Thursday, March 31, 2022

National Living Donor Assistance Center (NLDAC) support for lost wages and dependent care

 NLDAC, the National Living Donor Assistance Center, is spreading the word on the new ways it can reimburse expenses incurred by living organ donors who meet a means test and have no other sources of support.  Here are two relevant pages from their recent brochure:

Earlier post (in connection with which matching budget increases have since come through):

Wednesday, March 30, 2022

Matching refugees to homes: Oxford celebrates Alex Teytelboym's work with HIAS

Here's a timely short video from Oxford celebrating Alex Teytelboym's work with the venerable refugee resettlement organization HIAS



Monday, April 29, 2019

Tuesday, March 29, 2022

Two courses on matching and market design in Stanford's MS&E department, by Ashlagi and Saberi (first meeting is today)

Itai Ashlagi and  Amin Saberi are offering courses on matching theory and market design this quarter. First meetings are today, in the morning and in the afternoon:

MS&E 230: Market design for engineers

Itai Ashlagi  T-Thu 9:45-11:15

Course description:  Marketplaces use algorithms and sets of rules in order to allocate resources among self-interested agents, who often hold necessary information. This course will provide key principles in engineering a marketplace, to identify relation between the rules in the marketplace and market failures, and how to redesign them to achieve desirable outcomes.  The course provides foundations of resource allocation systems building on game theoretic analysis.  The course explores economic and algorithmic tools from matching, mechanism design, auction theory and information design. Cases of existing and future marketplaces will be discussed, including ride-sharing systems, school choice programs, online dating, online advertising and organ allocation.

Some applied questions include: How should we assign students to schools? How should we match doctors to residency programs? Shall we price roads and the impact of tolls? How should we allocate affordable housing and arrange waiting lists? How should we incentivize hospitals to collaborate on kidney exchanges? How should we allocate food to food banks? How should reduce organ discards?  How can we assist in migration?  Why is some marketplace decentralized (college admissions) and others are more controlled? How should platforms set incentives? What incentives and frictions arise in blockchains? 


MS&E 319: Matching Theory
Amin Saberi  
T Th 01:30p-03:00p

The theory of matching with its roots in the work of mathematical giants like Euler and Kirchhoff has played a central and catalytic role in combinatorial optimization for decades. More recently, the growth of online marketplaces for allocating advertisements, rides, or other goods and services has led to new interest and progress in this area.  

The course starts with classic results characterizing matchings in bipartite and general graphs and explores connections with algebraic graph theory and discrete probability. Those results are complemented with models and algorithms developed for modern applications in market design, online advertising, and ride-sharing.

Topics include: 

Matching, determinant, and Pfaffian

Matching and polynomial identity testing
Isolating lemma and matrix inversion, matching in RNC

Combinatorial and polyhedral characterizations 
The assignment problem and its dual, primal-dual, and auction algorithms
Tutte’s theorem, Edmond’s LP, and the Blossom algorithm

The Gallai-Edmonds decomposition, Berge-Tutte formula, and applications in Nash bargaining

The stable marriage problem
Gale-Shapley theorem, incentive and fairness issues
LP characterization, counting stable matchings

Matching in dynamic environments
Online matching under various arrival models
Applications in ride-sharing and online advertising


Computation of matching  

Combinatorial vs continuous algorithms, near-linear time algorithms

Matchings in sub-linear time, streaming computational models

Sparsifiers and stochastic matching 

Counting matchings  
The Van der Waerden conjecture, Bregman-Minc’s inequality
Deterministic approximations, counting matchings in planar graphs
Markov chain Monte Carlo algorithms, sequential importance sampling
The Ising model, applications, and basic properties




Monday, March 28, 2022

Pay for the last period of repeated game experiments with stationary probability of ending, by Chandrasekhar and Xandri

 Here's a recent paper by Arun Gautham Chandrasekhar & Juan Pablo Xandri on how to preserve stage-game payoffs in an experiment implementing a repeated game that ends with a fixed probability after each stage. They show that paying participants for all periods, which works for risk neutral players, isn't as robust as playing for the (randomly determined) last period only.

 A note on payments in the lab for infinite horizon dynamic games with discounting. Economic Theory (2022).

Abstract: "It is common for researchers studying infinite horizon dynamic games in a lab experiment to pay participants in a variety of ways, including but not limited to outcomes in all rounds or for a randomly chosen round. We argue that these payment schemes typically induce different preferences over outcomes than those of the target game, which in turn would typically implement different outcomes for a large class of solution concepts (e.g., subgame perfect equilibria, Markov equilibria, renegotiation-proof equilibria, rationalizability, and non-equilibrium behavior). For instance, paying subjects for all rounds generates strong incentives to behave differently in early periods as these returns are locked in. Relatedly, a compensation scheme that pays subjects for a randomly chosen round induces a time-dependent discounting function. Future periods are discounted more heavily than the discount rate in a way that can change the theoretical predictions both quantitatively and qualitatively. We rigorously characterize the mechanics of the problems induced by these payment methods, developing measures to describe the extent and shape of the distortions. Finally, we prove a uniqueness result: paying participants for the last (randomly occurring) round, is the unique scheme that robustly implements the predicted outcomes for any infinite horizon dynamic game with time separable utility, exponential discounting, and a payoff-invariant solution concept."

"Infinite horizon dynamic games are typically implemented in the lab using the random termination method and paying for all rounds or a random round. Typically, a participant plays a round of a game which then continues to the subsequent round with a given probability (Roth and Murnighan 1978). To incentivize behavior, the experimenter pays the participant as a function of the history of play. The central problem is that in the lab payments are made after the experiment and therefore not consumed between stages of the game (as they would be in the realm of the model). Experiments in the literature, following Murnighan and Roth (1983), usually pay subjects for all rounds. More recently Azrieli et al. (2018) systematically catalogue work in a collection of top journals and show that 56% pay for all rounds and 37.5% pay for one or several randomly chosen rounds.

"Paying for all rounds is only valid when agents are assumed to be risk neutral (Murnighan and Roth 1983). While a section of the literature is interested in worlds respecting risk-neutrality, paying individuals for all rounds was (and often is) standard even when the models being tested explicitly deviated from risk neutrality. This lead to a dissonance between the theoretical ambitions and experimental implementation of such work. Indeed, Azrieli et al. (2018) document that 48% of the papers they examine do not justify their payment scheme in the given experiment whatsoever/


"In Sect. 3, we introduce and study the scheme wherein individuals are paid for the last round in a random-termination dynamic game. It implements all such models.2 The reason why this works is due to the (standard) observation that when we have exponential discounting, myopia with respect to the future is isomorphic to random termination of the game with some probability.3 Further, we show that in fact last round payment is the unique payment scheme that implements the game robustly. What this means is that for a given environment, one can find some agent and some history where for some preference (e.g., small amounts of curvature in some cases) the scheme fails to implement the target game. That is, the preference ordering for the agent in that situation is muddled and does not reflect that within the target game.

