Tuesday, January 1, 2019

Economists as heroes (in new German book...)

Iconomix has a review of
├ľkonomen sind Superhelden (Economists are superheroes)

"In his book, business journalist Malte Buhse shows how economists and economists hunt down criminals and save lives.
"Economists are modern superheroes and do outstanding things:
  • Harvard economist Melissa Dell, for example, has used network research to simulate Mexican smuggling drug trafficking routes, giving investigators the most cost-effective transportation routes for drug trafficking. On the routes recommended by the model, the investigators were indeed successful.
  • A similar problem was tackled by economists Eliana La Ferrara and Stefano Della Vigna with a completely different approach: to track down illegal arms transports, researchers tracked share price movements of smaller arms manufacturers and combined these data with the course of civil wars in countries such as Angola or Liberia. If the courses turned up after certain events, this aroused the suspicion of arms smuggling. Customs officials used this data to help enforce the arms embargo.
  • An economist-superhero who won the Nobel Prize for his work is Alvin Roth. He has designed a market system that can help people with incurable kidney disease get a life-saving transplant. Often there is the problem that the patients find a donor-willing person in the immediate environment, but these are not considered as a donor due to the blood type. The market solution now is that such donor pairs are brought together and the relatives donate the kidney for the stranger - so to speak, crosswise. Thus, life can be saved with simple economic considerations."

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