Alex Chan on deceased organ donation

 The Harvard Gazette points to this interview with HBS professor Alex Chan:

Designing Incentives That Matter—Even After Death: Interview with Alex Chan By Avery Forman 

"In “Reimagining Transplant Center Incentives Beyond the CMS IOTA Model,” published in January in the Journal of the American Medical Association, Chan explores a government experiment that pays kidney centers for volume and efficiency—not just outcomes—which could increase transplant numbers. Chan cowrote the article with Alvin E. Roth, the George Gund Professor of Economics and Business Administration, Emeritus, at HBS.

In addition, covering funeral costs for organ donors could increase donation rates by up to 35%, and save up to 419,000 life years and as much as $800 million in Medicare expenses, Chan and coauthor Kurt Sweat of the University of Texas Southwestern Medical Center write in “Funeral Expense Reimbursement as a Strategy to Enhance Organ Donation and Transplantation Access,” published in October in NPJ Health Systems.

 ...

"Why Chan felt compelled to study the organ market

“Two things pulled me in. First, this is a market where the stakes are brutally clear. Organ transplantation is one of the few places where inefficiency shows up not as a deadweight loss in a textbook, but as people dying on a waiting list. When a market fails here, it fails loudly.

Second, the level of inefficiency is staggering. Each year, more than 5,000 organs are recovered and then discarded, while roughly the same number of people die waiting for an organ. These are million-dollar transactions once you account for surgery, lifelong care, and avoided dialysis. So even small improvements in incentives can save lives directly and save the healthcare system billions of dollars.

For an economist or market designer, that’s a rare alignment: moral urgency and economic leverage pointing in the same direction.”

Incentives must consider what’s socially acceptable

“Incentive design is much harder than we like to admit. Organ transplantation is a supply chain. You have procurement organizations, hospitals, surgeons, patients, regulators, all responding to different incentives.

Designing a good incentive for one actor is already difficult. Designing incentives so that the entire chain works well is not just adding up the optimal incentives for each link. Sometimes improving one part of the system quietly breaks another.

The choice isn't between market and no market. It’s between a system we design on purpose and a system that fails by accident.

This is a market with moral and political constraints embedded in it. In healthcare, and frankly now in most markets, the incentives that are economically sensible also need to be socially legitimate.

Incentives don’t just change behavior; they express values. In markets that touch life, death, or dignity, people react not only to what the incentive does, but to what it seems to say. That makes incentive design less like tuning a machine and more like negotiating a fragile social contract.

 ...

"The ‘ick factor’ might prevent progress

“Very often people do not want to use the right incentives because they have this concept of it being repugnant.

[For instance], we would pay for the funeral of someone who gives their life for their country when they serve in the military. We will pay for the funeral of someone who donated their body for scientific research to advance society. But if people want to donate an organ to save another person's life? If [that donor’s] family would very much welcome some support at a moment of crisis, we are not going to pay for the funeral. Even a very sensible incentive sometimes is bound by social norms, or even what we call the ‘ick factor,’ and we have a less effective system at the end.

People worry that incentives will corrupt the gift of life. But the truth is that we already have incentives; they’re just accidental and poorly distributed. The choice isn't between market and no market. It’s between a system we design on purpose and a system that fails by accident. Ignorance of incentives doesn't make a system moral; it just makes it inefficient.”

 

Tim O'Reilly on market design in the age of A.I.

 Tim O'Reilly, one of the OG commentators/facilitators/cheerleaders of the internet revolution, has some thoughts on the infrastructure  of the various marketplaces for AI.

The Missing Mechanisms of the Agentic Economy: From disclosures to protocols to markets By Tim O’Reilly
 

"For the past two years, I’ve been working with economist Ilan Strauss at the AI Disclosures Project. We started out by asking what regulators would need to know to ensure the safety of AI products that touch hundreds of millions of people. We are now exploring the missing mechanisms that are needed to enable the agentic economy.

