Choice architecture in Britain: mandated choice for deceased donor registration

The BBC reports: Organ donated 'nudge' for drivers in new DVLA process

"The Driver and Vehicle Licensing Agency already asks if applicants want to be donors - but from Monday an online form will require that the answer is stated.

"Ministers hope it will help improve organ donation rates.

"Less than a third of people are signed up to be organ donors - despite research suggesting that nine in 10 would he happy to be one.

"The situation has prompted much debate in recent years about how best to improve rates.

"Some have called for presumed consent, where it is assumed an individual wishes to be a donor unless he or she has opted out by registering their objection.

"The government has so far rejected presumed consent and instead the Cabinet Office's behavioural insight team has suggested the driving licence idea as part of its "nudge" drive.

"The DVLA's existing scheme is already responsible for about half of the 1m new donor registrations each year.

"As well as becoming compulsory to answer the question, the section will be moved from the end to the start of the DVLA process, so when applicants from England, Wales and Scotland apply for new or replacement licences they will have to say whether they want to become an organ donor or not.

"When a similar scheme was introduced in the US state of Illinois, donor registration jumped from 38% to 60%."
*********

Whether mandated choice will improve organ donation rates (and not just registration rates) is an open question. But isn't it nice that the Cabinet Office has a behavioural insight team...  A tip of the hat to Sunstein and Thaler is in order.

My question about mandated choice is summarized in the following (somewhat out of context) paragraph from Kessler and Roth (forthcoming):

"A “mandated choice” system would also change the way in which individuals became registered donors (see Thaler and Sunstein 2008 and Thaler 2009). Under “mandated choice,” every individual who registered for a driver’s license (or potentially other state or federal documentation) would be required to indicate that he will be an organ donor or that he will not. While there is suggestive evidence that a “mandated choice” policy would (like “opt out”) generate more registration of organ donors (Johnson and Goldstein 2003, 2004), similar concerns arise about whether a change to mandated choice would lead to more donated organs and transplants. While the Uniform Anatomical Gift Act makes registering to be a donor legally binding under an “opt in” policy, failing to register as an organ donor is not a legally binding decision, whereas registering as a person who declines to donate could be legally binding on the next of kin. [Mandated choices could of course be framed so that a negative decision was merely recorded as a decision “not to register as a donor at this time,” but even this less binding formulation might inform next of kin’s beliefs about the deceased’s intentions and wishes.]  Discussions with the staff at the New England Organ Bank suggests that they are able to recover organs from about half of all non-registered potential donors in New England by approaching next of kin. This means that more than half of the people who are not currently registered under “opt in” would need to choose “yes” in mandated choice to increase the recovery rate. Consequently, it remains an empirical question whether a change to “mandated choice” would generate more organ transplants. 


(That's from
Kessler, Judd B. and Alvin E. Roth, ''Organ Allocation Policy and the Decision to Donate American Economic Review, forthcoming.)

Parking meters, old and new

Technology is coming to on-street parking. The NY Times reports on the changeover: The Last Days of the Old Parking Meter

"The city’s Transportation Department, which recently accelerated its meter retirement program, says the change will benefit city and citizen alike: the new meters read credit cards, speak seven languages, require less maintenance, and free up room on the sidewalk."

In Brookline, where I live, one can already begin to catalog some of the relative advantages and disadvantages of the old and new technologies, aside from those mentioned above, regarding credit cards in particular.

Waiting time and queues: old meters took your quarters immediately (if they were working well enough to take them at all); new meters take some time even if you are first in line, and since they serve multiple spots, you may have to wait while they take that time for the people ahead of you.

Parking at 7:45am: old meters made you start paying even if you rolled up to the curb before payment was required; new meters know that you don't have to pay until e.g. 8am, and so can sell you parking until 8:30 without charging you for the first 15 minutes until 8.

Adding time to the meter: old meters let you add another quarter to add time, e.g. if you glanced in at the coffee shop after you had already put money in the meter and noticed that there were no vacant tables, so you would have to go across the street, and wouldn't be back by 8:30.  New meters print a receipt for you to put on your dashboard, and don't let you add time to the end of the time interval you have already bought.

Other people must have noticed other advantages and disadvantages...

Misc. repugnant transactions

Sometimes some transactions are so repugnant that nothing but an armed response seems sufficient:

Multi-agency armed raid hits Rawesome Foods, Healthy Family Farms for selling raw milk and cheese
"A multi-agency SWAT-style armed raid was conducted this morning by helmet-wearing, gun-carrying enforcement agents from the LA County Sheriff's Office, the FDA, the Dept. of Agriculture and the CDC (Centers for Disease Control)."

