so, there simply isn’t enough “there there” to remedy the shortage with improved recovery from deceased donors.

This brings up the currently illegal option of providing incentives for living donors. NOTA’s main Capitol Hill champion, a then little-known Congressman Al Gore Jr., allowed for the possibility of rewarding donors if the purely altruism-driven donation system did not keep up with demand. Today, one of the leading exponents of this idea is Dr. Sally Satel, a resident scholar at the American Enterprise Institute. Sally recently participated in a forum on organ donation at Stanford Medical School, after which I interviewed her regarding her proposal to incentivize kidney donation. Below is an edited transcript of our discussion.

Keith Humphreys: What kind of incentives would you envision being tested and who would provide them?

Sally Satel: Donor enrichment would need to begin as a pilot trial. No one is talking about a traditional free market or private contract system. No organ “sales.” And no large lump sum of cash to donors. Those of us who want to test the power of incentives to increase the number of people receiving kidney transplants – and it is a rich network of transplant surgeons, nephrologists, legal scholars, economists, and bioethicists – envision a system where every needy patient, not just the financially well-off, can benefit.

Here is one model: a governmental entity, or a designated charity, would offer in-kind rewards, like a contribution to the donor’s retirement fund, an income tax credit or a tuition voucher, or a gift to a charity designated by the donor. Because a third party provides the reward, all patients, not just the financially secure, will benefit.

Meanwhile, imposing a waiting period of at least six months would ensure that donors didn’t act impulsively and that they were giving fully informed consent. Prospective compensated donors would be carefully screened for physical and emotional health, as is done for all donors now. The use of in-kind benefits coupled with a waiting period would screen out financially desperate individuals who might otherwise rush to donate for a large sum of instant cash and later regret it.
The donors’ kidneys would be distributed to people on the waiting list, according to the rules now in place. People who wanted to donate a kidney to a specific person — say, a father to a son — would still be able to, outside this system. Finally, all rewarded donors would be guaranteed follow-up medical care for any complications, which is not ensured now.

Kidney sales proposal in 1983, and the origin of the 1984 National Organ Transplant Act (history)

Dr. David Cohen at the NewYork-Presbyterian Hospital/Columbia University Medical Center Renal and Pancreatic Transplant Program recently shared with me the 1983 letter, below, that was received at Presbyterian Hospital from Dr Barry Jacobs, who proposed to purchase kidneys for transplantation, and was looking to enlist partner hospitals.

You should be able to click on the letter to enlarge it. The stamp is a bulk mail stamp (for 10.9 cents), which suggests that this letter was sent to many hospitals.

The letter states that there were 70,000 Americans with end stage renal disease in 1983, and a shortage of organs. Today those numbers are much higher.

I notice that the name of the proposed venture was International Kidney Exchange, Ltd.  The name "kidney exchange" has of course since come to mean something very different--the in kind exchange of kidneys without any money changing hands--although it is also often called "kidney paired donation," perhaps out of a lingering repugnance to the name as well as the idea.

And below is a story that ran in the NY Times at the time. Apparently Dr. Jacobs was not a model citizen: prior to making this proposal his license had been revoked and he had spent time in prison. This may have helped to make his proposal repugnant, and it was outlawed the following year, in the 1984 NOTA, which stated in part:
"TITLE 111-PROHIBITION OF ORGAN PURCHASES
SEC. 301. (a) It shall be unlawful for any person to knowingly acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce.
(b) Any person who violates subsection (a) shall be fined not more
than $50,000 or imprisoned not more than five years, or both. "

The act has since been amended to read
(a) Prohibition

It shall be unlawful for any person to knowingly acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce. The preceding sentence does not apply with respect to human organ paired donation.

Here's the NY Times story.

BUYING OF KIDNEYS OF POOR ATTACKED

By WALTER SULLIVAN  Published: September 24, 1983

"A plan to purchase kidneys from living donors, primarily the indigent, for sale to people needing transplants and able to afford them drew strong opposition yesterday on ethical and medical grounds from officials of the National Kidney Foundation.