"Next, in Sect. 4, we provide a rigorous analysis of two payment schemes used in the literature – either payment for a randomly chosen round or all rounds – and show how these may induce games different from the target game."

Sunday, March 27, 2022

Guns (concealed carry) and marijuana (recreational): two US maps

 In both maps, brown is the color of permissiveness.  E.g. on the northern border, only Maine and Montana don't require permits/prescriptions for either guns or marijuana...

The gun map is from this Washington Post story: Nearly half the country requires no permit to carry a concealed weapon — and it’s a growing trend By Kim Bellware


Saturday, March 26, 2022

Queuing for ridesharing and organ allocation

 Queues for ridesharing drivers at airports (where some trips are much better than others) lead to lots of rejected trips by those at the head of the line, while they wait for a good one.  This is of course something that also occurs in deceased donor waiting lists.

Here's a paper that tackles the ridesharing problem:

Randomized FIFO Mechanisms by Francisco Castro, Hongyao Ma, Hamid Nazerzadeh, Chiwei Yan

Abstract: "We study the matching of jobs to workers in a queue, e.g. a ridesharing platform dispatching drivers to pick up riders at an airport. Under FIFO dispatching, the heterogeneity in trip earnings incentivizes drivers to cherry-pick, increasing riders' waiting time for a match and resulting in a loss of efficiency and reliability. We first present the direct FIFO mechanism, which offers lower-earning trips to drivers further down the queue. The option to skip the rest of the line incentivizes drivers to accept all dispatches, but the mechanism would be considered unfair since drivers closer to the head of the queue may have lower priority for trips to certain destinations. To avoid the use of unfair dispatch rules, we introduce a family of randomized FIFO mechanisms, which send declined trips gradually down the queue in a randomized manner. We prove that a randomized FIFO mechanism achieves the first best throughput and the second best revenue in equilibrium. Extensive counterfactual simulations using data from the City of Chicago demonstrate substantial improvements of revenue and throughput, highlighting the effectiveness of using waiting times to align incentives and reduce the variability in driver earnings."

"Many ridesharing platforms now maintain virtual queues at airports for drivers who are waiting in  designated  areas,  and  dispatch  drivers  from  the  queue  in  a  first-in-first-out  (FIFO)  manner.4 This resolves the congestion issues and is also considered more fair by many since drivers who havewaited the longest in the queue are now the first in line to receive trip offers.  At major U.S. airports,however, a driver at the head of the queue will receive the next trip offer in a few seconds under FIFO dispatching, if she declines an offer from the platform (see Figure 12).  As we shall see, thislowered cost of cherry-picking substantially exacerbates existing problems on incentive alignment.


"During busy hours, instead of accepting an average trip, drivers who are close to the head of the queue are better off declining most trip offers and waiting for only the highest earning trips.  Riders, however, have finite patience, despite being willing to wait for some time for a match.  When each driver decline takes an average of 10 seconds, 2 minutes had passed after a trip with low or moderate earnings (e.g.  trips to downtown Chicago) was offered to and declined by the top 12 drivers in the queue.5 At this point, it is very likely that the rider cancels her trip request, not knowing when a driver will be assigned, if at all.


"To  achieve  optimal  throughput  and  revenue  without  the  use  of  an  unfair  dispatch  rule,  weintroduce a family ofrandomized FIFO mechanisms.  A randomized FIFO mechanism is specifiedby a set of “bins” in the queue (e.g., the top 10 positions, the 10th to 20th positions, and so on).Each trip request is first offered to a driver in the first bin uniformly at random.  After each decline, the mechanism then offers the trip to a random driver in the next bin.  By sending trips gradually down the queue in this randomized manner, the randomized FIFO mechanisms appropriately align incentives using waiting times,  achieving the first best throughput and second best net revenue: the option to skip the rest of the line incentivizes drivers further down the queue to accept trips with  lower  earnings;  randomizing  each  dispatch  among  a  small  group  of  drivers  increases  each individual driver’s waiting time for the next dispatch, thereby allowing the mechanism to prioritize drivers closer to the head of the queue for trips to every destination without creating incentives for excessive cherry-picking."

Friday, March 25, 2022

Scott Kominers on entrepreneurial market design (podcast)

 Scott Kominers is interviewed on the Things to Know podcast, about the arc of his career, and how it led him to market design, and crypto, NFTs, and beyond.

"Market design is a sort of wrapper around economics..."


Thursday, March 24, 2022

Practical market design and public policy

 Market designers who want to influence practice have some things in common with makers of public policy. Here are some reflections, in Nature, by Chen Chien-jen, a distinguished epidemiologist who recently finished a term as Vice President of Taiwan.

Taiwan’s pandemic vice-president — from lab bench to public office and back. Successful policy and preparedness require more diverse evidence than researchers often encounter. by Chen Chien-jen

"The first lesson: scientific training teaches us to seek out all the variables that might affect a system. My work as a minister taught me to expand that list of variables far beyond what is typical. Budgets, laws, staffing levels and more enter the picture. So do values and priorities.


"The second lesson: science is never enough to bring about a thriving society. That takes trust, robust institutions and social cohesion


"The third lesson: infectious and toxic agents have impacts that last for decades, so long-range investments in scientific infrastructure pay off. But action must be quick.


"For treatments to be effective, patients must receive them, which depends on where they are offered, what patients have to pay and what makes them inconvenient and uncomfortable."

Wednesday, March 23, 2022

U.S. kidney transplant statistics for 2020

 Here's a recent report in the American Journal of Transplantation: 

OPTN/SRTR 2020 Annual Data Report: Kidney

K. L. Lentine,J. M. Smith,A. Hart,J. Miller,M. A. Skeans,L. Larkin,A Robinson,K. Gauntt,A. K. Israni,R. Hirose,J. J. Snyder First published: 10 March 2022