HT: Zane Selvans
***********************

Workplace romance is often regarded as a repugnant transaction, and the rules that different universities try to enforce are varied. Inside Higher Ed reports:

"According to the American Association of University Professors,policies regarding relationships between students and professors vary across the country. Some institutions, such as the University of Michigan, do not expressly prohibit faculty-student relationships, but advise faculty members against them and require faculty members to notify superiors of relationships to avoid conflicts of interest. The University of Iowa prohibits faculty members from entering into romantic or sexual relationships with students they are instructing, evaluating, or supervising.
...
In recent years, several campuses have implemented “zero-tolerance” policies. In 2003, the University of California adopted a policy prohibiting romantic or sexual relationships between faculty members and students they are teaching or have a reasonable expectation of teaching in the future. Last year, Yale University adopted a policy expressly prohibiting relationships between faculty members and undergraduate students, regardless of whether there is any chance the professor will teach the student. “Undergraduate students are particularly vulnerable to the unequal institutional power inherent in the teacher-student relationship and the potential for coercion, because of their age and relative lack of maturity,” the policy states."
*************

Revisions to old laws against scalping tickets to sporting events (reselling them at much higher than face value) are under discussion in MA: For ticket resellers and fans, the game may be changing

"Massachusetts is one of five states with laws strictly limiting what resellers can charge. But with hundreds, maybe thousands, of outlets reselling tickets online and offline, the law is difficult to enforce. Plus, ticket scalping is viewed as a victimless crime.

"But by this time next year, legislation under consideration on Beacon Hill could, if passed, make the secondary market in Massachusetts a much different place for fans and licensed resellers. Some overhaul of ticket reselling regulations appears to have legislative support, but it is unclear what form it might take, or whether it would pass. Hearings are scheduled for this month.

One of the bills comes from state Representative Michael Moran, Democrat of Brighton, who has proposed legislation to make the secondary market fully legal - and perhaps more fan-friendly.

"The proposed law would remove most restrictions on reselling tickets, effectively uncapping the secondary market, and institute greater consumer protections regarding refund and cancellation policies."
*********
And finally:

England players warned about their behaviour after night out at 'dwarf-throwing' bar

"Headlines on Thursday morning alleged that Tindall, who recently married the Queen’s granddaughter, Zara Phillips, was acting inappropriately while drinking in a Queenstown bar last Sunday, where a “dwarf-throwing contest” was the primary entertainment."

If it were legal to sell organs for transplantation, what would the ads look like?

From time to time as I maintain this blog, I get a popup window from Google saying that since the blog appears to be popular I could make some money by showing ads from Google AdSense.  So far I have resisted, although an extra skim latte every week or so is tempting.

But I was recently on a site promoting deceased organ donation of transplantable organs. Apparently they are getting those lattes, since this ad appeared at the bottom of their site, giving a glimpse into an alternative universe in which organs are bought and sold:

Organ Sales & Service  We carry Lowrey & Roland Organs Service all brands 781-893-6644 www.MainStreetMusicBoston.com

And once you enter that alternative universe, you notice that even the WSJ could be there: this story (pointed out to me by Eric Budish) ran on Friday--
Trafficking in Organs, Mr. Bishop Pipes Up to Preserve a Bit of History  

""We think of ourselves, like the curator of a historical site or the park ranger at Paul Revere's house, as being stewards," says Mr. Bishop, the white-bearded, 56-year-old executive director of the Organ Clearing House, a Charlestown, Mass., company and part of a growing community of "organ rescue" operations."

Repugnance can be local: horse sausage in France

A repugnant (and even illegal) transaction in one place may be perfectly ordinary in another. Alex Peysakhovich recently came by with some horse meat sausage from a boucherie chevaline in France...

Speed of transactions in algorithmic finance

Markets suffer from congestion when there isn't enough time to make or evaluate all the offers that participants want to make. Even markets in which offers can be made very quickly can suffer from congestion, as I discovered years ago when I studied a labor market with about a six minute turnaround time between getting an offer rejected and making a new one.

In financial markets, the time required to make an offer is sometimes called the latency time, and it apparently can never be short enough: The New Speed of Money, Reshaping Markets

"In this high-tech stock market, Direct Edge and the other exchanges are sprinting for advantage. All the exchanges have pushed down their latencies — the fancy word for the less-than-a-blink-of-an-eye that it takes them to complete a trade. Almost each week, it seems, one exchange or another claims a new record: Nasdaq, for example, says its time for an average order “round trip” is 98 microseconds — a mind-numbing speed equal to 98 millionths of a second.

The exchanges have gone warp speed because traders have demanded it. Even mainstream banks and old-fashioned mutual funds have embraced the change.

“Broker-dealers, hedge funds, traditional asset managers have been forced to play keep-up to stay in the game,” Adam Honoré, research director of the Aite Group, wrote in a recent report.

