I post market design related news and items about repugnant markets. See my Stanford profile. I have a forthcoming book : Moral Economics The subtitle is "From Prostitution to Organ Sales, What Controversial Transactions Reveal About How Markets Work."
"For generations, the world’s top horse breeders have carefully mixed bloodlines for temperament, strength, conformation and athleticism. Each new foal bore the promise of outperforming a carefully chosen set of parents. It isn’t quite natural selection, but it isn’t far off.
"Now the equestrian world might be hitting a plateau: exact genetic replicas of successful horses and ponies. In other words, clones.
...
"Polo player Adolfo Cambiaso, regarded by many in the sport as the greatest of all time, essentially created the sporthorse cloning industry when he made a slew of genetic copies of his best ponies, starting in the early 2000s—and began winning tournaments on them.
"In 2010, a clone of his champion mare Cuartetera sold at auction for $800,000, an eye-popping sum for a polo pony at the time
...
"Cloning is a controversial practice, but particularly so in horse sports. It is banned in thoroughbred racing and competitors in other disciplines are divided, with some saying it creates unrealistic expectations and stifles advances in breeding.
...
"The Fédération Equestre Internationale, the governing body for Olympic horse sports, banned clones from competition in 2007. But it reversed that decision in 2012 after determining they didn’t provide competitors with an unfair advantage, due to the myriad environmental factors that go into producing a champion, like parentage, training, the rider, the type of food it eats and even the shoes it wears.
...
"Buenos Aires-based Kheiron Biotech, an equine cloning company, produced around 400 cloned horses during the season that ended in February, mostly of various polo ponies. "
If A.I. assisted "surveillance pricing" is going to identify you as a high willingness-to-pay consumer, maybe it will be a good idea to train an A.I. shopping agent to impersonate a low willingness-to-pay consumer on your behalf.
"Businesses have long tracked customers’ search behavior and buying history and used that information, along with other factors like a consumer’s location, to offer promotions and discounts to motivate purchases. Dynamic pricing, where the same fare or rate shifts for everyone based on supply and demand, also has become common across industries, including airfares and ride-shares. What is different now and concerning to researchers is the possibility that online retailers could use personal data to set a higher base price for individual consumers, without their knowledge, when algorithms detect things like urgent need or high disposable income.
...
"It is difficult to find more than isolated cases currently. However, many researchers believe personalized pricing will become increasingly common as the technology to make it possible improves. ...
" Software that automates price-setting—often driven by artificial intelligence—can help retailers seamlessly turn that data into tailored pricing.
"In early 2025, the Federal Trade Commission released initial findings of an investigation into surveillance pricing (another term for personalized pricing). It determined that companies were selling pricing and consumer-data tools to help retailers across various industries set individualized prices—a strong indication to some researchers that retailers were headed in that direction.
Here's a paper that points to the increasingly common practice of law grads taking multiple consecutive clerkships.
George, Tracey E. and Yoon, Albert and Gulati, Mitu, Stacking the Deck (May 29, 2026). Virginia Public Law and Legal Theory Research Paper No. 2026-33, Virginia Law and Economics Research Paper No. 2026-10, Vanderbilt Law Research Paper, Available at SSRN: https://ssrn.com/abstract=6850719 or http://dx.doi.org/10.2139/ssrn.6850719
Abstract A federal judicial clerkship is a government-funded Golden Ticket that opens doors otherwise closed to most. This ticket grants entry to a one-year apprenticeship-an exclusive glimpse behind the judiciary's gates that functions as a mentorship-rich fourth year of law school. Historically, a second passage through those gates was exceedingly rare, typically reserved for those en route to the Supreme Court. That norm has fractured. Increasingly, graduates make repeated passes through the gates, taking two, three, or even four clerkships in succession-a practice now known as "stacking." Each additional passage comes at a cost: it reduces the number of clerkship opportunities available to others and delays the clerk's entry into the legal profession. Drawing on roughly 130 interviews with judges, we examine both the rise of stacking and the forces driving it. Our central argument is that stacking is not an irrational pathology but a rational market response to a structural information failure-and that well-intentioned reform efforts have, perversely, made the problem worse. Judges agree that certain forms of stacking are troubling. Yet few see ready solutions. The problem, as they describe it, is not a lack of awareness but a structure of incentives that makes restraint individually irrational, even if the collective outcome is seen as suboptimal. This Essay diagnoses those structural failures and evaluates the most promising paths forward.
More American women than men now attend college, and this has created a marriage squeeze for women who don't attend college, as the highest-income non-college men increasingly marry college-educated women.
Abstract: Over the past half-century, U.S. four-year colleges have shifted from enrolling mostly men to enrolling mostly women, while the economic position of non-college men has weakened markedly. We examine how these changes correspond with the evolving structure of marriage markets across cohorts and places. As college men have become increasingly scarce, college women have maintained stable marriage rates by marrying high-earning non-college men. This shift—combined with the broader economic decline of non-college men—has sharply reduced the pool of economically stable partners available to non-college women: the share of non-college men who earn above the national median and are not married to college women has fallen by more than 50%. Cross-area evidence shows that education gaps in marriage are smaller where non-college men face lower rates of joblessness and incarceration. Taken together, the evidence suggests that deteriorating outcomes for men have primarily undermined the marriage prospects of non-college women.