¶A Virginia physician, Dr. H. Barry Jacobs, has formed an organization, International Kidney Exchange, to purchase and market the kidneys. Some of the kidneys would be purchased from people living in underdeveloped countries.

¶''It is immoral and unethical,'' said Dr. David A. Ogden, president of the foundation, ''to place a living person at risk of surgical complication and even death for a cash payment to that person.'' To do so, he said at a news conference in Manhattan, ''would make a travesty of informed consent, by introducing the temptation and bias of a cash award for consent.''

¶Furthermore, he and other specialists in kidney transplantation said the plan could not be justified medically. They asserted that the success rate in transplanting kidneys from cadavers was just as high as from donors with no blood relationship to the recipient. Contrast in Success Rates

¶Where a living donor and the recipient, being closely related, carry a relatively high percentage of similar genes, the rate at which the organ is rejected by the body's immune system is about 10 percent, according to the foundation. Where the kidney came from a cadaver the rate is 40 to 50 percent.

¶Another risk in purchasing kidneys cited by the physicians was uncertainty as to the medical history of the donor. Situations were also forseen in which parents in search of funds would consent to kidney removal from one or more of their children.

¶Dr. Jacobs, in a telephone interview last night at his office in Reston, Va., responded that 70,000 Americans were dependent on dialysis machines, which substitute for kidney function. Yet, he said, there were only enough kidney donors for a little more than 5,000 patients last year.

¶''How are they going to fill the gap?'' he asked. He also said the danger of infection in a cadaver kidney was ''slightly higher'' than that in a kidney from a living donor. He said the risk to the kidney donor was less than that from a hysterectomy, a relatively common operation involving the removal of all or part of the uterus.

¶Asserting that the voluntary approach had not produced the needed kidneys, he asked rhetorically: ''Where is the wind blowing? It is the money wind.'' License Was Revoked

¶In 1977 Dr. Jacobs's license to practice medicine in Virginia was revoked after he was convicted of mail fraud in a case related to Medicare billing, and he spent 10 months in jail.

¶Kidney foundation officials said there appeared to be no legal method to prevent Dr. Jacobs from buying, importing and selling the human organs.

¶They cited several moves to outlaw the sale of human organs and to promote their equitable allocation.

¶Senator Edward M. Kennedy, Democrat of Massachusetts, has introduced a bill that would establish a study group to explore the possibility of establishing a national system for organ procurement. In the House, Albert Gore Jr., Democrat of Tennessee, has introduced a bill that would outlaw the sale of such organs.

¶Foundation officials agreed there was a shortage of kidneys available for transplant. In 1982 more than 10,000 Americans were waiting for kidneys and only 5,358 transplants were performed."

Experiments as repugnant transactions (if subjects are paid)

Here's a paper that reports a survey of IRB members on whether payments to experimental subjects are coercive. (The focus was on medical trials...)

MONEY, COERCION, AND UNDUE INDUCEMENT: A SURVEY OF ATTITUDES ABOUT PAYMENTS TO RESEARCH PARTICIPANTS
by Emily A. Largent, BSN, Christine Grady, PhD, RN, Franklin G. Miller, PhD, and Alan Wertheimer, PhD, IRB. 2012 Jan-Feb; 34(1): 1–8.

"Nearly all agreed or strongly agreed with the statement that subjects are coerced if they are threatened with harm for not participating (91%). The majority also agreed that participants are coerced if the offer of payment makes them participate when they otherwise would not (65%), or when the offer of payment causes them to feel that they have no reasonable alternative but to participate (82%). Women tended to agree more than men (p = 0.03) that participants are coerced if the payment offer makes them participate when they otherwise would not. No other trends were observed by gender, education, or IRB membership. Most respondents agreed that payment offers are an undue influence if they cause participants to participate when they otherwise would not (81%), if a participant perceives he has no reasonable alternative but to participate (79%), or if the payment offer distorts participants’ evaluation of risks and benefits (98%). "


HT: Debra Satz

Simons Institute at Berkeley: semester on Economics and Computation

Noam Nisan writes

Simons Semester on Economics and Computation

November 21, 2014 by Noam Nisan

The Simons institute at Berkeley will be having a semester on Economics and Computation in Fall 2015 (Aug 19 – Dec 18, 2015).