"Even the savings of many long-term mutual fund investors are swept up in this maelstrom, when fund managers make changes in their holdings. But the exchanges are catering mostly to a different market breed — to high-frequency traders who have turned speed into a new art form. They use algorithms to zip in and out of markets, often changing orders and strategies within seconds. They make a living by being the first to react to events, dashing past slower investors — a category that includes most investors — to take advantage of mispricing between stocks, for example, or differences in prices quoted across exchanges.

"One new strategy is to use powerful computers to speed-read news reports — even Twittermessages — automatically, then to let their machines interpret and trade on them.

"By using such techniques, traders may make only the tiniest fraction of a cent on each trade. But multiplied many times a second over an entire day, those fractions add up to real money. According to Kevin McPartland of the TABB Group, high-frequency traders now account for 56 percent of total stock market trading. A measure of their importance is that rather than charging them commissions, some exchanges now even pay high-frequency traders to bring orders to their machines.

"High-frequency traders are “the reason for the massive infrastructure,” Mr. McPartland says. “Everyone realizes you have to attract the high-speed traders.”

A formerly repugnant sport

Recall that mixed martial arts are only slowly gaining acceptance. So it shouldn't be so surprising to read that professional football was once repugnant also. The New York Times reviews the book THE BIG SCRUM: How Teddy Roosevelt Saved Football by John J. Miller.

"On the first page of “The Big Scrum: How Teddy Roosevelt Saved Football,” John J. Miller’s informative account of Roosevelt’s impact on the sport’s early years, readers are taken back to 1876 and a contest between Harvard and Yale. It was the first game Roosevelt, then an 18-year-old Harvard freshman, ever attended, and it propelled him into a lifelong love of the sport. Its physical dangers, he thought, helped build character.

"Dangerous it certainly was. In its earliest forms, football veered toward the brutishness of English rugby, and by the time of Roosevelt’s presidency, it had resulted in a rash of player deaths (18 in 1905 alone). To save the game from those who wanted to abolish it completely, Roosevelt used the “bully pulpit” to push for enormous rules changes to improve safety. But he obviously had mixed feelings. In 1895 he wrote that he wanted to eliminate “needless brutality,” but that he would rather keep the game as it was than lose it completely."

Reverse fraternity and sorority rush at Princeton

Here's a Princeton news release about a decision to delay sorority and fraternity recruiting--"rush"--until after the freshman year: Princeton to ban freshman affiliation with fraternities, sororities as of fall 2012

"Beginning in the fall of 2012, Princeton University will prohibit freshmen from affiliating with a fraternity or sorority or engaging in any form of "rush" at any time during the freshman year.

The decision to institute the ban is being communicated this week to all returning Princeton undergraduates by President Shirley M. Tilghman, who made the decision based on recommendations from a student-faculty-staff working group on campus social and residential life that submitted its report last spring. The decision is being communicated to all entering freshmen and their families by Vice President for Campus Life Cynthia Cherrey and Dean of Undergraduate Students Kathleen Deignan.

In addition to prohibiting freshmen from affiliating with fraternities or sororities or engaging in the recruitment/membership process known as rush, the ban will prohibit students in the other three classes from conducting or having responsibility for any form of rush in which freshmen participate. As recommended by the working group, there will be no prohibition on membership in fraternities and sororities after freshman year, although the University will continue its longstanding policy of withholding official recognition for such organizations.

...

In their letter to entering freshmen, Cherrey and Deignan pointed out that for most of Princeton’s history, membership in fraternities and sororities was prohibited. These organizations began to reemerge at Princeton in the 1980s, although unlike at many other campuses, none of the fraternities or sororities at Princeton has houses. All Princeton freshmen and sophomores live on campus in residential colleges, as do some juniors and seniors, while most juniors and seniors take their meals at off-campus independent eating clubs while continuing to live in University housing.

...

Approximately 15 percent of Princeton undergraduates participate in four sororities and about a dozen fraternities.

*******************

The name "rush" comes from the unraveling of fraternity and sorority recruiting, which became earlier and earlier over time.  Here's an old paper on the subject:

Mongell, S. and Roth, A.E., "Sorority Rush as a Two-Sided Matching Mechanism," American Economic Review, vol. 81, June 1991, 441-464

The Receivables Exchange and the NYSE

I've been following The Receivables Exchange in several prior posts, and now the NYSE is interested too: today's WSJ reports NYSE Euronext Bulks Up In Market for Receivables.

"NYSE Euronext plans to boost its role in helping companies secure short-term funding, hiring a longtime GE Capital executive as part of an initiative that includes buying a stake in an electronic market for corporate receivables.

"The parent of the Big Board aims to use its investment in the New Orleans-based Receivables Exchange as another venue for public companies to borrow money, complementing the long-term funding provided via stock-market listings at a time when businesses face financing difficulties.

"NYSE has taken a minority stake in the four-year-old venture and hired Paul DeDomenico, previously chief executive of GE Capital's working-capital-solutions group, to lead the exchange group's corporate-receivables programs.

