Market design and water conservation in the the Great Salt Lake

Silvia Console Battilana, who co-founded Auctionomics along with Paul Milgrom, writes in Forbes about the prospects for market design efforts to help conserve Utah's Great Salt Lake. 

How Market Design Could Help Save Utah’s Great Salt Lake by 
By Silvia Console Battilana

 "the Great Salt Lake is drying up.

"To save the lake while protecting water users, business leaders can adopt a little-known but powerful economic tool: market design. When water levels drop, the consequences immediately hit commercial supply chains and local commerce. Market-based incentives give businesses a way to reward upstream water conservation, bringing more water to the lake without hurting regional growth. The invisible hand of the market could identify the least expensive conservation, compensate participating water users and restore the Great Salt Lake.

...

"The shrinking of the Great Salt Lake has many causes, and there is no silver-bullet fix. But any solution to refill the lake will likely involve conservation within Utah. Seventy-one percent of the water diverted from the lake’s basin is allocated to agriculture. If those commercial users could make more efficient use of water, more would reach the lake.

The catch is that many conservation practices, like water-friendly infrastructure and precision irrigation, are expensive. Under Utah’s traditional “use-it-or-lose-it” water rights system, users have little financial reason to conserve. Without modern economic incentives, asking businesses and farms to voluntarily cut back simply isn’t realistic.

Even if water users could be forced to cut back, it’s not clear who should cut back, or by how much. The costs of water conservation aren’t the same across users, and they can be very hard to estimate.

Market design can address both of these challenges. Crucially, markets don’t force particular actions or behaviors. Instead, well-designed markets create an incentive for farms and communities to cut back on water and be rewarded for their efforts. Anyone who can cost-effectively reduce consumption will do so, while others aren’t compelled to conserve if it would be too expensive.

Market Design Works
Even when the stakes are high and a lot stands in the way, intentionally designed markets can successfully align self-interest with the public good.

Further, market design can be used to align incentives even when money isn’t exchanged: it has been used for organ donation exchanges and food banks. Harnessing the invisible hand of the market to align incentives in pursuit of a common goal is an effective tool for difficult problems."

 

 

The International Festival of Economics, in Turin, October 22-25

 The International Festival of Economics will take place in Turin from 22 to 25 October 2026.  I hope to be there to participate in all but the first day. (I'll be speaking on Saturday.)

 The International Festival of Economics 2026

"Following the success of its first four editions, respectively dedicated to The New Generations of the World (2025), Who Owns Knowledge (2024), Rethinking Globalization (2023), and Merit, Diversity and Social Justice (2022), the Festival will return from October 22 to 25 in some of the most beautiful venues in the center of the Piedmontese capital with a new edition titled Saving the Welfare State. In Turin, some of the most authoritative economists and international experts working at the forefront of research on this topic will meet, together with scholars from many other disciplines.

The International Festival of Economics is curated by Editori Laterza and Collegio Carlo Alberto - Torino Local Committee (TOLC) under the scientific direction of Tito Boeri. The event is promoted by the TOLC, which brings together the Piedmont Region, the City of Turin, Fondazione Compagnia di San Paolo, Fondazione CRT, the University of Turin, the Polytechnic University of Turin, the Turin Chamber of Commerce, Unioncamere Piemonte, Unione Industriali Torino, and Legacoop, coordinated by the Fondazione Collegio Carlo Alberto.

Collegio Carlo Alberto will be one of the festival's venues, hosting 29 events.

Visit the Festival Website"
 

Moral Economics reviewed in American Journal of Transplantation

 I wonder if this is the first time an economics book has been reviewed in the American Journal of Transplantation.

