Three takeaways on Moral Economics, with Lynn Thoman

 Lynn Thoman and I discuss three takeaways from Moral Economics (and hers are different than mine):

 You can listen here:

Why Doing the “Right Thing” Can Make Everything Worse 

 and you can watch as well as listen here:

"What can we do when doing the morally “right” thing produces worse outcomes?

And what if some of society’s strongest moral instincts are preventing us from solving problems we all agree are terrible?

Alvin Roth is a Stanford professor and Nobel Prize-winning economist whose work has helped redesign real-world systems, including kidney exchanges and the way doctors are matched with hospitals. His new book, Moral Economics, tackles a harder category of problems: markets and behaviors we find morally objectionable, even when banning them may create consequences we don’t want.

He discusses:

    Why nearly 100,000 Americans can be waiting for a kidney 

    What prohibitions of alcohol and heroin can teach us 

    What happened when Rhode Island accidentally legalized indoor prostitution

    Whether paying kidney donors could save lives without creating an ethically unacceptable market

    Why evidence becomes especially important when reasonable people disagree about morality

    Whether performance-enhancing drugs could eventually become as ordinary as coffee

Some policies sound obviously right when judged by their intentions. But what happens when you judge them by their actual consequences?

Roth pushes into the uncomfortable territory between those two questions: when banning something creates a black market, when changing a rule may save more lives than inventing a new technology, and what we should do when the outcome we believe is morally necessary turns out to be something we cannot actually achieve."

Market design from the Perspective of Theological Anthropology, by Christina McRorie (in the January 2027 ASSA program)

I'm always on the lookout for different perspectives on market design, and here's a paper that caught my eye in the  ASSA Preliminary Program for the January 2027 meetings in Washington DC.

 It's in a session called  What Economic Models Can and Cannot See: Human Flourishing, Freedom, and the Common Good (B4)  Hosted by the Association of Christian Economists 

Can Market Design Make Us More Free? Some Notes on the Use of Experimental Economics from the Perspective of Theological Anthropology  by Christina McRorie, Boston College 

Abstract
Although modern thought tends to construe freedom as freedom from constraint or freedom of choice, Catholic theological anthropology has long defined true freedom as the state of being agentially oriented toward the good. As Servais Pinckaers puts it, it is “freedom for,” rather than “freedom from”—specifically, freedom for living in a Christ-like way, which becomes possible as we come to participate in Christ’s character. This perspective suggests that social influences which encourage our growth in character are not only helping us become more good, but also more free. Moreover, because this conception of freedom is not based in autonomy, this remains true even if these formative influences are not chosen by us, and work on us without our awareness.
Using this concept of freedom, this paper considers the theological implications of experimental research on prosocial behavior in markets. It appears that certain conditions encourage subjects to act with more fairness, trustworthiness, and even generosity than they might under other conditions. (E.g., when market participants can observe each other’s behavior and communicate, and when the social framing of various options emphasizes values, or at least does not emphasize competition or the threat of loss, among other factors.) Insofar as laboratory studies replicate conditions present in actual markets, this indicates that some real markets elicit more moral behaviors than others.
Moreover, because virtue theory assumes that character is built through repeated moral action, markets which encourage individuals to act in prosocial ways can be read as supporting their growth in virtue, insofar as these elicited actions eventually influence individuals’ dispositions and habits. To the extent that this occurs, this paper proposes that good market design can encourage us to become more good, and thus more free. 

This Land is My Brand: From Woody Guthrie to DJ Trump

 President Trump's renaming* of Lake Ontario got me thinking about the famous song by Woody Guthrie, This Land Is Your Land. Its chorus is 

"This land is your land, this land is my land
From California to the New York island,
From the redwood forest to the Gulf Stream waters;
This land was made for you and me. "

 

I asked three LLMs to propose Trump versions, and got these three: 

This Land Is My Brand  by Gemini

Chorus
This land is my land, it’s mostly my land,
From Mar-a-Lago to the New York island,
From Lake America to the Gulf of America,
This map was drawn for only me.
########

This Gulf Is My Gulf by Claude:

It's my gulf now, it's my lake now,
Change the name and don't look back now,
One man's word is all it takes now —
This map was made for me alone.
 #########

 This map is my map, by Chat GPT

It’s America’s Gulf, it’s America’s lake,
The greatest new names that a President could make!
They’re beautiful names, everybody agrees—
Ask anybody! Ask anybody! Ask anybody, please!

It’s America’s Gulf, it’s America’s lake,
Tremendous decisions for history’s sake!
The old names were terrible — frankly, a mess—
But these names are the greatest! The greatest! God bless! 

#########

*Names, like language itself, are largely equilibrium phenomena--even for entirely US based names, like Cape Canaveral, which was officially called Cape Kennedy only from 1963 to 1973, when it's earlier name was officially reinstated. 