"This essay traces our path from disclosures through protocols to markets and mechanism design. Rather than simply stating our conclusions, I’m sharing our thought process and some of the conversations and historical examples that have shaped it. 

...

"Economists use the term “mechanism design” to describe the engineering of rules and incentive structures that lead self-interested actors to produce outcomes that are good for everyone. It’s sometimes called “reverse game theory.” Rather than analyzing the equilibria that emerge from a given set of rules, you start with the outcome you want and work backward to design the rules that will get you there.

"Mechanism design theory got its start in the 1960s when Leonid Hurwicz took up the problem of how a planner can make good decisions when the information needed to make them is scattered among many different people, each of whom has their own interests. His key insight was that people won’t reliably reveal what they know unless it’s in their interest to do so. So how do you design a system that aligns their incentives?

"The field that Hurwicz founded and that Eric Maskin and Roger Myerson developed through the 1970s and 80s earned all three the Nobel Prize in Economics in 2007.

"I first encountered the field when Jonathan Hall, at the time the Chief Economist at Uber, waved Al Roth’s book Who Gets What — and Why at me and said “This is my Bible.” In it, Roth describes his own work on mechanism design, which won him the 2012 Nobel Prize in Economics along with Lloyd Shapley. Roth applied mechanism design to kidney matching markets, markets for college admissions, for law clerks and judges, and for hospitals and medical residents. When I first talked to Jonathan and then Al Roth, my layman’s takeaway about mechanism design was that it was simply the application of economic theory to design better markets.

"And I’ve since come to think even more broadly about what mechanism design might mean in a technology context. In my broader framing, packet switching was a breakthrough in mechanism design. So for that matter was TCP/IP, the World Wide Web, and the protocol-centric architecture of Unix/Linux, which enabled open source and the distributed, cooperative software development environment we take for granted today. PageRank and the rest of Google’s organic search system also seems to me to be a kind of mechanism design. So do Pay Per Click advertising and the Google ad auction. All of them are ways of aligning incentives such that self-interested actors produce outcomes that are good for others as well. "

Germany legalizes kidney exchange !!

 Axel Ockenfels forwards the good news. He writes: "It passed! The Bundestag voted today to permit kidney exchange in Germany. The CDU/CSU, SPD, and Greens voted in favor." 

 (More steps will have to be taken before kidney exchanges occur regularly in Germany, but this is a giant step forward.) 

 Here's the official announcement:

Parlament weitet Regeln zur Lebendorganspende aus  

Parliament expands rules on living organ donation 

"On Thursday, March 26, 2026, the Bundestag expanded the possibility of living kidney donations to increase the circle of possible organ donors and organ recipients. A corresponding bill of the Federal Government "to amend the Transplantation Act – Amendment of the regulations on living organ donation and further amendments" (21/3619) in the version amended by the Health Committee was adopted by the majority of the CDU/CSU, SPD and Bündnis 90/Die Grünen against the votes of the parliamentary group Die Linke, with the AfD abstaining. In the future, this will also enable so-called cross-over living kidney donations between different couples. 

...

"Despite numerous initiatives to promote organ donation, there has been no trend reversal so far. At the end of 2024, around 6,400 people were waiting for a donor kidney, according to the information. At the same time, the number of kidney transplants fell to 2,075. A total of 253 patients died in 2024 who were on the waiting list for a kidney.

"Opening up further therapy options
"Therefore, it is important to open up further therapy options that have long been established internationally. The goal of countering the danger of organ trafficking remains decisive in the amendment of the regulations, according to the draft.

"In the future, living kidney donations will be possible "crosswise" by another organ donor partner in the case of immunologically incompatible organ donor couples. The organ donor couples do not have to know each other. However, the so-called close relationship of the respective incompatible partners should remain mandatory. 

"Principle of subsidiarity is repealed
"The so-called principle of subsidiarity, according to which organ removal from living persons is only permitted if no suitable organ from a deceased donor is available, will be repealed. Non-directed anonymous kidney donation, i.e. a donation to an unknown person, is also made possible. The donor should have no influence on the recipient.