Abstract: "The year 2020 presented significant challenges to the field of kidney transplantation. After increasing each year since 2015 and reaching the highest annual count to date in 2019, the total number of kidney trans- plants decreased slightly, to 23642, in 2020. The decrease in total kidney transplants was due to a decrease in living donor transplants; the number of deceased donor transplants rose in 2020. The number of patients waiting for a kidney transplant in the United States declined slightly in 2020, driven by a slight drop in the number of new candidates added in 2020 and an increase in patients removed from the waiting list owing to death-important patterns that correlated with the COVID-19 pandemic. The complexities of the pandemic were accompanied by other ongoing challenges. Nationwide, only about a quarter of waitlisted patients receive a deceased donor kidney transplant within 5 years, a proportion that varies dramatically by donation service area, from 14.8% to 73.0%. The nonutilization (discard) rate of recovered organs rose to its highest value, at 21.3%, despite a dramatic decline in the discard of organs from hepatitis C-positive donors. Nonutilization rates remain particularly high for Kidney Donor Profile Index ≥85% kidneys and kidneys from which a biopsy specimen was obtained. Due to pandemic-related disruption of living donation in spring 2020, the number of living donor transplants in 2020 declined below annual counts over the last decade. In this context, only a small proportion of the waiting list receives living donor transplants each year, and racial disparities in living donor transplant access persist. As both graft and patient survival continue to improve incrementally, the total number of living kidney transplant recipients with a functioning graft exceeded 250,000 in 2020. Pediatric transplant numbers seem to have been impacted by the COVID-19 pandemic. The total number of pediatric kidney transplants performed decreased to 715 in 2020, from a peak of 872 in 2009. Despite numerous efforts, living donor kidney transplant remains low among pediatric recipients, with continued racial disparities among recipients. Of concern, the rate of deceased donor transplant among pediatric waitlisted candidates continued to decrease, reaching its lowest point in 2020. While this may be partly explained by the COVID-19 pandemic, close attention to this trend is critically important. Congenital anomalies of the kidney and urinary tract remain the leading cause of kidney disease in the pediatric population. While most pediatric de- ceased donor recipients receive a kidney from a donor with KDPI less than 35%, most pediatric deceased donor recipients had four or more HLA mis- matches. Graft survival continues to improve, with superior survival for living donor recipients versus deceased donor recipients."

Tuesday, March 22, 2022

Transplant coordinators

 Those of us adjacent to kidney exchange know that transplant coordinators are heroes, and I'm reminded of that by some recent news stories.

This is one, from YNET, by Tamar Ashkenazi, who runs the Israeli transplant organization. Transplant coordinators are nurses, and these flew to the Ukraine-Polish border to help care for refugees in transit:

Meet Israeli organ transplant coordinators who rushed to aid Ukrainian refugees  b yDr. Tamar Ashkenazi

"Among the earliest delegations Israel sent to Ukraine was one consisting of a group of organ transplant coordinators, who refused to remain neutral in the wake of the horrors of war. 


And here are some stories about Charles Bearden, one of the first transplant coordinators in the U.S.:

Life-saving matchmaker By KEN BECK For the Grundy County Herald

"Bearden, the longest-practicing organ transplant coordinator in the U.S., has observed a world of changes in organ transplants since he began his career in the 1970s."


Transplant coordinator Charles Bearden has placed nearly 3,000 organs  by KEN BECK

"Organ transplant coordinators typically work 24-hour shifts 15 days a month. If Bearden makes it to the end of 2022, he will have fulfilled that role 45 years."


 And here's an old post containing a poem by Marisol Robles (one of the first kidney recipients in a global kidney exchange) about Susan Rees, the transplant coordinator for the Alliance for Paired Kidney Donation:

Thursday, November 3, 2016

Monday, March 21, 2022

Economics in a war zone: Tymofiy Mylovanov interviewed by Scott Kominers

 What's the first thing an economist has to think about when his country is invaded?  Supply chains.

Scott Kominers interviews Tymofiy Mylovanov, via Twitter, at Bloomberg.

How a Ukrainian Economist Is Fighting the Russians. Since the bombs started to drop, Kyiv School of Economics President Tymofiy Mylovanov has been working on the nightmare logistics of humanitarian aid in a war zone. By Scott Duke Kominers

"For the past three weeks Tymofiy Mylovanov, president of the Kyiv School of Economics in Ukraine, has been witnessing the effects of Russia’s invasion of Ukraine firsthand -- working from within a war zone to bring desperately needed medical supplies to the country. Mylovanov, an economics professor and former minister of Economic Development, Trade and Agriculture for the Ukrainian government, is directing fundraising and other aid efforts from his base in Lviv in western Ukraine. 


"Mylovanov: If you want to get something done during war, it must be project-based. A lot of people are just completely lost. People have all kinds of ideas that the government has to do something, or someone else has to do something, and so they don’t do anything. You really have to focus on a specific project and the entire logistical supply project chain. We rely a lot on trust. And this trust was developed over the last eight years. I started working with Ukraine in 2014. I was at [the University of Pittsburgh] when the invasion of Crimea happened and I felt I had to get engaged with Ukraine. And I developed some expertise on how things work in extreme circumstances. So that helps me a little bit now. For example, we knew what to do with finances. In 2014, I raised $50,000, and a lot of academics were giving me checks of $1,000, $2,000 just to help Ukrainians in 2014. And none of it was wasted.

"We don’t need food or paper towels. What the army needs is munitions and people need medical supplies, specific medical supplies. Most people die from blood loss after a cluster bomb or after some kind of ballistic missile falls.  There may be 20 or 200 people wounded. It’s a little bit like when an airplane cabin loses pressure, the masks fall down — and what you need to do is to put the mask on yourself and then help others. So in this case, the mask analogy is a medical kit, which allows you to stop bleeding. So you really have to ensure that you are not bleeding, and then that people next to you are not bleeding.

"So you have to have a lot of these medical kits, and they usually cost 10 or 20 bucks. But now of course they cost 100 bucks because it’s surge pricing and no one can deliver. So we are trying to focus on this specifically. Civilian authorities need them and even railroads are asking for these medical kits because evacuation trains get shelled and people die without this specific kit. We will deliver them. We have connections, there’ll be no [extra overhead charges]. It doesn’t get stolen on the way. And [your donation] is also tax deductible in the U.S. So for $100, you’ll save a life and get your taxes back.

"So that’s what we are doing. But the first thing is to make sure we can pay [for supplies]. Because it’s wartime, there are capital controls and no one can make payments [in the usual way]. So you have to figure out how we’re going to pay. Then you need to figure out how you’re going to collect [fundraising] money. You need to figure out how to do crypto. So I am [talking to] European currency exchanges and charitable foundations and [universities] in the U.S. and Ukraine and the central bank of Ukraine and other banks and CEOs to ensure that the financial monitoring [for sanctions] doesn’t stop me because it’s all automatically blocking everything.

"And you need to get suppliers. In war, there are so many intermediaries and fees. So you have to establish a procurement department to figure out who is serious. Once you have suppliers, you have to figure out all the [wartime] export licenses,  all these government regulations. And of course things get stolen on the way. For example, one large, well-known American charity sends 95 pallets of medical supplies to Ukraine. When it arrives, it’s only two pallets because 93 of them got stolen somewhere. Not in Ukraine — either in Poland or even in New Jersey. So you have to watch for this. You actually have to put your own people in Warsaw or in New Jersey, in Israel, in Sweden, to check what has been loaded at every point so that it doesn’t get stolen. It’s a logistical nightmare. And when you finally get it to Ukraine, people are shooting at you at checkpoints.