"The moves, which come amid a fierce political debate over bank lending to small-and-midsize businesses, could provide an advantage to the NYSE in its battle with competitors over share listings, by allowing the Big Board operator to offer a broader suite of services to companies that choose to list with it. And the moves provide an entry point to a market in receivables estimated by the companies at $17 trillion in size domestically.
...
"The Receivables Exchange formed in 2007 as a platform for companies to auction their accounts receivable to buyers like hedge funds and commercial banks. The eBay-like system lets sellers of receivables generate short-term cash quickly, while buyers can book a profit when debts are paid back.
...
"Upheaval in the corporate lending market has provided an opening for the company, where trading volumes of accounts receivable in its U.S. market for small-and-midsize businesses leapt nearly six-fold from 2009 to 2010.

"This year the value of receivables bought and sold on the platform is on pace to top $1 billion in value, according to Nic Perkin, the Receivables Exchange's president and co-founder.

A choice prediction competition for simple extensive form games

The following announcement was recently circulated, and might be of interest:

A Call for participation in a choice prediction competition for simple extensive form games

Dear Colleagues,

We write to invite you, and your students, to participate in a new choice prediction competition that is conducted as part of the special issue of the journal Games http://www.mdpi.com/search/?s_journal=games&s_special_issue=648

The competition focuses on the prediction of behavior in one-shot extensive form games. In these games a proposer chooses between action Out, which enforces “outside option” payoffs on the two players, and action In. If In is chosen then the responder determines the payoff allocation by choosing between action Left and action Right.  The competition is composed of two independent sub-competitions: one that predicts the proposer’s behavior and another that predicts the responder’s behavior.

The organizers first ran (in May 2010) an experimental study of 120 games that were randomly selected from a well-defined space of games. The raw experimental results of this study, referred to as the “estimation experiment,” are presented in the competition’s website (http://sites.google.com/site/extformpredcomp/home). In addition, the competition website includes the rules of the competition, and a link to a paper that summarizes the results of the estimation experiment and explores the value of several baseline models (https://sites.google.com/site/extformpredcomp/EEREFG.pdf)

The site explains that the goal of the participants in the competition is to predict the results of a second experiment. This study, referred to as the “competition experiment,” will be kept confidential until 2 December 2011. The competition experiment uses the same method as the estimation experiment, but studies different games (drawn from the same space of games) and different subjects.

You are invited to participate in the competitions, and/or to use it as one of the assignments to your students for the 2011 Fall semester (see details below).  To participate in the competition you will have to email us a computer program (in MATLAB, Visual Basic, or SAS) that reads the parameters of the games (the incentive structure) as input, and predicts the main results as output. The program should be an implementation of your favorite model. To develop and/or estimate your model you are encouraged to analyze the data of the estimation experiment, and to build on the baseline models that were posted in the competition website.  To use the competition as a class assignment you should follow the assignment instructions in the site https://sites.google.com/site/extformpredcomp/registration-1.

The submitted models will be ranked based on the mean squared deviation between the predictions and the results of the competition experiment.

The prize for the winners will include an invitation to publish a paper that describes the winning model in Games, and an invitation to a special workshop. The submission deadline for this competition is 1 December 2011. You are allowed to submit one model as a first author and to co-author up to two additional submissions.

Using the competition as a class assignment:
Professors who want to use the competitions as one of their class assignments are asked to contact us at gamespredcomp@gmail.com.  The professor will receive a course ID to give the students.  To be associated with a course, submissions will specify the course ID and the professor’s name. The models will be treated like any regular submission, except that the professor will also receive a copy of the models’ rankings assigned with his/her class ID.


Best Regards,
Eyal Ert, Ido Erev, and Al Roth

Beautiful work and the beauty premium

It pays to be beautiful, but it's risky to try to make it big on beauty alone.
That's the message from recent books and other work showing that good looking people earn more--there's a "beauty premium," but that a career in modeling is high risk.

Slate reviews Pricing Beauty, by BU's Ashley Mears, a book about an industry with a good looking work force, models and modeling agencies.