"The plan is to establish a program for the mediation and implementation of crossover living kidney donation, including anonymous kidney donation. A center for the placement of kidneys is to be established. The conciliation procedure is laid down by law.

"Care in the transplant center mandatory
"Mandatory independent psychosocial counselling and evaluation of donors before a donation will be introduced. In addition, care in the transplant center will be mandatory throughout the entire donation process.

"If a living kidney donor later falls ill himself and needs a kidney transplant, this should be taken into account when arranging kidneys donated postmortem. Institutions that remove tissue postmortem should be able to be connected to the Register for Declarations of Organ and Tissue Donation (OGR) so that they can clarify for themselves whether there is a willingness to donate tissue in a potential donation case." 

########## 

It's been a long campaign, and Axel and a number of others played a critical, tireless role, both in public and in private consultation with lawmakers and interested parties. It's notable that the legislation looks forward to allowing nondirected donors (not every European kidney exchange program does.) It's also notable that the current bill expects that compatible pairs will not be eligible to participate in kidney exchange to seek a better match. That's a battle that hasn't yet been won, despite the fact that compatible pairs are important in a number of ways in U.S. kidney exchange.

Still, this is a significant victory in a campaign that has been going on for at least a decade. I may have written the first German newspaper editorial on the need to legalize kidney exchange in Germany, almost exactly ten years ago:

Thursday, March 17, 2016  German organ transplant law should be amended or reinterpreted to allow kidney exchange: my op-ed in Der Tagesspiegel

 

Here's one of the more recent editorials, which I was privileged to coauthor with Ockenfels and two other heroes (or in this case heroines) of this struggle, Agnes Cseh and Christine Kurschat:

Monday, September 9, 2024  Anticipating kidney exchange in Germany in the Frankfurter Allgemeine Zeitung

 Der Volkswirt Hoffnung durch Tausch  by Ágnes Cseh, Christine Kurschat, Axel Ockenfels und Alvin E. Roth

 

 There will be more steps to take to establish effective regulations and institutions to make kidney exchange readily available in Germany, but this is a big step in that direction.

Abundant, the movie about nondirected kidney donors, is now available for streaming.

 Abundant, the movie about (mostly) non-directed (mostly) kidney donors (but also some livers), is now available for streaming.

You can get it at https://abundantmovie.com/ 

You can see all my posts about the movie Abundant here. 

An unbalanced and congested marriage market afflicting some groups of religious Jews

 Here's an article about the "shidduch" (matchmaking) crisis being experienced in some parts of the orthodox Jewish community.  It's interesting (in particular to readers of this blog) for several reasons. As it's title suggests, it is about both a particular institutional feature of a marriage market and about the use of secular science by religious communities.

The general problem is the "marriage squeeze" in communities in which husbands tend to be older than wives, when birth cohorts are growing (so there are e.g. more younger women than, say, two-year-older men).  The author argues that the practice of asking new students in yeshiva to promise not to date during their first semester adds congestion to the mix, when they all come on the marriage market at the same time. 

(A glossary may help:  shidduchim is matchmaking, a shidduch is a match, a shadchan is a matchmaker, chochma is wisdom, a yeshiva bochur is a student, bochurim is the plural, 

From VIN News: 

The Freezer Policy and Science  By Rabbi Yair Hoffman 

"There are several thousand more young women than young men currently in shidduchim.  ... "We have girls who have not received a single shidduch call in months — if not ever. 

...

"We cannot ignore the needs of half of Klal Yisroel. The time to act is now. 

"The Midrash in Eichah Rabbah (2:13) teaches us: “Im yomar lecha adam: Chochma baGoyim — Taamin. If a person tells you that the nations of the world possess wisdom — believe it.

...

"We are instructed to take Chochma seriously. The empirical sciences, mathematics, economics, the study of how systems behave — these are chochma. And Chazal tell us: taamin. Believe it. Use it.