"All the fundraising goes directly to logistics. I have a website at the university of the charitable foundation [Kyiv School of Economics Humanitarian Relief Fund], and there is a Twitter post at my account. If I get a hundred dollars on that charitable foundation, it goes towards medical kits and it’s likely going to save a life."

Sunday, March 20, 2022

Surrogacy disrupted in Ukraine

Along with all the other stories of struggle and courage coming to us from the Russian invasion of Ukraine, are those about surrogates, surrogate agencies, and intended parents trying to complete the transaction by uniting parents with newborns.

The WSJ has the story:

Ukraine Is a World Leader in Surrogacy, but Babies Are Now Stranded in a War Zone By Isabel Coles

"In the basement beneath one apartment block in Kyiv, 19 newborns lie in plastic cots, their cries mingling with the blare of air-raid sirens warning of incoming Russian strikes.

"The war in Ukraine has prevented their biological parents, in Canada, Germany, France and elsewhere from claiming babies born via the country’s many surrogate mothers.

“The number is growing every day,” said Denys Herman, legal adviser to Ukraine’s largest surrogacy agency, BioTexCom. It works with 600 surrogate mothers, some of whom gave birth to the babies being kept there. They are currently in the care of Ukrainian nannies.

"As Russia ramps up a violent push to take strategic cities, the fate of hundreds of surrogate mothers carrying babies, and newborns, across the country is becoming increasingly perilous. Hundreds of expectant parents are struggling to reach them.


"Surrogacy is big business in the country. While commercial surrogacy is legal in the U.S., Ukraine is a more affordable option for many couples looking for surrogate mothers. The process costs $43,000 in Ukraine, compared with $130,000 in the U.S., according to a 2020 study conducted by Australia’s Monash University. That has helped turn Ukraine into the second-most popular international surrogacy destination after the U.S., according to the study."

Saturday, March 19, 2022

Unraveling and reneging in the summer internship market

 There are some costs to unraveling of offer dates, and some of them are borne by the companies that make very early offers. The WSJ has the story:

Summer Interns Jilt Companies as Better Offers Come Along. Some young professionals in training are job-hopping between internships before they even start, frustrating companies and campus career advisers.  By Lindsay Ellis

"Many college students are juggling multiple summer internship offers as companies try to lock in entry-level talent. So fierce is this year’s competition, recruiters and career advisers said, that some students are reneging on summer stints they accepted back in the fall as recruiters barrage them with interview requests and richer offers. Companies and colleges say reneging is still rare, but it is becoming more pervasive in the current recruiting frenzy.


"Some 15% of students who had accepted a 2022 internship offer in November said they were still “actively searching” for another offer, according to a survey of more than 100 students by research and analytics company Veris Insights.

"Corporate recruiters, including at Liberty Mutual Insurance Co. and General Mills Inc. , said more students are backing out of internship offers this year. Liberty Mutual said it is reviewing pay benchmarks. Other employers and campus career offices said some companies have boosted intern pay for certain in-demand students. Still more employers are stepping up contact with students between the time they accept offers and when they start jobs to keep them engaged.


"Students used to feel sheepish about backing out of offers, but Elizabeth Diley, campus talent acquisition leader at General Mills, said she has observed less remorse. The cereal and food maker usually hires about 150 interns each year; now it plans to over-hire, betting that some percentage of interns will renege on offers before their summer jobs start, she said.

"Companies typically recruit summer interns early in the academic year to lock in potential talent. The problem this year with commitments made months ago is that the hot job market is generating lots of new offers that can lure students away."

Friday, March 18, 2022

David Schmeidler (1939-2022)

My old friend David Schmeidler has just passed away. 

We met very shortly after I got my 1974 and moved to the University of Illinois, where he was a frequent visitor. He was already well known for his work on the nucleolus (a kind of cardinal centroid for games in characteristic function form with sidepayments, which is contained in the (ordinal) bargaining set). 

He was the very model of a modern major game theorist.  At the time we met, I remember being impressed by his breadth of interests, in connection e.g. with his paper with Elisha Pazner on fairness. I asked him how he viewed his work on fairness as connecting with his work on game theory, and as I recall he said something (briefly) to the effect that game theorists should be interested in all aspects of transactions.  I was impressed. (Decades later at dinner in our house in Boston, I told him that, and he replied "Later I decided that was all bullshit."  But I remained, and remain impressed.)

Here's a picture I took of him in 2014, speaking at a conference in Brazil organized by Marilda Sotomayor. 

David Schmeidler in Sao Paulo in 2014

He is probably best known today for his work on various models of non-expected utility theory. Here is David on Google Scholar.

 Here's a tribute to him published two years ago by Peter Wakker, who met him as a grad student in 1984, and recalls him as a man of few words, and big insights.

A Personal Tribute to David Schmeidler’s Influence by Peter P. Wakker Dans Revue économique 2020/2 (Vol. 71), pages 387 à 390

Some of his most important work is with Itzhak Gilboa, who speaks about their work here (video and transcript): Non-Bayesian Decision Theory

Itai Ashlagi recommends these of his papers:

Equilibrium points of nonatomic games,

The nucleolus of a characteristic function game

 Maxmin Expected Utility with a Non-Unique Prior,

Subjective probability and expected utility without additivity.  


Update: Ali Kahn and Mark Machina write perceptive short memories here: 

Thursday, March 17, 2022

Who is a person?

 The question of who is a person (in law, and in welfare economics) is sometimes vexing. Arguments about abortion focus on the personhood of a fetus. The growing possibility of successful transplants of pig organs into humans might be viewed with less optimism if we thought of pigs as people (and transplants from great apes would probably be repugnant because apes are uncomfortably close to being human).  In economic theory we often speak of Pareto improvements as those that raise the welfare of "everyone," with the assumption that the model takes care of specifying the full set of people we are concerned with.  As we make progress in artificial intelligence, we may find ourselves asking about the personhood of machines.

In the meantime, here's a New Yorker story about a lawsuit brought on behalf of an elephant in the Bronx zoo:

The Elephant in the Courtroom. A curious legal crusade to redefine personhood is raising profound questions about the interdependence of the animal and human kingdoms.   By Lawrence Wright

"The subject of the petition was Happy, an Asian elephant in the Bronx Zoo. American law treats all animals as “things”—the same category as rocks or roller skates. However, if the Justice granted the habeas petition to move Happy from the zoo to a sanctuary, in the eyes of the law she would be a person. She would have rights.