"Through interviews, Mears investigated the financial state of the (unnamed) small modeling firm she worked for in Manhattan. She found that 20 percent of the models on the agency's books were in debt to the agency. Foreign models, in particular, seem to exist in a kind of indentured servitude, she writes, often owing as much as $10,000 to their agencies for visas, flights, and test shoots, all before they even go on their first casting call. And once a model does nab a job, the pay is often meager. Mears herself walked runways, sat for photo shoots for an online clothing catalog, modeled for designers in showrooms, and went on countless unpaid casting calls. During her first year of research she worked mornings, evenings, and weekends around her graduate classes and earned about $11,000.
...
"The alternative to high-fashion poverty is to be a "money girl," working for catalogs and in showroom fittings, jobs that pay well and reliably. The best-paid model at Mears' agency, for instance, was a 52-year-old showroom model with "the precise size 8 body needed to fit clothing for a major American retailer. She makes $500/hour and works every day." But the commercial end of modeling is widely derided within the industry as low-rent, as mere work without glamour. Once a model has done too many commercial jobs, she is thought to have cheapened herself, and it's exceedingly difficult for her to return to high fashion."
**********
Over the last few years in economics, there have been a lot of studies about pricing beauty in the general work force, where there seems to be a premium for looking good.
See Dan Hamermesh's Beauty Research Papers, and his book Beauty Pays--Why Attractive People are More Successful

A nice experimental paper in the AER by Markus Mobius and Tanya Rosenblat, Why Beauty Matters, even shows that some of the beauty premium can be collected through telephone interviews in which the interviewer can't actually see how attractive the interviewee is. This suggests that some of the beauty premium may come from the increased self confidence that beauty bestows.

(Of course not only the beautiful can get the part of the premium available over the phone: this must be what people mean when they tell me I have a face for radio...:)

Things we cannot forget

9/11

http://www.september11news.com/AATower2ExplodeGettyImages.jpg

http://www.esquire.com/cm/esquire/images/fallingman-lg.jpg

Magic and market design

I was struck by some of Michael Trick's thoughts on Operations Research, and how they applied as well to Market Design: Explaining Operations Research to, and being, a Muggle.

Taking his cue from the Harry Potter novels, he writes:
"A wonderful aspect of working in operations research, particularly on the practical side of the field, is that you both work with Muggles and get to be a Muggle."
...
"Over the years, I have started as a Muggle about cell-phone production, sports scheduling, voting systems, and a number of other areas.  And I got to read about these areas, and talk to smart people about issues, and, eventually, become, if not a Wizard, then at least a competent student of these areas.

"Some fields are, by their nature, inward looking.  The best operations research is not, and that is a true pleasure of the field."

*********

There's some additional pleasures to being a market designer, aside from those of being both a novice among experienced market participants, and at the same time an economist among market participants who may not fully understand the forces buffeting their particular market. It has to do with the fact that economists and economics used to be confined to the study of existing markets, and now we sometimes get to help build them.

This reminded me of a different book about magicians, “Jonathan Strange & Mr Norrell:  A Novel” by Susanna Clarke.  The novel describes a world in which magic used to exist, but no longer does…until some new students of the craft come along.

“Mr Segundus wished to know, he said, why modern magicians were unable to work the magic they wrote about….

“The President of the…society…explained that the question was a wrong one.  ‘It presupposes that magicians have some sort of duty to do magic—which is clearly nonsense.  You would not, I imagine, suggest that it is the task of botanists to devise more flowers?  Or that astronomers should labour to rearrange the stars?  Magicians…study magic which was done long ago.  Why should anyone expect more?’ ”

Two-career couples and economic development (in Denmark)

Someone in Denmark is taking married couples seriously: Get help finding a job for your international employee’s partner

"There is a greater chance your international employee will stay in your organisation if his or her partner is also happy in Denmark. The best way to develop a network and a good social life is if the relocating partner is working during his or her stay in Denmark. Having a job is important for many relocating partners. Many partners are well-educated and bring experience from a previous career.

"If you wish to help your international employee, it is a good idea if your organisation helps the family to clarify how the relocating partner can find a job and to support their job hunt. A good starting point is to direct the relocating family to workindenmark.dk. In the Workindenmark job bank, the partner can find English job ads from Danish companies and create a profile in the cv-bank. You can also advice them to contact their regional Workindenmark-centre. Here, they can get professional help with their job-seeking, free of charge. They can attend seminars on how to write an application and CV which appeals to Danish employers and they can get individual guidance.

"If your organization wants to go the extra step to retain the international employee you can freely join Workindenmark's "Partner Link". Click here to read more about Workindenmark's "Partner Link".

HT: Stephanie Hurder

Instructions are part of a market's design

Whenever my colleagues and I help design a new marketplace, we're very aware that a part of the market mechanism are the instructions that accompany it. There's no reason to assume that the benefits of a strategy-proof mechanism, for example, will be realized if the participants aren't made fully aware that it is strategy-proof, so that it is safe for them to reveal their true preferences.

That is why I was glad when the HBS MBA program invited me to explain the modified serial dictatorship mechanism that Clayton Featherstone and I designed for the first year of operation of a 2nd year MBA field experience module, in which Harvard MBA students will choose countries in which to spend time at a company.  (We felt it was particularly important to start with a strategy-proof mechanism, for reasons we hope to write about in the not too distant future.)  Here's the video of my explanation (which can also be found at http://video.hbs.edu/videotools/play?clip=aroth_field2_algorithm or, if that is gated, http://stream.hbs.edu/remediated/cd/aroth_field2_algorithm.mp4)

While I think of it, let me mention that Clayton is an unusually talented and versatile market designer, theorist and experimenter who will be on the econ job market this year.