...

"Three of the world’s foremost experts in the science of matching markets and queue theory have produced findings that apply directly — with surgical precision — to the shidduch crisis and to the structural damage caused by the Freezer. The Torah tells us: taamin. Listen to what they have found.

"Winner of the 2012 Nobel Memorial Prize in Economics for his foundational work on matching markets — Professor Roth devoted his career to studying the precise kind of system our shidduch world represents: a two-sided market where two groups must find each other, and where price alone cannot clear the market. He uses marriage itself as his primary model.

"In his landmark paper “Jumping the Gun: Imperfections and Institutions Related to the Timing of Market Transactions” (American Economic Review, 1994), Roth documented a phenomenon he calls “unraveling” — the destructive timing failures that occur in matching systems. He found that timing problems:

“…play an important and persistent role in a wide variety of settings” — explicitly including “marriage in a variety of cultures.”

"Roth further showed that when one side of a matching system is held back and then released in a synchronized wave — precisely what the Freezer does to bochurim — the result is “congestion”: a catastrophic overload in which a sudden surge of participants meets an accumulated backlog they cannot process equitably. In his research on the market for clinical psychologists, Roth documented that congestion left thousands of participants “stranded” without a match — assigned to no one — not because of a shortage of partners, but purely because of the structural timing failure.

...

"Professor John Little of the Massachusetts Institute of Technology published in 1961 what is now called “Little’s Law” — the foundational theorem of all queue theory, cited in virtually every textbook on operations research, supply chain management, and systems analysis. It is one of the most proven and universally applied mathematical theorems in modern science.

"Little’s Law states with mathematical certainty: 

“An arrival rate exceeding an exit rate would represent an unstable system, where the number of waiting customers in the store would gradually increase towards infinity.”

...

"In plain language: once a timing imbalance is introduced into a matching system, the backlog will grow 

...

"In their jointly published research, Roth and Xing documented what happens when a large matching system attempts to process too many participants in too narrow a window of time:

“Congestion is an issue whenever a large number of offers have to be made [simultaneously]. The system… stranded [thousands of participants] on waiting lists… assigned to no one or to options for which they expressed no preference.”

...

This is the precise mechanism the Freezer creates. By holding back an entire cohort of bochurim and releasing them at once into a pool of girls that has been accumulating for months, the system is flooded. Bochurim cannot adequately evaluate the full pool. They gravitate toward the newest, youngest entrants. The girls who have been waiting longest — those who entered the system months or years earlier — are stranded. They are not passed over because of any failing of their own. They are stranded by a structural timing failure

...

"To fix a problem, we must understand it. The primary cause of the crisis is well-known: bochurim generally marry girls a number of years younger than themselves. Since the Jewish population grows every year, Baruch Hashem, this age gap means more girls enter shidduchim each year than boys — and many girls are inevitably left behind.

"But there is a second, compounding structural factor: the timing distortion caused by the BMG Freezer. Any bochur who arrives for the winter zman, beginning Rosh Chodesh Cheshvan, must wait three and a half months until the Fifteenth of Shvat before he may begin dating. He signs a written agreement to this effect. The stated purpose was noble: to allow bochurim to become acclimated to their new yeshivah and learn without interruption." 

###########

previous posts about the shidduch crisis:

Friday, January 8, 2016  Baby booms and marriage squeezes

Tuesday, December 17, 2024  Marriage markets among religious Jews

 and on matchmaking more generally:) 

Tuesday, June 5, 2012 What has G-d been doing since the Creation? (Matchmaking, of course...))

 

 

Kidney exchange now has a broad literature across multiple disciplines

 One pleasure of following an area of research for a long time is getting to see how its academic literature becomes both deeper and broader.  That's certainly been the case with kidney exchange, which now has (of course) a big medical literature, but has also spurred research in the economics and operations research communities.  Here's a recent survey of the OR literature:

Barkel, M., Colley, R., Delorme, M., Manlove, D., & Pettersson, W. (2025). Operational research approaches and mathematical models for kidney exchange: A literature survey and empirical evaluation. European Journal of Operational Research. 