"Humanity seems to be edging toward a radical new accommodation with the animal kingdom. In 2013, the government of India banned the capture and confinement of dolphins and orcas, because cetaceans have been proved to be sensitive and highly intelligent, and “should be seen as ‘non-human persons’ ” with “their own specific rights.” The governments of Hungary, Costa Rica, and Chile, among others, have issued similar restrictions, and Finland went so far as to draft a Declaration of Rights for cetaceans. In Argentina, a judge ruled that an orangutan at the Buenos Aires Eco-Park, named Sandra, was a “nonhuman person” and entitled to freedom—which, in practical terms, meant being sent to a sanctuary in Florida. The chief justice of the Islamabad High Court, in Pakistan, asserted that nonhuman animals have rights when he ordered the release of an elephant named Kaavan, along with other zoo animals, to sanctuaries; he even recommended the teaching of animal welfare in schools, as part of Islamic studies. In October, a U.S. court recognized a herd of hippopotamuses originally brought to Colombia by the drug lord Pablo Escobar as “interested persons” in a lawsuit that would prevent their extermination. The Parliament of the United Kingdom is currently weighing a bill, backed by Prime Minister Boris Johnson, that would consider the effect of government action on any sentient animal.

"Although the immediate question before Justice Tuitt was the future of a solitary elephant, the case raised the broader question of whether animals represent the latest frontier in the expansion of rights in America—a progression marked by the end of slavery and by the adoption of women’s suffrage and gay marriage. 


"Having lost the chimpanzee cases in New York, Wise and his team armed themselves with dozens of friend-of-the-court briefs in support of personhood for Happy. One of them came from Laurence Tribe, the Harvard legal scholar. “It cannot pass notice that African Americans who had been enslaved famously used the common law writ of habeas corpus in New York to challenge their bondage and to proclaim their humanity, even when the law otherwise treated them as mere things,” Tribe wrote. “Women in England were once considered the property of their husbands and had no legal recourse against abuse until the Court of King’s Bench began in the 17th century to permit women and their children to utilize habeas corpus to escape abusive men. Indeed, the overdue transition from thinghood to personhood through the legal vehicle of habeas corpus must be deemed among the proudest elements of the heritage of that great writ of liberation.”

"A precedent that Wise particularly favors is a 1772 case in England concerning James Somerset, a Black man enslaved to Charles Stewart, a customs officer in Boston. When Stewart brought him to England, Somerset briefly escaped, and upon his recapture Stewart had him imprisoned on a ship bound for Jamaica, where he was to be sold on the slave market. English supporters of Somerset filed for a writ of habeas corpus to gain his freedom. The case came before Lord Mansfield, a consequential figure in the British legal tradition. Although slavery had not been legally endorsed in Britain, an estimated fifteen thousand enslaved people lived there, and hundreds of thousands lived in British territories. Recognizing Somerset as a legal person would not just liberate a single individual but set a precedent that could be financially ruinous for slaveholders. Mansfield declared, “Let justice be done, though the heavens may fall.” He ruled that slavery was “so odious” that common law could not support it.

“That was the beginning of the end of slavery, first in England, then at least in the northern part of the U.S.,” Wise said in Tuitt’s court.

“Did they actually say the person who was enslaved was a person?” the Justice asked.

“No, they said he was free, he had rights,” Wise responded. “A person is an entity who has the capacity for rights, any entity who has a right was automatically a person.”

Wednesday, March 16, 2022

Plasma donations at the border

Here's a WSJ story about the confluence of two controversial transactions, immigration and compensation for plasma donors.

Block on Blood-Plasma Donors From Mexico Threatens Supplies. U.S. officials say crossing border to donate for a fee isn’t allowed with a visitor visa  By Mike Cherney,  Renée Onque and Daniela Hernandez

"Pharmaceutical companies and U.S. officials are fighting over whether to allow people to cross the border from Mexico to be paid for giving blood plasma, a critical ingredient in treatments for some neurological and autoimmune diseases.

"Up to 10% of plasma collected in the U.S. usually comes from Mexican nationals who enter on visitor visas and are paid about $50 to donate, according to legal filings from pharmaceutical companies. Last June, U.S. border officials indicated they would stop the roughly 30-year practice because they viewed it as labor for hire, which isn’t allowed under a visitor visa.

"The pharmaceutical companies that collect plasma have asked federal courts in Washington, D.C., to overturn the decision, which came just as U.S. plasma donations were disrupted by the Covid-19 pandemic. Some companies have argued that the payment compensates donors for their time and commitment rather than for the plasma itself, and isn’t in exchange for any actual work.


"The U.S., which provides much of the global plasma supply, is one of the few countries that allows payments to plasma donors, and supporters of the policy say that helps to ensure enough plasma is collected. Two big plasma companies, Australia-based CSL Ltd. and Spain-based Grifols SA, have invested millions of dollars in collection centers near the U.S.-Mexican border.


"A spokesperson for U.S. Customs and Border Protection declined to discuss the litigation.


"The agency said pharmaceutical companies could increase payments to attract more domestic supply and that Mexicans could still donate plasma without getting paid."

Tuesday, March 15, 2022

Opioid prescription reductions and suicides

 Addictive drugs are repugnant, but painkillers are essential pharmaceuticals.  In an effort to reduce addiction, guidelines have been formulated that reduce prescription, and these sometimes backfire when applied to patients with unbearable pain.

The NY Times has the story:

What the Opioid Crisis Took From People in Pain  By Maia Szalavitz

"Though even some doctors are confused on this issue, addiction and physical dependence are not the same thing. Addiction, according to the National Institute on Drug Abuse, is compulsive drug seeking and use that occurs despite negative consequences. But pain patients like Mr. Slone are not considered addicted when medication improves their quality of life and the risks of side effects like withdrawal are outweighed by the relief medication offers.

"For people with chronic pain, research is only beginning to show how widespread the damage from opioid prescription cuts is. One study examined the medical records of nearly 15,000 Medicaid patients in Oregon who were taking long-term, high doses of opioids. Those whose medications were stopped were three and a half to four and a half times as likely to die by suicide compared to those whose doses were stable or increased. Another study, which included the medical records of over 100,000 people, found that drastically reducing a patient’s opioid dosage increased the risk of overdose by 28 percent and increased the risk of mental health crisis requiring hospitalization by 78 percent.

"Many opioid prescribing cuts were made under the auspices of guidelines published by the Centers for Disease Control and Prevention in 2016 to fight the overdose crisis. These guidelines recommend avoiding opioid prescriptions if at all possible and, when prescribing them for chronic pain, generally keeping the dosage below 90 morphine milligram equivalents, or M.M.E., per day 


"The C.D.C. is now updating those recommendations, admitting that the result has too often been unsafe changes in care.


"By 2019, the authors of the original guidelines warned in The New England Journal of Medicine that they were being misused, saying, “Unfortunately, some policies and practices purportedly derived from the guideline have in fact been inconsistent with, and often go beyond, its recommendations.” That year, the Food and Drug Administration cautioned that it had “received reports of serious harm,” including suicides, associated with patients who suddenly had their medication discontinued or abruptly reduced.