"To really understand the nuts and bolts of economics, look to the black market. Alvin E. Roth is Craig and Susan McCaw Professor of Economics at Stanford University and the George Gund Professor of Economics and Business Administration Emeritus at Harvard University. He was awarded the Nobel Prize in Economics in 2012. He joins host Krys Boyd to discuss his work on organ donation which led him to study what he called “repugnant transactions” like sex and drugs and why he feels banning them completely doesn’t always have the effect we think it does. His book is “Moral Economics: From Prostitution to Organ Sales, What Controversial Transactions Reveal About How Markets Work.”
Transcript (also at the above link)
Here's a very contemporary Texas question:
"Krys Boyd [00:25:48] I’m really curious, Alvin, about whether making things illegal has much of an effect on things. I live in Texas, where recreational marijuana is against the law. I can tell you just anecdotally that it appears to not stop very many people. You pose this interesting question about why the laws work pretty well to keep people from committing murder for hire, but not so well at all from buying and selling illegal drugs. "
"Kidneys, surrogacy, prostitution, gambling, price gouging, assisted dying: some transactions make people recoil, even when all parties consent. Cato’s Ryan Bourne talks with Nobel Prize-winning economist Alvin Roth about his new book, Moral Economics, what makes markets “repugnant,” what economists can add to moral debates, and why banning exchange rarely makes scarcity, exploitation, or hard trade-offs disappear."
Below, Alvin Roth shares five key insights from his new book, Moral Economics: From Prostitution to Organ Sales, What Controversial Transactions Reveal About How Markets Work.
Alvin is the Craig and Susan McCaw Professor of Economics at Stanford
University and the George Gund Professor of Economics and Business
Administration Emeritus at Harvard University. A pioneering expert in
the field of market design, he was awarded the Nobel Prize in Economics
in 2012. He is also a member of the National Academy of Sciences and
past president of the American Economic Association.
What’s the big idea?
There’s an old joke about economics and sociology that says
economists try to understand the choices people make, and sociologists
try to understand why people don’t really have any choices. Alvin looks at how societies try to decide whether to allow some choices and ban others.
There are lots of morally contested markets and transactions that
some people would like to engage in, but others think shouldn’t be
allowed. Often, the objections are stated in terms of moral or religious
reasons. And the transactions that the opponents seek to ban don’t harm
them personally—they might not even know the transactions had occurred
unless someone tells them.
For example, same-sex marriage is a morally contested transaction:
two people want to marry each other, and some other people don’t think
same-sex marriages should be allowed—even though you can’t tell if
someone is married unless they tell you, for instance, by wearing a
wedding ring. For centuries, marriage was regarded as inherently
heterosexual. But, after considerable controversy, the U.S. and many
other countries have legalized same-sex unions.
This isn’t a unique situation. Lots of controversial markets are
connected to reproduction. There have been bans at different times and
places on contraceptives, in vitro fertilization, abortion, and
surrogacy. That is, there have been laws enshrining opposing views about
whether a woman should be able to prevent becoming pregnant during sex (by buying contraception), should be able to initiate a pregnancy without sexual intercourse (via IVF), or be able to terminate
a pregnancy via abortion, not to mention being a surrogate or having a
surrogate bear a baby. In the U.S., all those things have been through
the courts multiple times and with different results.
Notice that reliable contraception and IVF involve modern disputes
about modern technologies. Before reliable contraception, sex between a
man and a woman often resulted in pregnancy, and before assisted
reproductive technology, like IVF, sex was the only avenue to
pregnancy. Many traditional laws and norms that attempted to keep sex
within the bounds of marriage between a man and a woman were attempts to
ensure that babies would be born into families. But if pregnancy
becomes a choice, and if there are other ways to have a child than
intercourse between a man and a woman, then the door opens to more
expansive views about who can have sex with whom, and who can start a
family. So, while expanding marriage to include same-sex couples doesn’t
depend on modern technology, we can see that the changes in
reproductive technology may have moved the needle on what kinds of
marriages and related transactions receive social support.
Of course, bans on extra-marital sex, prostitution, or abortion never
succeeded in making those things disappear, even though they raised
barriers.
2. Bans on markets need social support to work well.
Some bans work well while others give rise to active black markets.
For example, why is it so easy to buy drugs, but so hard to hire a
hitman? U.S. laws aren’t so different for drug dealers and hitmen: if we
catch them, we send them to prison for a long time. Yet our prisons are
filled with drug dealers, and there have been years in which more than
100,000 people died from opioid overdoses. But murder for hire is so
rare that it doesn’t even make it into the national crime statistics,
and homicides from any cause are vastly fewer than drug overdose deaths.
At least some of the difference has to do with how people think about
drugs and murder. If I told you I was looking to buy some heroin, you
would be surprised, but you wouldn’t call the police (and if you did,
they would tell you that they were busy with more pressing calls). But
if I told you I was looking to hire a killer, you might very well call
the police, and when you did, they would encourage you to tell me that I
might find an available hitman at a certain bar, where I would find
myself trying to hire an undercover detective. To put it another way,
there are neighborhoods where drugs are readily available, and the
neighbors look away, but not so many neighborhoods where killers are the
norm, in part reflecting that the social norm against drugs is much
more porous than against murder.