The Simons institute is awarding research fellowships for participation in this semester!   These Fellowships are intended for “exceptional young scientists (within at most six years of the award of their PhD at the start of academic year 2015-16)”. In addition, the Institute co-hosts joint fellowships in which a fellow spends a period (typically one semester) as a Simons-Berkeley Fellow and is also appointed to a postdoctoral position at a partner institution.

The deadline for applications is near: December 15, 2014.

Judging from past semesters (on other topics), this is going to be the place to be for researchers in the area during that semester

Kidney exchange in Australia passes the 100 transplant mark

"In September the Paired Kidney Exchange Program reached the milestone of 100 transplants."

Here's the story, focused on a six-way chain:
Six-way kidney transplant boosts altruistic donor rates
by Lucie Van Den Berg, Herald Sun, November 22, 2014

Bride price and the education of brides

Here's a new paper that casts bride price in a somewhat different light, with data from Indonesia and Zambia suggesting that girls who grow up in communities with bride price receive more education than those who grow up in similar communities that don't have bride price:


Bride Price and the Returns to Education, by Nava Ashraf, Natalie Bau, Nathan Nunn, and  Alessandra Voena.  November 16, 2014

Abstract:

ABSTRACT
Traditional cultural practices can play an important role in development, but can also inspire condemnation. The custom of bride price, prevalent throughout sub-Saharan Africa and in parts of Asia as a payment of the groom to the family of the bride, is one example. In this paper, we show a surprising economic consequence of this practice. We revisit one of the best-studied historical development projects, the INPRES school construction program in Indonesia, and show that previously found null results on female enrollment mask heterogeneity by bride price tradition. Ethnic groups that traditionally engage in bride price payments at marriage increased female enrollment in response to the program. Within these ethnic groups, higher female education at marriage is associated with a higher bride price payment received, providing a greater incentive for parents to invest in girls' education and take advantage of the increased supply of schools. For those girls belonging to ethnic groups that do not practice bride price, we see no increase in education following school construction. We replicate these same findings in Zambia, where we exploit a similar school expansion program that took place in the early 2000s. While there may be significant downsides to a bride price tradition, our results suggest that any change to this cultural custom should likely be considered alongside additional policies to promote female education.

Job market for new Ph.d. economists

A recent NBER working paper discusses the job market for economists:

IS IT ALL WORTH IT? THE EXPERIENCES OF NEW PHDS ON THE JOB MARKET, 2007-2010
Brooke Helppie McFall
Marta Murray-Close
Robert J. Willis
Uniko Chen
Working Paper 20654
http://www.nber.org/papers/w20654
November 2014


ABSTRACT
This paper describes the job market experiences of new PhD economists, 2007-10. Using information from PhD programs' job candidate websites and original surveys, the authors present information about job candidates' characteristics, preferences and expectations; how job candidates fared at each stage of the market; and predictors of outcomes at each stage. Some information presented in this paper updates findings of prior studies. However, design features of the data used in this paper may result in more generalizable findings. This paper is unique in comparing pre-market expectations and preferences with post-market outcomes on the new PhD job market. It shows that outcomes tend to align with pre-market preferences, and candidates' expectations are somewhat predictive of their outcomes. Several analyses also shed light on sub-group differences.

some interesting paragraphs:

"During the job-market seasons covered by this study, job candidates submitted 107 applications, completed 17 interviews and 6 fly-outs, and received 3 job offers on average. Our findings show a dramatic increase in applications compared to List (2000), who found the average job seeker in his convenience sample had scheduled just seven interviews prior to the AEA meetings in 1997.xvii It is likely that the decreased cost of finding openings and submitting applications associated with of the growth of internet job listings and web-based applications have changed norms since the late 1990s. "(p9)

"Positions in business and industry tend to be the highest paid, at $110,100 on average, while postdoctoral fellowships, the lowest-paid category, average just $57,500. The average salary for a four-year college position is $72,400, while the average new assistant professor’s salary at a university is $96,500 per year. " (p16)

Jacob Lavee on preventing transplant tourism, in the birthplace of transplantation

Jacob Lavee, about whom I've written numerous posts, was just in Boston as the 8th Annual Joseph E. Murray Visiting Professor in Transplant Surgery, to speak about "Preventing transplant tourism: A personal voyage which shaped the Organ Transplant Law in Israel."

A new market for blog posts?

Kim Krawiec is on top of the taboo trades game, and has some new ones to suggest: I particularly like the idea that if you have some fact that requires a citation, maybe we could arrange that...

Selling The Starred Footnote

I’m late to the game in blogging about this, but I just found out about it on Friday at a conference on the Ethical Limits of Markets hosted by the Institute For The Study of Markets and Ethics at Georgetown University’s McDonough School of Business (about which I’ll have more to say later).  Jason Brennan and Peter Jaworski are selling acknowledgements in the preface of their book Markets without Limits, which will be published by Routledge Press, most likely in late 2015 or early 2016.

The book answers the question “Are there some things which you permissibly may possess, use, and give away, but which are wrong to buy and sell?” in the negative, in contrast to the numerous books already written on the topic which take the contrary position.  Brennan and Jaworski are selling three tiers of acknowledgements: Silvermint Tier, Platinum Tier, and Gold Tier (The Silvermint Tier is so named because philosophy and women’s studies professorDaniel Silvermint is paying to have the highest tier named after him.)

Wish I had thought of that!  But no reason I can’t adopt it going forward.  In addition, I’ve decided to sell links to and mentions of your work in my blog posts and tweets.  I’m still working out the exact fee schedule, but will charge extra for highly positive mentions and even more for highly negative mentions (as controversy is always an attention getter). Finally, if those pesky law review editors won’t stop bothering you for support that you can’t find, just let me know and I’ll sell you a blog post setting out the needed statements, to which you can then cite. 

We often complain that student editors demand support for obviously correct statements of common knowledge – indeed, it is sometimes the case that the proposition is so widely known and accepted that it is difficult to find discussion of the point in print.  For example, you may want to reference the uncontroversial view that “professors of market regulation are considered smarter and more interesting than professors of constitutional law,” yet struggle to find something in print to that effect (in contrast to the faculty lounge and hallway conversations in which this assertion is frequently found). Problem solved!  Just let me know the statements for which you need a citation and I’ll post them here for a fee.  The profit possibilities on this one are nearly endless. 

Stanford Engineering Hero Lecture: Ken Arrow on his intellectual history and the history of Operations Research (video)

I've had occasion to think about Operations Research recently, and it's relationships with Economics.  Here's Ken Arrow recalling some early history.



Ken speaks about his intellectual history, and the history of Operations Research as a field and at Stanford. The question and answers at the end are a lot of fun too.

Ken's talk begins at around 7:30 of the video, after an introduction.
The occasion is the March 4, 2014 celebration of Ken as an Engineering Hero. 

on my reading list (but not yet read)--recent papers on school choice, resident matching, and kidney exchange

Inefficient School Choice in a Long-Run Urban Equilibrium

Ulrich Kamecke 

Humboldt University of Berlin - Faculty of Economics
September 29, 2014

CESifo Working Paper Series No. 4969 
Abstract:      

We model centralized school matching as a second stage of a simple Tiebout-model and show that the two most discussed mechanisms, the deferred acceptance and the Boston algorithm, both produce inefficient outcomes and that the Boston mechanism is more efficient than deferred acceptance. This advantage vanishes if the participants get to know their priorities before they submit their preferences. Moreover, the mechanism creates artificial social segregation at the cost of the disadvantaged if the school priorities are based on ex ante known (social) differences of the applicants.