School choice around the U.S.: some short video interviews

Northwestern's journalism school has a project on school choice that allows you to click on a map of the U.S. and see very short (1 minute) clips of video interviews they did about school choice in the indicated cities:
 One size does not fit all

You can glimpse my filing system for journals in the background of interviews they did with me and Neil Dorosin of IIPSC about Boston, New York, and Denver...

Mechanism design conference: Copenhagen, Sept. 6-9.

WORKSHOP: NEW TRENDS IN MECHANISM DESIGN, Sept 6-9, 2011.

"A main focus of the workshop will be contributions from computer science to the field of mechanism design."

Keynote Speakers:

• Rick Antle, Yale School of Management, Yale University
• Peter Cramton, University of Maryland
• Uriel Feige, the Weizmann Institute
• Jason Hartline, Northwestern University
• Nicole Immorlica, Northwestern University
• Hervé Moulin, Rice University
• Tim Roughgarden, Stanford University

Repugnant markets involving altruistic motivations

Kim Krawiec follows up on Kieran Healy's work on markets for organs, and how the distinction between gift giving and buying and selling isn't so clear.

Krawiec writes (I quote at length, but not the whole thing):

"...I agree with Kieran that financial incentives for human organs are more likely to win social acceptance if they resemble the gift-based allocation systems that have already gained social legitimacy. And the oocyte market – a clearly market-based system with the trappings of gift, including the language of donation -- is a good example of this phenomenon. 

In fact, as I’ve discussed before, this disconnect between market realities and gift narrative is an important feature of many taboo trades.  By normalizing otherwise jarring transactions, gift narratives may facilitate markets that otherwise would stagnate under the weight of social disapproval. For those, like me, who believe there is social value in enabling the infertile to reproduce or those dying from kidney failure to live – and, by corollary, allowing those who consider themselves better off by the receipt of compensation in exchange for an egg or kidney – to do so, this is a good thing. 

At the same time, though, the oocyte market example also illustrates the costs of denying market realities in favor of the pretense of gift exchange -- gifts in name only: 

(1) Legal misfit

Gift-based exchange regimes are typically governed by a different set of legal rules than are market-based exchange regimes.  We tend to recognize, for example, the possibilities for opposing interests and opportunistic behavior in a regime of market-based exchange.  And many legal rules governing market-based regimes are designed with these considerations in mind. In contrast, we often assume (incorrectly, especially when the gift is one in name only) an absence of opportunism and an alignment of interests in the case of gift-based exchange. 

(2) Social stereotypes

I do not know if, or how, this would play out in organ markets, but it has for some time concerned me with respect to reproductive markets, especially the oocyte and surrogacy markets.  Scholars have long noted the presumption that many services provided by women, including reproductive and domestic labor, should be provided altruistically, despite their high economic value.  Says Mary Anne Case, for example:

Much of what women have market power over, such as their sexual and reproductive services, they have long been expected not to commodify at all. Even when monetary compensation is allowed, it is often kept low and female providers are expected to be interested in rewards other than money.

The continued insistence that egg donors are, and should be, motivated primarily by altruism and the desire to help others, rather than by the desire for monetary compensation, threatens to reinforce gendered notions that the market activities of women are driven in large part by altruism and that women as a group are uninterested in reaping the full gains of trade from the provision of their goods and services. 

The comparison to sperm markets is especially telling. The insistence on the altruistic motivations of egg donors is in stark contrast to the presumed motivations of sperm donors, who are recruited through materials that ask, “Why not get paid for it?” and advertise, “your sperm can earn!” 

...

In the end, gifts in name only represent a trade-off.  On the one hand, the language of donation coupled with the realities of market-based exchange has the capacity to legitimate otherwise troubling exchanges, facilitating life-saving operations and parenthood for the infertile.  At the same time, gift-in-name-only exchange has consequences for the social, legal, and market structure of these industries, and for the consumers, producers, and others, including the public-at-large, affected by them."

Call for papers: NBER market design conference, October 28-29, 2011

Susan Athey and Parag Pathak have circulated the following call for papers.

From: Susan Athey and Parag Pathak

To: NBER Market Design Working Group

The National Bureau of Economic Research workshop on Market Design is a forum to discuss new academic research related to the design of market institutions, broadly defined. The next meeting will be held in Cambridge, Massachusetts, on Friday and Saturday, October 28-29, 2011.

We welcome new and interesting research, and are happy to see papers from a variety of fields. Participants in the past meeting covered a range of topics and methodological approaches.  Last year's program can be viewed at:  http://www.nber.org/~confer/2010/MDf10/MDf10prg.html

The conference does not publish proceedings or issue NBER working papers - most of the presented papers are presumed to be published later in journals.