Poetic justice: A review of moral economics by Alvin E. Roth
Michael A. Rees

 "Alvin E. Roth describes poetic justice as the Virginia state flag flying at half-mast in 2020 in honor of Bernie Cohen, who argued the US Supreme Court case Loving v. Virginia that made interracial marriage legal. Turns out Mildred and Richard Loving were convicted of interracial marriage in 1967, arrested by police at 2 AM at home in their bed, and sentenced to 1 year in prison but suspended on the condition that they leave Virginia for 25 years. Reading what the Virginia Court of Appeals judge wrote, side by side with what the US Supreme Court wrote, is, by itself, worth the price of the book.
 

"Those of us in the field of transplantation have felt—and will continue to feel—the impact of repugnance. In moral economics, Alvin E. Roth takes us on a grand tour of how repugnance shapes transactions across a wide spectrum of human activities. Take uterus transplantation, pioneered in Sweden, a country where repugnance to surrogacy has made it illegal. You can transplant a uterus into a woman with infertility in Sweden, but do not you dare use a surrogate’s uterus in her own body to help you achieve a baby! Alvin E. Roth defines repugnance as a morally contested market that some people would like to participate in, but others think should be outlawed. He goes on to call a transaction repugnant if “all parties to the transaction want to engage in it, and others think they shouldn’t be allowed to for moral or religious reasons, even though those others can’t detect that the transaction has taken place unless someone tells them.”1 I found it fascinating to walk through all the ways in which repugnance has shaped the world in which we live.
 

"The book starts with a clear example of a transaction that many people want to engage in: sex. Of course, I knew about the repugnance surrounding prostitution and pornography, but could hardly believe the stories of how far people go on either side of a repugnant transaction. I found my own views challenged by what I thought was right, especially when considering the outcome I desired from the controversy being described. It was interesting to have these stories told by the “Father of Market Design” and to think about sexual desire as a contested marketplace with good and bad outcomes that could be influenced by better market design.
 

"It is not the first time I have been surprised to think about a human desire for something like love or health as a transaction that economists could study. I first met Alvin E. Roth in about 2004 when he thought he could help us transplant professionals do a better job with kidney exchange. I made the mistake of thinking that economists only worried about money, albeit at both the microlevel and macrolevel. This book makes clear that if we want to have the desired outcome of helping as many people as possible through organ transplantation, we are going to have to think like market designers and overcome repugnance to innovation. Remember Richard Lower in 1968 being threatened with criminal charges for “wrongful death” for removing a donor heart prior to the establishment of brain death criteria?
 

"My favorite chapter was about reproduction. You would not believe all the interesting twists and turns that have happened as artificial reproductive technology has blossomed, and some people wanted to have babies using it, whereas others were morally aghast at their desire, working hard to stop them. It was interesting to see different sides of contraception, abortion, in vitro fertilization, egg and sperm donation, paternity, maternity, parenthood, and surrogacy. But Alvin E. Roth has such a nice way of distilling complicated concepts, such as this quote: “Some critics have said that looking for an egg donor who attends Harvard, for example, reeks of eugenics. In response to that, Professor Kim Krawiec, perhaps the leading legal scholar of “taboo trades,” gave a very cogent response: “Fertile people have been screening for beauty and intelligence for years and years. It’s called dating.”2
 

"If transplantation attracted you as a field in part because of the ethical challenges encountered when considering organ donors and recipients, Moral Economics provides a narrated guide through thorny issues. Near the end of the book, we find perhaps the best call to action for those of us who want to solve problems. The Persian poet Rumi invites us to navigate repugnance: “Out beyond ideas of wrongdoing and rightdoing, there is a field. I’ll meet you there.”3
 
1. Roth, A.E.
Moral Economics: From Prostitution to Organ Sales, What Controversial Transactions Reveal About How Markets Work. Hachette UK; 2026
2026

2. Jones, A. Putting a Price on a Human Egg.”
Wall Street Journal. July 26, 2015;
Accessed XXX www.wsj.com/articles/putting-a-price-on-a-human-egg-1437952456

3.Rumi, “Out Beyond Ideas of Wrongdoing and Rightdoing.” Poetry Society of America. 