"But by then, states had passed legislation giving some of the recommendations the force of law. The National Committee for Quality Assurance, which provides standards for insurers, government agencies and medical organizations, made keeping doses within the guidelines into a metric — incentivizing doctors to taper or stop seeing high-dose patients. Insurers, pharmacy chains and government agencies also use the guidelines to inform restrictions, and law enforcement uses them when prosecuting physicians for running “pill mills.”

"If these policies had reduced the death toll, some might argue that they are warranted. But they have not. Measured by the number of prescriptions written per capita, medical opioid use rates in 2020 were down to levels last seen in 1993, before OxyContin marketing helped spark the crisis. However, overdose deaths are still increasing dramatically, driven by illegally manufactured synthetic opioids and many who formerly got pharmaceuticals from doctors and now resort to dealers."

Monday, March 14, 2022

Subscription as an advanced market commitment for new antibiotics

 Axel Ockenfels points me to the following discussion of a subscription model for antibiotics: governments would guarantee that they would "subscribe" to new antibiotics, providing payments even though the volume of prescribed doses might be small to prevent bacteria from adapting to it [see this earlier post on  The economics of antibiotics]

This is how to fight antibiotic-resistant superbugs with a simple subscription payment model  by Jeremy Farrar, Director, Wellcome Trust and Mads Krogsgaard Thomsen, Chief Executive Officer, Novo Nordisk Foundation

"A subscription model based on fixed annual payments in return for a sufficient antimicrobial product supply guarantee, de-linked from the volumes sold would offer manufacturers security and financial predictability."

"A few weeks ago, the Lancet published an analysis which concluded that global mortality associated with antimicrobial resistance (AMR) has been greatly underestimated, and that with 3,500 daily deaths being directly related to AMR, it is one of the leading threats to human health worldwide. The analysis covers more than 200 countries and is the most comprehensive study on the consequences of antimicrobial resistance to date." [see earlier post]


"Decades of antibiotic overuse and misuse, in people and in animals, has caused the emergence of “superbugs”, strains of bacteria resistant to existing medicine, leaving the world vulnerable and decades of medical progress being undermined.

"At the same time, the world has not seen the introduction of truly novel antibiotics for many years. Regrettably, an unsustainable innovation and payer ecosystem has caused the pipeline of drugs with new targets or mechanisms of action to dry up.


"Wellcome Trust and the Novo Nordisk Foundation have both been doing what we can to support vital antibiotic innovation, through our investments in CARB-X, the REPAIR Fund, and the AMR Action Fund. But while our investments have done much to shore up the early-stage pipeline, we now need governments to do their part and ensure that antibiotics can reach global markets – available, accessible, and affordable. With this in mind, we recently commissioned Boston Consulting Group and the World Economic Forum to produce a report with recommendations on how to address these remaining gaps in support for antibiotic R&D. The report provides a roadmap for global leaders to study and adopt.


"The resulting recommendation is to apply a subscription payment model as the way forward. Such a payment scheme is already being piloted in the UK and Sweden. The subscription model is based on fixed annual payments for a set period, in return for a sufficient antimicrobial product supply guarantee, and, crucially, de-linked from the volumes sold. Recently, this has been dubbed the ‘Netflix model of antibiotics’ or compared to safeguarding properties by investing in fire extinguishers, hoping that there will never be a need for them.

"The idea is not new, and political leaders have time and again made warm commitments to act to support antibiotic development. But now is the time to turn these into solid action and bring fresh political goodwill to get them implemented. In the US, the world’s largest pharmaceuticals market by some margin, legislators are currently considering such a subscription model. With the support of both political sides, the so-called PASTEUR ACT (The Pioneering Antimicrobial Subscriptions To End Up Surging Resistance) bill has been drawn up, precisely with the aim of creating more attractive conditions for the development of new antibiotics.

"The subscription model is advantageous compared to the current alternatives, as it offers manufacturers security in terms of their revenues as well as certainty in terms of the demand.

Sunday, March 13, 2022

Nondirected living liver donation in the U.S.

Nondirected kidney donation has been important in U.S. kidney transplants for some time.  Here's a report observing that nondirected living liver donation is picking up.

 Herbst, Leyla R. BA1; Herrick-Reynolds, Kayleigh MD1,2; Bowles Zeiser, Laura ScM1; López, Julia I. BA1; Kernodle, Amber MD, MPH1; Asamoah-Mensah, Awura1; Purnell, Tanjala MPH, PhD2; Segev, Dorry L. MD, PhD1,3,4; Massie, Allan B. PhD, MHS1,3; King, Elizabeth MD, PhD1; Garonzik-Wang, Jacqueline MD, PhD1; Cameron, Andrew M. MD, PhD1 The Landscape of Nondirected Living Liver Donation in the United States, Transplantation: March 2, 2022 - doi: 10.1097/TP.0000000000004065 

"Living donor liver transplants (LDLTs) including those from nondirected donors (NDDs) have increased during the past decade


"NDDs increased from 1 (0.4% of LDLTs) in 2002 to 58 (12% of LDLTs) in 2020. Of 150 transplant centers, 35 performed at least 1 NDD transplant.


"Liver NDD transplants continue to expand but remain concentrated at a few centers. Graft distribution favors female adults and pediatric patients with biliary atresia. Racial inequities in adult or pediatric center-level NDD graft distribution were not observed."

Saturday, March 12, 2022

Summer School for Computational and Experimental Economics, Universitat Pompeu Fabra, June 12-19, 2022

 Here's the announcement (more at the links):

Summer School for Computational and Experimental Economics, Universitat Pompeu Fabra, Spain, June 12-19, 2022

Graduate students and young faculty interested in computational and experimental economics are invited to attend this intensive 7-day summer school (which will include the two-day Workshop on Computational and Experimental Economics on June 13-14, 2022).

The summer school will be held from June 12 to June 19 at Beslab of Universitat Pompeu Fabra, Spain. The summer school includes the two-day Workshop on Computational and Experimental Economics on June 13-14, 2022.

The deadline for applications is April 15, 2022.


Guest lecturer

Conference on Economic Design, University of Padova, 9-11 June 2022

 Conference on Economic Design, University of Padova,    9-11 June 2022

Paper Submission Deadline: 15 March 2022

"The 12th Conference on Economic Design will be held  in person at the Departement of Economics and Management  of the  University of Padova in Italy on 9-11 June 2022. The conference  welcomes paper submissions from many different fields such as economics, political science, computer science and operation research. Subjects include but are not limited to auctions, matching, voting, social choice,  coalition formation, price formation, contest, fair division, contract, bargaining, negotiation, market design implementation, market design experiments, public goods experiments, behavioural mechanism design, health policy, robust mechanism design, matching in dynamic environments, etc. 