Advice for young academic economists, by William Thomson

 I just received my copy of William Thomson's excellent new book:

 A Guide for the Young Economist, third edition
by William Thomson 

"A newly updated edition of the definitive guide for budding economists, with a new chapter of advice for young professors.

"In clear, accessible language—a model of what he advocates—William Thomson shows early-career economists how to make written and oral presentations both inviting and effective. A Guide for the Young Economist covers the basics of clear exposition, including such nuts-and-bolts topics as titling papers, writing abstracts, presenting research results, and holding an audience’s attention.

"This book is an invaluable guide for young economists working on their dissertations, preparing their first articles for submission to professional journals, getting ready for their first presentations at conferences and job seminars, or facing their first refereeing assignments. In this new edition, the author also includes a chapter of advice written especially for those young economists who have just received their PhDs.  "

Here's my blurb: 

“Thomson, a renowned teacher, explains clearly much of the invisible curriculum for becoming an academic economist, from pursuing a PhD to approaching tenure. Even old hands will find actionable advice.”
—Alvin E. Roth, McCaw Professor of Economics, Stanford University; author of Who Gets What—and Why and Moral Economics
 

But don't just take my word for it: read all the endorsements: 

 

 

The Gray Area, on Moral Economics and controversial markets

 Here's a podcast recorded some weeks ago that has just  been published. We talk kidneys and other controversial markets covered in Moral Economics.

 

Reverse fertility tourism--Americans traveling abroad for more affordable IVF

The US is a destination for people needing assisted reproductive technology (ART) to have a child, often because it is unavailable in their home country. Surrogacy has been much in the news in this respect, but IVF is also restricted in many places.  But American ART is expensive, so some Americans are traveling abroad for the sake of ART.

The Washington Post has the story: 

Why some couples are combining a European vacation with their IVF treatments
A growing number of Americans are looking abroad, particularly to Greece and Spain, to escape the high cost of fertility treatments at home. by LJ Dawson

" A study of insured Americans released in July and commissioned by the Women’s Reproductive Health Foundation found that the overall cost for a cycle of IVF was more than $29,000 — or about 35 percent of the median annual household income in the U.S. Genetic testing, embryo storage, pregnancy care and delivery costs can push the total over $54,000 per IVF-conceived birth, according to the study. An average patient needs two to three cycles to have a child, so the costs for many patients would be even higher.

"Infertility affects nearly 7 million people in the U.S., but only an estimated 24 percent of treatment needs are met, because of those high costs and limited insurance coverage, according to the American Society for Reproductive Medicine. The condition is believed to be rising partly because of people having children later, as well as environmental factors such as pollution.

"Still, more than 100,000 babies were born via IVF in the U.S. in 2024 — a record, according to the Society for Assisted Reproductive Technology. An increasing share of people hoping to be parents are seeking help in Europe: The number of Americans choosing European clinics grew by more than 37 percent last year, according to Jakub Dejewski, chair of the European Fertility Society, a group that tracks data on fertility treatment in Europe. 

...

"The price of IVF and uncertainty around proposed personhood legislation in Florida, which the Solomons feared could jeopardize their control over their embryos, sent them to the Pelargos IVF Medical Group in Athens. There, in the first of two trips, Emilie underwent ovulation stimulation and egg retrieval.

"Including medication, fertilization, storage and the ultimate embryo insertion, the total treatment (excluding travel expenses) cost about $12,000, according to the Solomons, a fraction of what they might have spent in the U.S. "

Axel Ockenfels, interviewed about market design

Here's a recent interview of Axel Ockenfels, about market design.

Interview Marc Kley

1. Professor Ockenfels, your work focuses on the design of markets and incentives. How can founders leverage your scientific insights when developing their business models?

Every business model is, to some extent, an exercise in incentive and market design, whether founders are aware of it or not. Whoever builds a platform, a pricing scheme or an app decides who can trade with whom, what information they see, and what incentives they face. Market design research offers three lessons for founders. First, details matter: seemingly minor rules can make or break a market. I have seen many systems fail because of seemingly innocuous design mistakes. Second, behavior matters: people reciprocate, care about fairness, are loss averse, and are quickly overwhelmed by complexity. Third, testing matters: experiments are the wind tunnel of market design and the gold standard for finding out what works and what does not. 

... 

4. In your opinion, which major societal challenge could be solved more effectively if we designed markets, platforms, and incentives more intelligently?

Almost any. Take climate change. It is often framed as a moral problem, but at its core it is a cooperation problem: everyone benefits if emissions fall, yet each country, company and individual prefers others to bear the cost. A uniform carbon price would steer billions of everyday decisions toward climate protection without micromanaging any of them. Not less importantly, our research shows that carbon pricing facilitates international negotiations built on reciprocity, which can stabilize cooperation where unilateral pledges fail. A similar logic creates value elsewhere: kidney exchange programs save lives, well-designed electricity markets keep the energy transition affordable, and clever matching systems allocate school places more fairly. Wherever incentives are misaligned, better economic design can unlock large social value