Kidney exchange may (re)emerge in Korea

 Kidney exchange, which was pioneered in South Korea in the late 1990's, has largely been moribund there.  But here's a call to change that.

Reemerging kidney paired donation in Korea: simultaneous two-way swaps to overcome human leukocyte antigen and anatomic barriers
Eunjeong Kang1,2, Kyung Ok Min1, Hee Gyung Kang3, Yohan Ahn3, Eun Young Song4, Ara Cho5, Ahram Han5, Sangil Min5, Jongwon Ha5,6,7, Sehoon Park2, Yong Chul Kim2, Yon Su Kim2,8, Hajeong Lee2,8  Kidney Research and Clinical Practice 2026;j.krcp.25.391. DOI: https://doi.org/10.23876/j.krcp.25.391
 
Abstract
Background
South Korea first implemented kidney paired donation (KPD) to overcome ABO-incompatible living-donor kidney transplantation. Although utilization declined as desensitization matured, persistent desensitization failure and anatomic constraints have renewed interest in KPD within a regulated framework. We report a recent single-center experience.
Methods
KPD exchanges were coordinated within an institutional registry under national supervision. We retrospectively reviewed six consecutive, simultaneous two-way exchanges (12 recipients) from 2022 to 2025. We assessed predefined desensitization failure or anticipated failure with the intended donor, compared immunologic compatibility between intended and exchange donors, and recorded perioperative desensitization, graft function, delayed graft function (DGF), and biopsy-proven acute rejection (BPAR).
Results
Five of six exchanges were undertaken for immunologic reasons. All five met criteria for desensitization failure or anticipated failure to the intended donor, with positive crossmatch and high donor-specific antibody (DSA) burden. Reassignment to the exchange donor reduced risk, lowering maximum DSA mean fluorescence intensity (MFI) from 13,228 to 1,350 and total DSA MFI from 20,542 to 2,240, although selective desensitization was still required in some recipients with residual human leukocyte antigen or ABO incompatibility. The remaining exchange addressed an anatomic constraint (adult–pediatric size mismatch). At a median follow-up of 12.2 months (range, 0.9–42.1 months), no DGF or BPAR occurred; all grafts were functioning, and the median estimated glomerular filtration rate was 66.8 mL/min/1.73 m2.
Conclusion
KPD is a safe alternative when desensitization fails or is predicted to fail, including in highly sensitized and anatomically complex candidates. These findings support renewed implementation of KPD alongside selective desensitization in Korea. 

 

Celebrating science and democracy at the Hebrew University of Jerusalem, on Monday

 If the skies remain open, I'm on my way to Jerusalem, to participate in a twice-recheduled event at the Hebrew University of Jerusalem.  (It was first scheduled for June 2025, to coincide with HUJI's 100th anniversary, but it was postponed to June 2026 on account of war with Iran.  The June 2026 event was again postponed, for the same reason...)

Now, a week before Israeli elections (and less than a month before American midterm elections), amidst all the political polarization in both countries, I'm reminded that universities are one of the bastions of democracy. I don't doubt that most of the other honorees gathering in Jerusalem feel the same way. (I note that three of the honorary doctorate recipients have received the Nobel memorial prize in economics.) 

 Honorary Doctorate Recipients:
Prof. Joshua D. Angrist
Danna Azrieli
Dr. Naomi Azrieli O.C.
Dr. Sharon R. Azrieli CQ 
Prof. Shafi Goldwasser
Steven H. Lavin
Marc O. Mayer
Prof. Joel Mokyr
Yehuda Leon Poliker
Prof. Alvin E. Roth
Prof. Sabine Schmidtke

Bublick Prize Recipient:
Prof. Eliezer Rabinovici  

Rothberg Prize Recipient:
Eshel Gat

Honorary Fellowship Recipients:
Ronen Barel
Florence de Botton
Jean-François de Clermont-Tonnerre
Benjamin Horwood 
Dr. John Lourie
Prof. Malcolm Shaw KC
Dr. Wallace N. Weber
Zvi Yekutiel 

Here's a blurry photo that appeared on the front page of the 16 October Haaretz, with the names and nationalities of the honorees (sent to me by Assaf Romm)

 

Marilda Sotomayor is celebrated in Brasil, with an honorary doctorate at Universidade de Brasilia

 Marilda Sotomayor is increasingly recognized as among Brazil's most important economists.