Keynote speakers: Oliver Tercieux, Vasiliki Skreta, Scott Duke Kominers.


Friday, March 11, 2022

Kidney transplant controversies on World Kidney Day

 Yesterday, March 10 was World Kidney Day, whose theme was "Kidney health for all."

I couldn't help noticing that reports in honor of WKD reflect some of the considerable controversy that exists about kidney transplants.

Here are two with opposite points of view on increasing access to kidney transplants, with special attention to kidney exchange.

First, from Abu Dhabi:

World Kidney Day: SEHA Kidney Care leads the way in ensuring kidney health for all

"A key area that SKC is spearheading is investing in opportunities to increase transplant activities, for patients locally and further afield.  SEHA’s recent collaborations with international organizations and the Department of Health – Abu Dhabi have ensured that it is prepared for an influx in transplant volumes, with an increased deceased donor activity from 3 donors in 2017 to 39 donors in 2021, and more opportunities for live donation with the start of a paired kidney exchange program in partnership with Alliance for Paired Kidney Donation. Through these partnerships, kidney transplants, often resulting in enhanced quality of life, are now a viable option for many patients here in the UAE. SEHA’s Transplant Program has performed more than 52 pediatric kidney transplants and almost 393 transplants in total since its inception.


And here, from the Pakistani newspaper Dawn, is an editorial that bemoans the prevalence of black market kidney transplants in Pakistan, and worries that increasing access to  kidney exchange will only increase the black market (as opposed to giving patients a safe and legal alternative to the black market). This is an opinion that seems to underlie the policies of a number of international transplant organizations.

Swap Transplants

"IRONICALLY, the Punjab government’s recent step in the effort to stop organ trafficking may well end up providing a shot in the arm to the illegal transplant racket. At a meeting chaired by the Punjab health minister, the provincial government has given its approval to a swap transplant plan which expands the living donor pool beyond immediate family members.


"Organ swap transplants, or paired exchanges, work by matching a recipient-donor pair that is medically incompatible, with another pair in a similar predicament. An organ ‘swap’ can then take place between the two pairs. However, these are only the bare bones of the procedure. It must be carried out according to strict ethical and clinical guidelines if it is not to open the floodgates for illegal transplants. Among these is the requirement that each recipient-donor pair must meet the eligibility criteria laid out in the law.


"Thus, while paired exchanges are an accepted method of addressing donor-recipient incompatibility, the level of oversight mechanisms needed to prevent abuse are daunting — even more so in an unequal society riddled with corruption. The first paired kidney exchange in Pakistan was performed in 2015 at the Sindh Institute of Urology and Transplantation in Karachi; only seven more have taken place since then — all at SIUT — partly because of the extreme diligence that the process calls for. The troubling fact is that most illegal transplants take place in Punjab; some were found to have been carried out surreptitiously in KP and Azad Kashmir by doctors from Punjab. The situation in recent years had improved considerably after several organ trafficking gangs were busted, again mostly in Punjab. Does the province have a system in place to ensure that unethical individuals do not use the organ swap programme as a cover for illegal transplants?"


And here's a recent BBC video, "Kidneys for Sale?" on the controversy about compensation for donors. I just saw it yesterday (HT David Klinowski) but was produced earlier this year. A number of people are interviewed, and Sally Satel makes the point that increasing access to legal, safe kidney transplants is a way of competing with and reducing the prevalence of black markets.

Thursday, March 10, 2022

David Bennet Sr., who lived for two months with a transplanted pig heart, RIP

 Xenotransplants from pigs are probably here to stay, but are also not quite here yet, and may not be for some time.

Yesterday's NY Times has the story:

Patient in Groundbreaking Heart Transplant Dies. David Bennett Sr. had received a heart from a genetically modified pig, a procedure that may yet offer hope to millions of Americans needing transplants.  By Roni Caryn Rabin, March 9, 2022

"The first person to have his failing heart replaced with that of a genetically altered pig in a groundbreaking operation died Tuesday afternoon at the University of Maryland Medical Center, two months after the transplant surgery.


"Mr. Bennett’s transplant was initially deemed successful. It is still considered a significant step forward, because the pig’s heart was not immediately rejected and continued to function for well over a month, passing a critical milestone for transplant patients.


The Times story also made mention of the complicated discussion about organ donation, in this case having to do with the recipient's checkered history, as discussed in this earlier story from the Washington Post:

The ethics of a second chance: Pig heart transplant recipient stabbed a man seven times years ago By Lizzie Johnson and William Wan, January 13, 2022


And while we're thinking of ethical objections, don't forget the pig, or the gene manipulation involved in raising a suitable pig. Here's a rundown from the BBC:

Three ethical issues around pig heart transplants By Jack Hunter, 11 January, 2022

Wednesday, March 9, 2022

Singapore court rules that only Parliament can approve gay sex

 The NY Times has the story, about a colonial era Singapore law that isn't presently leading to prosecutions, but remains on the books:

Singapore’s Latest Ruling on Gay Sex Is ‘Cold Comfort,’ Activists Say. Plaintiffs had hoped the Court of Appeal would overturn the colonial-era law. Instead, the top court said it was not “an architect of social policy” and that any change was up to Parliament.  By Richard C. Paddock

"The Singapore Court of Appeal, the country’s top court, declined Monday to overturn a law criminalizing gay sex, ruling that three men who brought challenges did not have legal standing because the government has pledged not to enforce the colonial-era law.

"Gay rights advocates had sought to overturn the law, known as Section 377A, arguing that it stigmatizes gay men and promotes discrimination. The law, enacted in 1938 during British rule, does not apply to women."

Tuesday, March 8, 2022

School Choice by Atila Abdulkadiroglu & Tommy Andersson

Here's a big new survey on school choice theory and practice:

School Choice  by Atila Abdulkadiroglu & Tommy Andersson, NBER working paper 29822

DOI 10.3386/w29822 ISSUE DATE March 2022 (forthcoming in the Handbook of the Economics of Education vol. 6).

Abstract: School districts in the US and around the world are increasingly moving away from traditional neighborhood school assignment, in which pupils attend closest schools to their homes. Instead, they allow families to choose from schools within district boundaries. This creates a market with parental demand over publicly-supplied school seats. More frequently than ever, this market for school seats is cleared via market design solutions grounded in recent advances in matching and mechanism design theory. The literature on school choice is reviewed with emphasis placed on the trade-offs among policy objectives and best practices in the design of admissions processes. It is concluded with a brief discussion about how data generated by assignment algorithms can be used to answer contemporary empirical questions about school effectiveness and policy interventions.