“At least some of the difference has to do with how people think about drugs and murder.”
I don’t know how we should best make progress in dealing with the
markets for addictive, lethal drugs. Not only are we losing the “War on
Drugs,” but it won’t even accept our surrender: experiments with
decriminalizing drug use have shown the potential to make cities less
livable. We’re going to need to experiment, to find better ways to
proceed.
It’s worth noticing that we’ve learned to live with legal markets for
tobacco and alcohol, even though each of those causes more deaths than
are due to drug overdoses. And we’re wrestling with some other kinds of
addiction, such as gambling (particularly on your phone, during a game).
The drug epidemic teaches us that well-intentioned policies can fail.
By and large no one approves of heroin, but we haven’t succeeded in
vanquishing it any more than we succeeded in making alcohol disappear
during Prohibition.
3. Moral intuitions aren’t enough by themselves.
We need to gather and pay attention to evidence about the
consequences of particular policies. This is hard when moral intuitions
collide, partly because much moral argumentation rests on weak or no
evidence. But we can’t afford to judge our policies just by their
intentions. We have to at least look at their consequences, too.
Nevertheless, moral intuitions are important and consequential, so we
need to understand them better. There are some things that many moral
intuitions have in common. For example, concern about the possible
exploitation of vulnerable people is often an issue.
4. Sometimes adding money to a transaction arouses repugnance.
For example, paying in cash is what turns sex into prostitution.
Often, the objection to introducing money into transactions is that it
might be an undue influence that could coerce the poor into
transactions that they (or we) would prefer not to take part in. But
that’s over-broad: many people work for financial pay at jobs they
wouldn’t otherwise do. And many goods and services that we need wouldn’t
be available if they couldn’t be paid for.
“Many people work for financial pay at jobs they wouldn’t otherwise do.”
Pharmaceuticals made from blood plasma are a good example. Many
countries ban payments to plasma donors and try (almost always
unsuccessfully) to generate as much as they need of the large amounts of
plasma required to treat many diseases from unpaid donors. How do they
make up for the shortfall? Fortunately, you can buy plasma and
plasma-derived medicines from the U.S. We’re the Saudi Arabia of blood
plasma, exporting tens of billions of dollars of plasma products each
year, collected largely from plasma donors who are paid.
5. Religion remains important in many controversies.
It plays a large role in the growth of legal medical aid in dying, in the U.S. and elsewhere.
Overall, in pursuing moral economics, we have to keep in mind the maxim that ought implies can, and the things we feel morally obligated to do, whether by supporting them or banning them, have to be things that we can
do. To understand those limits, we need evidence, including
experimentation, to figure out how to proceed when we’re worried by all
our options.
"despite the severity of the allegations — an affair that raised serious blackmail risks, attending openly partisan events, and lying to investigators when caught — the Eleventh Circuit and the Judicial Conference both concealed the judge’s identity. They even adjusted the very minor sanction to allow the judge “to word the letters of apology vaguely so as to ensure that a letter could not be ‘used against [the Subject Judge] in some way.’”
...
"The Eleventh Circuit thought it had been so clever in anonymizing its report. The reports don’t include a name or a district, and refer only to “Subject Judge” throughout. The reports even assiduously avoid identifying the judge by gender, proving that even conservative judges can figure out how pronouns work with minimal effort. And yet the reports failed to obscure a number of details that made working out the judge’s identity possible.
...
Handing the reports into two different AI models and turning on all the “deep research” modes, the bots churned for several minutes comparing the reports to publicly available information. Both models delivered lengthy reports reaching the same conclusion. So how did these models do it?
...
"the models instantly filtered out the entire state of Florida. The official reports are littered with references, in varying contexts, to the office of “District Attorney.” Florida uses “State Attorneys” for its local prosecutors. After that, the bots noted that the sanction barred the judge from ever serving as chief judge of their district — meaning the judge was not senior status and not currently the chief judge. The report indicates that investigators spoke with clerks dating back to 2020, disqualifying anyone elevated after that. Discussing the judge attending a DA’s primary victory party, the bot pointed out that the judge had claimed to know the candidate based on their time at the office, narrowing the scope to judges with state prosecutorial experience who overlapped with a sitting DA who won a primary. And had martinis at the victory party. The AI models decided that matched with Atlanta’s Fani Willis. [as the DA]
Once it narrowed the list down, the bot also searched the dockets of possible judges to match the claim in the reports that the high-ranking law enforcement officer did not materialize into a conflict because no cases involving that police department showed up on the judge’s docket.
For good measure, the bot went ahead and took a guess at the officer’s identity too.
In about 10 minutes of work, the AI unraveled all the work these judges put in to keep this confidential. With nothing but a couple of published court documents and the open web. In the time someone might brew a cup of coffee, the most basic possible workflow defeated the Eleventh Circuit’s entire anonymization strategy."
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