The History and Rationale of the American Urological Association Residency Matching Program

Steven J. Weissbart, 

Jeffrey A. Stock

A new perspective on Kesten's school choice with consent idea ^☆

• Qianfeng Tang^, , 
• Jingsheng Yu 

Abstract We revisit the school choice problem with consent proposed by Kesten [12], which seeks to improve the efficiency of the student-optimal deferred acceptance algorithm (DA) by obtaining students' consent to give up their priorities. We observe that for students to consent, we should use their consent only when their assignments are Pareto unimprovable. Inspired by this perspective, we propose a new algorithm which iteratively reruns DA after removing students who have been matched with underdemanded schools, together with their assignments. While this algorithm is outcome equivalent to Kesten's EADAM, it is more accessible to practitioners due to its computational simplicity and transparency on consenting incentives. We also adapt this algorithm for school choice problems with weak priorities to simplify the stable improvement cycles algorithm proposed by Erdil and Ergin [8].

Kidney Exchange with Long Chains: An Efficient Pricing Algorithm for Clearing Barter Exchanges with Branch-and-Price

Kristiaan M. Glorie
Econometric Institute, Erasmus University Rotterdam, 3000 DR Rotterdam, The Netherlands
glorie@ese.eur.nl,

J. Joris van de Klundert
Institute of Health Policy and Management, Erasmus University Rotterdam, 3000 DR Rotterdam, The Netherlands
vandeklundert@bmg.eur.nl,

Albert P. M. Wagelmans
Econometric Institute, Erasmus University Rotterdam, 3000 DR Rotterdam, The Netherlands
wagelmans@ese.eur.nl

Abstract Barter exchange markets are markets in which agents seek to directly trade their goods with each other. Exchanges occur in cycles or in chains in which each agent gives a good to the next agent. Kidney exchange is an important type of barter exchange market that allows incompatible patient–donor pairs to exchange kidneys so the involved patients can receive a transplant. The clearing problem is to find an allocation of donors to patients that is optimal with respect to multiple criteria. To achieve the best possible score on all criteria, long cycles and chains are often needed, particularly when there are many hard-to-match patients. In this paper we show why this may pose difficulties for existing approaches to the optimization of kidney exchanges. We then present a generic iterative branch-and-price algorithm that can deal effectively with multiple criteria, and we show how the pricing problem may be solved in polynomial time for a general class of criteria. Our algorithm is effective even for large, realistic patient–donor pools. Our approach and its effects are demonstrated by using simulations with kidney exchange data from the Netherlands and the United States.

Mini course in market design: video of the short course (4 lectures) I gave in Brazil

Here is the link to lecture 1 of 4, with links to the other three lectures as well.

IWGTS 2014 - Mini-course: Market Design

These lectures were delivered as part of the  Conference on game theory in honor of Marilda Sotomayor: July 2014.

Pope Francis on euthanasia and in vitro fertilization

In connection with recent developments concerning medically assisted suicide/death with dignity, the Catholic Church has strongly reaffirmed its opposition to that and other repugnant transactions, particularly involving reproduction.

Pope Francis denounces euthanasia as 'sin against God'. The Pope strongly condemns the 'right to die' movement, and warns against abortion, IVF and stem cell research

"Pope Francis denounced the right to die movement on Saturday, saying that euthanasia is a sin against God and creation.

"The Latin American pontiff said it was a “false sense of compassion” to consider euthanasia as an act of dignity.

"Earlier this month, the Vatican’s top bioethics official condemned as “reprehensible” the death by assisted suicide of a 29-year-old American woman, Brittany Maynard, who was suffering terminal brain cancer and said she wanted to die with dignity.