 Consuni approves granting the title of Doctor Honoris Causa to Marilda Sotomayor 

 "The University Council (Consuni) approved, by acclaim, the granting of the title of Doctor Honoris Causa to the professor and mathematics Marilda Antonia de Oliveira Sotomayor. 

...

"Marilda Sotomayor is recognized for her contribution to Game Theory and Matching Theory, an area dedicated to the study of allocation mechanisms in two-sided markets. The opinion of the Special Commission highlighted its contribution to the consolidation of this field of research in Brazil and its international projection.

"Graduated in Mathematics from the Federal University of Rio de Janeiro (UFRJ), Marilda completed a master’s degree at the Institute of Pure and Applied Mathematics (Impa) and a doctorate from the Pontifical Catholic University of Rio de Janeiro (PUC-Rio), in partnership with Impa. During the postdoctoral degree at the University of California, Berkeley, she worked with David Gale, one of the founders of Matching Theory.

"Among her main contributions is the book Two-Sided Matching: A Study in Game-Theoretic Modeling and Analysis, published in 1990 in co-authorship with Alvin Roth. The work received the Lanchester Prize and became an international reference in the area. Marilda is also a member of the Brazilian Academy of Sciences and the American Academy of Arts and Sciences and has received, among other distinctions, the 2016 TWAS Award.

"The proposal to grant the title was presented by Professor Maurício Bugarin to the Department of Economics (ECO/Face) and encamped by the Faculty of Economics, Administration, Accounting and Public Policy Management (Face)."

 

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How successfully have military measures limited the supply of cocaine?

 There are two ways of measuring the success of military measures to limit the supply of cocaine.  There's the military measure of how many people are killed and how much cocaine is confiscated. And there's the economic measure of how much cocaine is available to consumers, at what price and quality.

The WSJ has the story (of plunging prices and rising quality):

Why U.S. Airstrikes Are Failing to Stop the Global Cocaine Boom
Smugglers are shifting routes and using new tactics to evade military targeting, resulting in record supplies, plunging prices and high purity in the U.S. and Europe   by Juan Forero
 |
"BUENAVENTURA, Colombia—The Trump administration’s bombing campaign against cocaine-smuggling speedboats is starting to have an impact on the global drug trade—but not necessarily in a good way.

...

"Record supplies of cocaine still arrive in the U.S., Europe and as far away as Australia every day, cheaper and purer than they’ve been in decades, said law-enforcement officials across four continents. 

"President Trump has celebrated the airstrikes, noting his administration has “made tremendous strides in stopping the flow of illegal drugs into our country.” In the past 13 months, American military drones and aircraft have destroyed more than 70 vessels, killing nearly 240 crew members and depriving criminal groups of $1.5 billion in cocaine, according to U.S. officials. 

“The drugs coming in by sea are down by 97%,” Trump said in June. “We’re trying to figure out who the 3% are, because they are the bravest people on earth.”

...

"The scale of the trade is evident on the streets of drug-consuming countries, where supply is outstripping demand to the point that prices are plunging. In Miami, wholesale cocaine sold for about $16,500 a kilogram this summer, well below the historical $22,000 to $25,000 range. Similarly, European prices have plummeted from $45,000 to as low as $16,000 a kilogram in some cities. 