Abstract: "Kidney exchange is a transplant modality that has provided new opportunities for living kidney donation in many countries around the world since 1991. It has been extensively studied from an Operational Research (OR) perspective since 2004. This article provides a comprehensive literature survey on OR approaches to fundamental computational problems associated with kidney exchange over the last two decades. We also summarise the key integer linear programming (ILP) models for kidney exchange, showing how to model optimisation problems involving only cycles and chains separately. This allows new combined ILP models, not previously presented, to be obtained by amalgamating cycle and chain models. We present a comprehensive empirical evaluation involving all combined models from this paper in addition to bespoke software packages from the literature involving advanced techniques. This focuses primarily on computation times for 49 methods applied to 4320 problem instances of varying sizes that reflect the characteristics of real kidney exchange datasets, corresponding to over 200,000 algorithm executions. We have made our implementations of all cycle and chain models described in this paper, together with all instances used for the experiments, and a web application to visualise our experimental results, publicly available. "

 

"The first papers to study algorithms or mechanisms for KE-Opt were the landmark papers of Roth et al., 2004, Roth et al., 2005. When the objective is to maximise the number of transplants, KE-Opt is 
-hard in general (Abraham et al., 2007).

... 

 

"The main contributions of this survey paper are as follows:
 

•A detailed literature survey (with over 210 references) of OR approaches to KE-Opt, covering the following topics: algorithms and complexity for KE-Opt; hierarchical optimisation in KE-Opt; enabling equal access to transplantation; dynamic KEPs; uncertainty and robustness in KEPs; multi-hospital and international KEPs; recipients’ preferences; dataset generators and software tools; emerging topics; and other related surveys.
•A systematic exposition of all the key existing ILP approaches for KE-Opt, describing separately models for representing optimal solutions comprising only cycles from those comprising only chains. As a consequence, combined ILP models for KE-Opt can be obtained by mixing a cycle model with a chain model. We also use a running example (appearing in the Supplementary Material) to illustrate all models for the benefit of the reader. 

•A comprehensive empirical evaluation of all combined ILP models for KE-Opt that are described in this paper, together with “off-the-shelf” approaches involving advanced techniques such as column generation and branch-and-price, where we have been able to obtain and execute the third-party software. The main aim is to compare execution times of the different approaches considered on randomly generated datasets that reflect the characteristics of real data from the UK’s KEP. In particular, we tested 49 methods on 4320 instances, corresponding to over 200,000 algorithm executions, and amounting to over 10 years of computational processing time in total, across multiple cores running in parallel.
•An interactive tool to allow the reader to analyse the data resulting from our experiments that is publicly available at https://optimalmatching.com/kep-survey-2025, allowing custom heatmaps to be created by varying instance sets, models to be considered and measures of performance.
•All of the implementations of the combined cycle and chain ILP models presented in this paper are available for the reader to access at https://doi.org/10.5281/zenodo.14905243, and the benchmark instances used for the experiments are available for download at https://doi.org/10.5525/gla.researchdata.1878." 

The American demand for guns (and for non-lethal firearms), by Alsan, Schwartzstein, and Stantcheva

 The American market for guns is among the most complex of controversial markets, since gun purchases are regarded by many Americans as repugnant, while to many others (and in the eyes of the law*) they are protected. So the US debate about guns is conducted in a restricted space.

Here's a new paper that takes an unusually nuanced, empirical approach to understanding possible paths forward. In particular, it introduces non-lethal firearms into a survey and experiment. 