“This woman (took her own life) thinking she would die with dignity, but this is the error,” said Monsignor Ignacio Carrasco de Paula, the head of the Pontifical Academy for Life.

“Suicide is ... a bad thing because it is saying no to life and to everything it means with respect to our mission in the world and towards those around us,” he said, describing assisted suicide as “an absurdity”.
...
"The Pope also condemned in vitro fertilization, describing it as “the scientific production of a child” and embryonic stem cell research, which he said amounted to “using human beings as laboratory experiments to presumably save others.”

“This is playing with life,” he said. “Beware, because this is a sin against the creator, against God the creator.”

"The Pope considers the assisted suicide movement as a symptom of a contemporary “throw-away culture” that views the sick and elderly as a drain on society.

"Francis urged doctors to take “courageous and against-the-grain” decisions to uphold church teaching on the dignity of life."

Congestion and signaling in college admissions

The college application season is approaching, and Ariel Kaminer in the NY Times notes the stress and congestion: Applications by the Dozen, as Anxious Seniors Hedge College Bets

"For members of the class of 2015 who are looking at more competitive colleges, their overtaxed counselors say, 10 applications is now commonplace; 20 is taking on a familiar ring; even 30 is not beyond imagining. And why stop there?
...
"A spokeswoman for Naviance, an online tool that many high school students and their counselors use to keep track of applications, said one current user’s “colleges I’m applying to” tab already included 60 institutions. Last year the record was 86, she said.

"A number of factors have contributed to this rapid escalation.

"One is the growing popularity of the Common Application, a standardized form that more than 500 colleges now honor, making the process of applying to multiple institutions far easier. Another is the tough economy, which drives students to look ever farther afield for a college that can meet their financial aid needs.

"But perhaps the most pressing factor has been plain old fear.

“Every year the story is that college is harder to get into, so kids panic and think they have to apply to more places,” said Jim Jump, academic dean and director of guidance at St. Christopher’s School in Richmond, Va. The resulting surfeit of applications drives acceptance rates down even further, making the next year’s high school seniors even more panicked.
...
"According to the National Association for College Admission Counseling, in 1990 just 9 percent of students applied to seven or more colleges. By 2011, the year of its most recent survey, that group had risen to 29 percent.

"In the class of 2014, according to Naviance, 16.5 percent of seniors using the system said they intended to apply to 11 to 20 colleges. (Naviance did not have figures on how many applications were actually filed.)
...
"But the most compelling reason not to apply to dozens of colleges, counselors say, is that more applications do not necessarily mean better odds. “It’s not like the lottery,” said Michael Carter of St. Stephen’s & St. Agnes School in Alexandria, Va.

"Ms. Sohmer said she had found that when students file 20 or more applications, “they’ve loaded on lots of ultracompetitive schools, so their list becomes disproportionately top-heavy. Or they throw in lots of schools at the end where they’re overqualified.” A far better way to increase one’s chances, she and many others agree, is to come up with a manageable but carefully selected list of schools and get serious about them.
...
"As a result, many colleges have begun emphasizing “demonstrated interest” — tiny but telling indications of how badly students want to attend. “If they’re within a reasonable distance of the campus, did they visit?” asks Patrick O’Connor, associate dean of college counseling at the Cranbrook Kingswood Upper School in Bloomfield Hills, Mich. “Did they attend a college night and fill out a card? Have they contacted a rep to ask some legitimate questions?”

Who Gets What--And Why: The New Economics of Matching and Market Design

I finally finished my book on market design for a general audience:) (except for copy editing and galleys which are still to come...) The publication date (at the moment) is June 2...

Coming in June, my book :

Here's the publisher's blurb:
A Nobel laureate reveals the often surprising rules that govern a vast array of activities — both mundane and life-changing — in which money may play little or no role.