There is no requirement to be an NBER-affiliated researcher to participate.  Younger researchers are especially encouraged to submit papers.  If you are interested in presenting a paper this year, please upload a PDF version by September 9, 2011 to this link:

http://www.nber.org/confsubmit/backend/cfp?id=MDf11

Preference will be given to papers for which at least a preliminary draft is ready by the time of submission. Only authors of accepted papers will be contacted.

For presenters and discussants in North America, the NBER will cover the travel and hotel costs. For speakers from outside North America, while the NBER will not be able to cover the airfare, it can provide support for hotel accommodation.

There are a limited number of spaces available for graduate students to attend to conference, though we cannot cover their costs. Please email ppathak@mit.edu a short nominating paragraph.

Please forward this announcement to any potentially interested scholars.  We look forward to hearing from you.

Dating sites for French farmers

If a dating site specializing in French farmers sounds specialized to you, consider the special problems of farmers: they are unusually immobile, as their work is typically tied to a specific plot of land, and they don't meet many potential marriage partners in the course of a typical work day.  So their problem combines those that have given rise to other kinds of specialized dating sites that make a thick market for e.g. particular ethnic groups or people with disabilities, as well as location and career choice.

The NY Times has a nice article by MAÏA de la BAUME covering several such sites: With Help Online, French Farmers Now Playing the Field

"The lack of love in the countryside is a serious topic for a country that sees its bedrock in small farmers and their produce, which is supposed to be uniquely of the place where it is grown. According to the Agriculture Ministry, about 30 percent of male French farmers did not have a partner in 2009."

Signaling in Internet Dating Markets (and welcoming Soo Lee to Harvard)

 Soohyung Lee arrived today at Harvard where she'll spend the coming academic year as a research visitor, on leave from the University of Maryland. (She'll be sitting in Baker Library, come by and join us for coffee some morning and say hello.)

Here's a recent paper that I admire:
Propose with a Rose? Signaling in Internet Dating Markets, (ungated version here)
by Soohyung Lee, Muriel Niederle, Hye-Rim Kim, Woo-Keum Kim
NBER Working Paper No. 17340
August 2011

"Abstract: The large literature on costly signaling and the somewhat scant literature on preference signaling had varying success in showing the effectiveness of signals. We use a field experiment to show that even when everyone can send a signal, signals are free and the only costs are opportunity costs, sending a signal increases the chances of success. In an online dating experiment, participants can attach “virtual roses” to a proposal to signal special interest in another participant. We find that attaching a rose to an offer substantially increases the chance of acceptance. This effect is driven by an increase in the acceptance rate when the offer is made to a participant who is less desirable than the proposer. Furthermore, participants endowed with more roses have more of their offers accepted than their counterparts."

One of the things I like about this paper (aside from the fact that it reports an experiment in market design, that is), is that it also sheds some light on the signaling mechanism for new Ph.D.s on the economics job market.

First class tomorrow morning: slides on website

For students in our market design class which starts tomorrow, some material for the first lecture is on the course website...http://isites.harvard.edu/icb/icb.do?keyword=k80599&pageid=icb.page425742 .

From now on I won't announce course material on the blog...keep an eye on the course website for that.

See you tomorrow morning.

Theory of privacy

Several courses are being offered that deal with new theories of data privacy, concerning how to usefully answer queries from a database while preserving the privacy of individuals in the database, even if the queries can be combined with auxiliary information from other data sources.

These concerns arise in response to the practical observation that even "anonymized" databases can often be "de-anonymized" by combining them with other information.

All the course sites below link to papers in the literature, and, at least at this early stage of development, there seems to be a great deal of consensus on which papers to cover.

The Algorithmic Foundations of Data Privacy taught by Aaron Roth this Fall at Penn

Algorithmic Challenges in Data Privacy taught at Penn State by Sofya Raskhodnikova and Adam D. Smith

Foundations of Privacy taught at Weizmann by Moni Naor.

Multiple publication and plagiarism in economics journals

An unusual insight into the culture of academic publication comes in a recently published letter from David Autor, the editor of the Journal of Economic Perspectives to a famous economist who published an article there that was substantively identical to papers he had published elsewhere.

David Autor writes:
"...There is a very substantial overlap between these articles and your JEP publication. Indeed, to my eye, they are substantively identical. Based on discussions with the editors of these journals, we have confirmed that the JEBO article was in press and the R&S article under review while your article was under revision for JEP. At the time we accepted your paper for JEP, we could not readily have learned of these two overlapping articles since they were at the time unpublished. Further obscuring the links among these articles is the fact that none of your four articles cites any of the other three. Had you chosen to inform us of the JEBO and R&S articles prior to the publication of your JEP article, we would of course have no grounds for complaint. In that case, however, we would not have published your article.