Some paragraphs from the conclusions:

"Parental choice over public schools has become a major part of education reform around the world. In the US alone, the proportion of the largest 100 schools districts with parental choice over public schools doubled between 2000 and 2016 (Whitehurst, 2017). Currently, parents in Belgium, England, Ireland, Italy, the Netherlands, Portugal, Sweden, Wales, and Northern Ireland have the right to or must choose a public or a private school at the primary, lower and upper secondary levels for their children. In fact, for the upper secondary level, only six European countries (Denmark, Greece, France, Cyprus, Malta and Turkey) do not have any type of school choice program and, instead, assign students to schools based on their place of residence (European Commission, 2020). Consequently, the demand for rigorous solutions for student assignment has been growing. Each school-choice program comes with its own institutional and political constraints, which opens the door for further research. In fact, most of the theoretical literature on school choice is motivated by real-life problems identified in the field.


"This chapter has focused on student assignment in school choice by taking preferences and priorities as exogenous. An equally important question concerns the welfare consequences of school choice. In particular, the models in the literature ignore probably one of the most important aspects of school choice: access to a school is determined not only by the ability to list the school in the application form, but also by admissions policies, such as neighborhood priority, and by means for traveling to the school. This makes both preferences and priorities endogenous. While wealthy families can choose affluent neighborhoods with good schools before going through the formal choice process, low income families are shut out of such residential choice. The matching models of school choice regularly ignore housing markets, families’ endogenous housing decisions and their impact on welfare. Recent advances in this direction have been made by studying school choice with competitive housing markets and a continuum of students. For example, in a fairly general model, Grigoryan (2021) offers a convincing theoretical argument in favor of school choice by showing that low income families are better-off under deferred acceptance in comparison to solely residence-based school assignment even when applicants are granted neighborhood priorities in deferred acceptance. Much work is still to be done both theoretically and empirically on that frontier.


" data generated by assignment algorithms can be used to answer most pressing empirical questions on school effectiveness and policy interventions.29 Seats in a school choice program are rationed by admissions priorities, such as neighborhood priority for pupils living within a certain distance from school, lotteries, student rankings at the school which may be based on an entrance examination, academic records, interviews and other criteria. Such rationing creates quasi-experimental variation in school assignment at unprecedented levels that can be used for credible evaluation of individual schools and of school reform models, such as charters, small schools, and voucher programs. A recent literature focuses on research design with data from centralized admissions and develops econometric techniques."

Monday, March 7, 2022

Sex Work: Last Week Tonight with John Oliver (HBO)

Laughing through the tears about the plight of sex workers, and the complicated and often ridiculous legal environment. (He notes that there are no Hallmark cards with which a sex worker can thank her arresting officer.)


Sunday, March 6, 2022

Kidneys on Kilimanjaro

 The Washington Post has the story

A group of organ donors is climbing Mount Kilimanjaro this week. They each have one kidney.  By Cathy Free

"“We thought, ‘How about if we use this climb to raise awareness and show everyone that you can still lead a healthy and active life if you donate a kidney?’ ” said McLaughlin, a former college soccer coach who lives in Seattle.

“It didn’t take long before we had 22 kidney donors signed up to make the trip,” he said.

"The group hopes the trek, which will begin Friday, will help dispel the notion that donors can’t live full lives with one kidney, said Kidney Donor Athletes founder Tracey Hulick, who donated a kidney to a stranger in May 2017.


"The group — which named its adventure the One Kidney Climb — hopes to reach Kilimanjaro’s 19,341-foot volcanic summit at sunrise on March 10, World Kidney Day."

Saturday, March 5, 2022

Antibiotic discovery and development (from caves, to clinical trials to clinics)

 The development of antibiotics is in the hands of big pharmaceutical companies, which can manage and afford large scale clinical trials of new candidates.

But antibiotics don't have to be discovered in the biochemistry lab. Nature is red in tooth and claw at the microscopic level as well as for larger living beings, and everyone out there has to fight off bacteria. So there are lots of natural anti-bacterial chemicals yet to be discovered (just as penicillin derives from a mold). And so spelunking naturalists have opportunities to find new micro-organisms with their own anti-microbial defenses. But then the particularly difficult economics of antibiotic development come into play.

Here's an old story about that from Popular Science:

Scientists are spelunking for cave gunk to fight superbugs. Deep in caverns around the world, bacteria are laboring to make antibiotics we can discover and use for ourselves. BY KATE BAGGALEY

“You start out with 10,000 candidate chemicals, and 12 years and a billion dollars later you might have one,” Lavoie says. “But you’ve got to have a place to start, so the more you find the better off you are.”


Here's a recent article exploring some of Medicare's opportunities to provide advance market commitments to pharma companies developing antibiotics.

Gandhi N, Schulman KA. New Medicare Technology Add-On Payment Could Be Used As A Market Support Mechanism To Accelerate Antibiotic Innovation. Health Aff (Millwood). 2021 Dec;40(12):1926-1934. doi: 10.1377/hlthaff.2021.00062. PMID: 34871069.

Abstract: Despite growing antibiotic resistance, the clinical drug development pipeline for antibiotics has been sparse largely because of an unsustainable business model. We illustrate three models to accelerate antibiotic development, using Medicare new technology add-on payments as a market support mechanism. The first two models subsidize drug development for Medicare beneficiaries, and the third model applies a payment for every patient with a resistant infection to essentially create a funding pool. We found that the reimbursement required to sustain research and development would range from $637 to $121,365, depending on the payment model and the incidence of the resistant infection in question. With a $300 million public research subsidy, the payment for an antibiotic would drop to between $273 and $10,396 per course. Our market support model could increase the likelihood of attracting private investment for antibiotic development

"To make the economics of the antibiotic market even more challenging, intravenous antibiotics are reimbursed as part of a fixed Medicare Severity Diagnosis-Related Group (MS-DRG) payment under the inpatient prospective payment system of the Centers for Medicare and Medicaid Services (CMS). This model of a fixed payment per patient directly incentivizes hospitals to prescribe older, lower-cost antibiotics over more expensive novel therapies.9 This situation for antibiotic therapies is in stark contrast to the oncology market, where hospitals earn a margin above the list price of outpatient oncology drugs.10 The oncology model accelerates the adoption of novel products, which suggests that manufacturers do respond to financial incentives in the market.


"A market support mechanism that is receiving increasing attention is applying existing CMS authority for new technology add-on payments (NTAP) to hospital payment for novel antibiotics and antifungal therapies. Under the NTAP model, hospitals receive a separate payment for administration of designated therapies in addition to the underlying MS-DRG payment. This program was developed to support payment for expensive new medical devices and is intended to be time limited while CMS recalculates the underlying MS-DRG payment to include the cost of the new technology. This technology carve-out model has existed since at least 2001, but new eligibility criteria may make it easier for antibiotics to qualify for it.


"In this article we assess the opportunity to evolve the NTAP program into a true market support mechanism (NTAP-MS), assessing how different payment models that build on the NTAP-MS approach affect incentives for antibiotic development."