If you’ve ever sought a job or hired someone, applied to college or guided your child into a good kindergarten, asked someone out on a date or been asked out, you’ve participated in a kind of market. Most of the study of economics deals with commodity markets, where the price of a good connects sellers and buyers. But what about other kinds of “goods,” like a spot in the Yale freshman class or a position at Google? This is the territory of matching markets, where “sellers” and “buyers” must choose each other, and price isn’t the only factor determining who gets what.

Alvin E. Roth is one of the world’s leading experts on matching markets. He has even designed several of them, including the exchange that places medical students in residencies and the system that increases the number of kidney transplants by better matching donors to patients. In Who Gets What — And Why, Roth reveals the matching markets hidden around us and shows how to recognize a good match and make smarter, more confident decisions.

Matching and market design at the SAET conference in 2015 in Cambridge, UK

Fuhito Kojima writes:

I'm organizing a session at SAET conference 2015;

http://www.saet.uiowa.edu/2015/

and I'm wondering if you could spread the word through your blog, if you have a slot for an entry.

I am planning a session on matching and market design, and have two slots for presentations left.

Thanks a lot in advance!

Best,

Fuhito

Society for the Advancement of Economic Theory

15th SAET Conference on Current Trends in Economics
University of Cambridge, UK, July 27-31, 2015

The 15th Annual SAET Conference will be held July 27-31, 2015 at the University of Cambridge, UK.

Why some people don't register as deceased organ donors

In The Atlantic, Tiffanie Wen reports: Why Don't People Want to Donate Their Organs?


" In the United States alone, 21 people die everyday waiting for an organ transplant. Though about 45 percent of American adults are registered organ donors, it varies widely by state. More than 80 percent of adults in Alaska were registered donors in 2012, compared to only 12.7 percent in New York, for example. In New York alone, there are more than 10,000 people currently waiting for organ transplants. According to data compiled by the Organ Procurement and Transplantation Network, more than 500 people died in New York last year, waiting for an organ to become available.

"Given this shortage of organs, why don’t more people donate?

"It’s a touchy question, something non-donors aren’t necessarily keen to answer. But experts say there is a large disparity between the number of people who say that they support organ donation in theory and the number of people who actually register. In the U.K., for example, more than 90 percent of people say they support organ donation in opinion polls, but less than one-third are registered donors. What keeps well-intentioned people from ultimately donating is something that academics, doctors, and organ-donation activists are trying to figure out.

"In a recent literature review, researchers at the University of Geneva examined several social and psychological reasons why people choose not to donate, either by not registering as an organ donor during their lives, or electing not to donate the organs of their next of kin.

"The study cites mistrust in the medical field and lack of understanding about brain death as major barriers to donation. A 2002 study in Australia, for example, illustrates the controversy surrounding brain death. Some participants indicated that they wouldn’t donate the organs of their next of kin if his or her heart were still beating, even if they were proclaimed brain-dead.

"Studies have also shown that the less people trust medical professionals, the less likely they are to donate. The mistrust can come from personal experience—one study in New York showed, for example, that next of kin who perceived a lower quality of care during a loved one’s final days were less likely to consent to donation—or from misconceptions about how the medical community treats registered organ donors.

“There are a lot of people who subscribe to the belief that if a doctor knows you are a registered donor, they won’t do everything they can to save your life,” says Brian Quick, an associate professor of communication at the University of Illinois."


HT: Zeeshan Butt

Matchmakers for religious schools in Israel

Assaf Romm writes

"The following article in Hebrew tells the story of the Haredi (ultra orthodox jewish) "yeshiva ktana" (=~ elementary school) students and the way they get accepted into "yeshiva gdola" (=~ high school):

http://www.ynet.co.il/articles/0,7340,L-4587559,00.html

The interesting parts are that there are many-to-one matchmakers that make a lot of money by cutting deals between students and high schools, and between elementary schools and high schools. For example, a deal can be getting a group of students from the same elementary school in which there are 12 excellent students and 3 mediocre students to an excellent high school, or paying the matchmaker certain amount of money for convincing excellent students to come to a certain high school. There are also reports of some of the students joining in by going to the matchmakers/elementary school teachers and asking to share the profit. Finally, there are also some mentions of unraveling, and an agreement to not start recruiting students before a certain date.