The Universal Pursuit of Safety and the Demand for (Lethal, Non-Lethal or No) Guns, by Marcella Alsan, Joshua Schwartzstein & Stefanie Stantcheva, NBER Working Paper 34962, DOI 10.3386/w34962, March 2026 

Abstract: "Lethal firearm ownership is deeply polarizing in the United States. We show that beneath this polarization, owners and non-owners share a common objective — safety — but disagree sharply about whether lethal firearms achieve it. Using an original survey of more than 5,400 respondents combined with randomized experiments, we document that owners feel safe and confident with firearms, while non-owners on balance feel less safe around them and perceive large private costs and social harms. Demand for lethal firearms is nonetheless potentially large and growing: one-third of non-owners express interest in acquiring one — these individuals report the lowest day-to-day safety — while very few owners would consider reducing their holdings. Persuading owners to relinquish firearms without any replacement appears unrealistic; the more tractable margins may be safe storage and non-lethal substitution for additional purchases. We organize these patterns through a framework centered on a perceived safety possibilities frontier (SPF) — the safety outcomes a household believes achievable with different combinations of lethal and non-lethal tools. Households may differ in firearm demand because they face different risk environments, weigh protective benefits against harms differently, or hold different beliefs about the frontier. Our descriptive evidence points to heterogeneous beliefs as important drivers, suggesting that levers such as information could shift the perceived frontier. These patterns motivate three experimental treatments: one on the private legal/medical costs of lethal firearm ownership, and two on a non-lethal firearm (NLFA), with and without a conservative pundit’s endorsement. The private-cost treatment increases concern about harms among all respondents and support for safe storage policies, and modestly raises stated willingness to keep lethal firearms locked. NLFA treatments raise willingness to pay for an NLFA, to keep lethal firearms locked, and support for incapacitating over lethal firearms and for policies encouraging NLFAs. These effects are largely persistent. Importantly, NLFA information does not increase willingness to reduce lethal firearm ownership but does increase willingness to store lethal firearms safely. Our results suggest that many owners perceive the SPF differently from nonowners, neglecting harms or less-lethal alternatives, yet remain open to such tools. Overall, individuals share a common goal — safety — yet disagree about the means. Although these disagreements appear entrenched, people remain receptive to alternatives that might command broader agreement."

 

#########

*The 2nd Amendment to the Constitution says 

"A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed." 

 (Only the part in bold seems, to my unlawyerly eyes, to have played much part in American jurisprudence.)

The innovative supply chain of illegal drugs--even in prisons

 Strategy sets are big, so we’re not going to be able to end illegal drug use by spraying defoliants on fields of poppies, or arresting dealers, or attacking speedboats. If we can’t stop the spread of drugs even in prisons, the chance of purely police/military solutions for stopping drugs on the streets isn’t looking good.

The NYT has the story:

No Pills or Needles, Just Paper: How Deadly Drugs Are Changing
Lab-made drugs soaked into the pages of letters, books and even legal documents are being smuggled behind bars, killing inmates and frustrating investigators. By Azam Ahmed and Matt Richtel 

" Today, fringe chemists are ushering in a total transformation of the illicit drug market. Operating from clandestine labs, they are churning out a dizzying array of synthetic drugs — not only fentanyl, but also hazardous new tranquilizers, stimulants and complex cannabinoids. Sometimes, several unknown drugs appear on the streets in a single month. Many are so new they are not even illegal yet.

"Nearly all of them are harder to trace than conventional drugs, less expensive to produce, much more potent and far deadlier, according to scientists and law enforcement officials across the globe.

...

"After that first death in the Cook County jail in January 2023, it took months for Mr. Wilks’s team to realize that these mysterious new drugs were being sprayed onto the pages of the most innocuous-seeming items: books, letters, documents, even photographs.

"The sheets of drugs, worth thousands of dollars a page, were being torn into strips and smoked by inmates 

...

"But the traffickers were cunning. When regular mail got checked more closely, smugglers began lacing legal correspondence. Soon, officers discovered sealed packages that looked as if they had been shipped directly from Amazon, with drug-soaked books inside. "

############

It’s hard to shut down markets that people want to participate in.
Someone should write a book about this.