"In both markets, purity remains remarkably high, sometimes hitting 98% in Europe, because dealers no longer need to stretch supplies with adulterants. "

 

NBER Market Design Working Group Meeting, tomorrow at Stanford

 Here's the program for the NBER Market Design Working Group Meeting, Fall 2026

I'll be discussing Moral Economics with Canice Prendergast. 

Friday, October 16

8:00 am Continental Breakfast

 

9:00 am Personalized Recommendations Without Inducing Congestion: Mitigating Disparities in the NYC High School Match

Erica Chiang, Cornell University

Nikhil Garg, Cornell University

Jon Kleinberg, Cornell University

Rebecca Lichtenstein, New York City Public Schools

Brielle McDaniel, New York City Public Schools

Kristen O’Neil, New York City Public Schools

Kenny Peng, Cornell University

Eva Tardos, Cornell University

Dejaunique Thomas, New York City Public Schools

Lianna Wright, New York City Public Schools

 

9:45 am Who Gets What in Education: Can School Matching Improve Student Achievement?

Atila Abdulkadiroglu, Duke University and NBER

Parag A. Pathak, Massachusetts Institute of Technology and NBER

Christopher R. Walters, University of California, Berkeley and NBER

 

10:30 am Break

11:00 am Searchable Menus

Piotr Dworczak, Northwestern University

Frank Yang, Stanford University

 

11:45 am Two-Sided Matching with Partial Participation

Avinatan Hassidim, Bar-Ilan University

Assaf Romm, Hebrew University of Jerusalem

Ran Shorrer, The Pennsylvania State University

 

12:30 pm Lunch and Conversation with Al Roth about his latest book, "Moral Economics" with Canice Prendergast as Moderator

 

2:30 pm Clearing Multi-Unit Markets with Simple Pricing

Ali Makhdoumi, Duke University

Saša Pekeč, Duke University

Xinchang Wang, Duke University

 

3:15 pm Quota Marketplace: Dynamic Pricing for Efficient Allocation of ML Training Resources

Vasilis Gkatzelis, Drexel University

Renato Paes Leme, Google Research

Ian McFarlane, Google Research

Nehal Mehta, Google Research

Vahab Mirrokni, Google Research

Balasubramanian Sivan, Google Research

Mihai Tiuca, Google Research

Amin Vahdat, Google Research

Soheil Hassas Yeganeh, Google Research

 

4:00 pm Break

 

4:30 pm One-Shot Pricing for Hands-Off-the-Wheel Advertising Markets

Emerson Melo, Indiana University

Matthew Shum, California Institute of Technology

Rakesh Vohra, University of Pennsylvania

 

5:15 pm Paying for Information, Not for Clicks: A Block-Level Publisher Content Marketplace for AI Answers

Markus Mobius, Microsoft Research

Nicole Immorlica, Microsoft Research

Oliver Kiss, Spreadmonitor

Brendan Lucier, Microsoft Research

Ishan Mahajan, Microsoft Research

Jingyi Qiu, University of Michigan School of Information

Tanya Rosenblat, University of Michigan

David M. Rothschild, Microsoft Research

Andras Sari, Central European University

Colin Watson, Microsoft Research

6:30 pm Group Dinner 

 

Saturday, October 17

8:00 am

Continental Breakfast

9:00 am

Screening for Usage

Justin Hadad, Stanford University

Kyle Woodward, Assign Group

 

9:45 am

Pricing the Right to Renege in Search Markets: Evidence from Trucking

Richard Faltings, University of California, San Diego

 

10:30 am

Break

 

11:00 am

Competition and Welfare in Airport Slot Allocation

Sebastian D. Bauer, Universidad Carlos III de Madrid

11:45 am

Road Pricing under Heterogeneity

Itai Ater, Tel Aviv University

Brad Ross, University of Pennsylvania

Adi Shany, Tel Aviv University

Shoshana Vasserman, Stanford University and NBER

 

12:30 pm

Boxed Lunch and Adjourn