My thoughts about this: a centralized computer system might not be a good idea in this case, because of this population's complete mistrust in technology, because there isn't any centralized organization that governs all these activities, and because the transfers may make it very hard to achieve near-strategyproofness for both sides, which could be extremely important here."

Repugnant transactions: the right to say "God" in Malay

Thomas Fuller has the story in the NY Times: The Right to Say ‘God’ Divides a Diverse Nation

This is one of those stories whose URL is more informative than the headline:
http://www.nytimes.com/2014/11/04/world/asia/in-malaysia-allah-is-reserved-for-muslims-only.html

"According to a series of government orders and rulings by Malaysia’s Islamic councils, the word for God in the Malay language — “Allah” — is reserved for Muslims. Malay-language Bibles are banned everywhere except inside churches. State regulations ban a list of words, including Allah, in any non-Muslim context."

Interview on market design

Here's an interview I did with a British financial reporter, Vikas Shah: Is It Time to Re-Design our Markets?

More on Nimrod Megiddo winning the INFORMS von Neumann Theory Prize

Here's the citation for Nimrod Megiddo winning the John von Neumann Theory Prize

John von Neumann Theory Prize

2014 Winner(s): Nimrod Megiddo, IBM

Citation:

Of all of the areas in which he has worked, Megiddo has had perhaps the most profound impact on the theory of linear programming. His work on the probabilistic analysis of the simplex method, alone and with Adler, established some of the most important results in the area, including the best (quadratic) bound for the complexity of a complete parametric pivoting method and an explanation of why this is possible for the lexicographic version but not the standard Lemke perturbation. He also established a quadratic lower bound for this method. This, along with work of Smale, Borgwardt, and Haimovich, together with independent proofs of the quadratic result by Adler-Karp-Shamir and Todd provided the first theoretical justification for the success of the simplex method. 

Megiddo was an early leader in the theory of interior-point methods, and laid the framework for the development of primal-dual methods in his seminal paper on pathways to the solution. This paper was the foundation for the hugely successful primal-dual interior-point methodology for linear programming, implementations of which are now included in every serious software package. His contributions to interior-point methods culminated in his work on the linear complementarity problem with Kojima and Noma. 

Megiddo’s work has also played a role in highlighting the question, still unresolved today, of whether there is a strongly polynomial algorithm for linear programming. Megiddo made two strikingly beautiful contributions in the design of strongly polynomial algorithms: his innovative multi-dimensional searching technique that yielded a strongly polynomial algorithm for linear programming in constant dimensions, and its forerunner in parametric search algorithms, which showed how to leverage an algorithm to optimize a linear objective into a corresponding strongly polynomial algorithm to optimize a rational objective function over the same feasible region. 

In algorithmic game theory, Megiddo has done groundbreaking work that anticipated by two decades the more recent blossoming of the field. In particular, Megiddo raised the question of the complexity of equilibrium computation in the 80’s and showed that the usual notion of NPhardness is not adequate to capture the apparent difficulty of the problem, anticipating and opening the way to subsequent developments in the area. On the algorithmic side, his later work (with Kholler and von Stengel) also showed how equilibrium solutions for 2-person games can be computed in polynomial time, even if the game were given in extensive form. Bridging between concepts in game theory and traditional combinatorial optimization, Megiddo initiated the investigation of computing fair flows in networks, and did path-setting work on efficient algorithms to compute the fair allocation of costs in a number of game-theoretic settings. 

In summary, Nimrod Megiddo has made fundamental contributions across a broad range of areas of operations research and management science, most notably in linear programming, combinatorial optimization, and algorithmic game theory. His work has been highly influential, in both identifying key concepts and in developing new algorithmic approaches for fundamental problems.