"We view your publication of this substantive material in multiple journals simultaneously as a violation of the spirit of the editorial agreement with American Economic Association that you signed in the winter of 2010, which states "The Author(s) warrant(s) that the above-named manuscript is his or her own original work of authorship and has not been published previously." The AEA does not intend to pursue legal action against you for violation of copyright. However, we find your conduct in this matter ethically dubious and disrespectful to the American Economic Association, the Journal of Economic Perspectives and the JEP's readers..."

The letter from Autor is followed by a letter of apology from the senior author of the papers in question, Zurich's Professor Bruno Frey.
"...It was a grave mistake on our part for which we deeply apologize..."
**********

RePEc maintains a plagiarism page on which it includes links to offending authors and some of the case material, including the present case.

More on the taking of photos

Here are two followups on my earlier post today on British Airways' claims about photographs. The first via Paola Manzini, concerns US Airways' similar claims. The second, via Ben Edelman, concerns a very recent court victory in the U.S. by the ACLU, regarding citizens' rights to photograph police officers.

Woman thrown off U.S. Airways flight for taking a picture of rude air steward's name tag.
"A photographer was thrown off a U.S. Airways flight and branded a security risk after she took a photo of a rude air steward's name tag so she could complain about her."


A Victory for Recording in Public!
"The CMLP is thrilled to report that in the case of Glik v. Cunniffe, which the CMLP has blogged previously and in which the CMLP attempted to file an amicus brief, the U.S. Court of Appeals for the First Circuit has issued a resounding and unanimous opinion in support of the First Amendment right to record the actions of police in public."

British Airways Conditions of Carriage

A disturbing incident at British Airways raises interesting questions about their Conditions of Carriage, the fine-print online contract that you and they enter into when you buy a ticket. (In many markets what is bought and sold is at least partly a legal contract.)

To make a long story short, we were accosted in the public (pre-security) area of London's Heathrow airport by a bizarrely aggressive BA employee who declined to identify himself. I took his picture. When I was about to board the plane an hour and a half later, I was asked to step aside, where another BA employee told me that photographing BA employees was forbidden, and it was a condition of carriage that I delete the photo.

I have not been able to find that clause in the published COC, and have written to BA for clarification.

Conference on Frontiers in Market Design

Bettina Klaus has announced two conferences on market design. The one that is imminent is

Market Design Workshop on September 14th, 2011, Maastricht University, The Netherlands:

The speakers are Bettina Klaus, Flip Klijn, Scott Duke Kominers, Morimitsu Kurino, Alexey Kushnir, Markus Walzl, and Alexander Westkamp. The workshop program and abstracts of presented papers can be downloaded here:Workshop Program and Abstracts of Presented Papers

And here's a "pre-announcement" of one in May...

Frontiers in Market Design: Matching Markets
May 20 – 23, 2012
Centro Stefano Franscini (http://www.csf.ethz.ch/), MonteVerità, CH

"Dear colleagues,


Together with Itai Ashlagi, Péter Biró, Federico Echenique, Flip Klijn, and Alvin Roth, I am planning a conference on Market Design with a focus on Matching Markets at a very nicely located Swiss conference centre.


We aim to organize a worthy follow-up to the conference that celebrated the 20th anniversary of Two-Sided Matching: A Study in Game-Theoretic Modeling and Analysis by Alvin Roth and Marilda Sotomayor (http://econ.duke.edu/erid/conferences/roth-and-sotomayor-twenty-years-after). We hope to bring together researchers from different fields (economics, computer science, etc.) and attract many young researchers.


With this pre-announcement, we would like to see how many participants we might be able to count on (we will be able to accommodate up to 22 talks). The reason for this unorthodox procedure is that I will have to make a reservation of the conference room and of the needed accommodation capacity at the Conference Centre hotel well in advance (with penalties applying if the reserved capacities are left unused).


Depending on the exact number of participants, the conference fee will amount to about 800 CHF (this conference fee includes the accommodation for 3 nights at Hotel Monte Verità and full board during the conference). Unfortunately, this currently amounts to almost 1000$ (the Swiss Franc is quite strong). We did not yet succeed in obtaining further funding for the conference that would allow us to subsidize the on-site costs), but we are still working on that. If you can think of any funding opportunity we might be able to apply for, please let me know.


In order for us to facilitate the conference planning and later also reserve the corresponding conference room and conference accommodation, I would like to ask you to send an e-mail to me (Bettina Klaus at econlausanne@yahoo.com) before October 1st indicating the following:


(A) You are very likely to attend this conference (this would be an indication for me to count you as a participant of the conference for the conference room and accommodation reservation).


(B) You are very interested in attending this conference, but not sure yet (I can then keep you informed via a conference mailing list).


(C) You are not likely to attend the conference. In this case, no need to send an e-mail (you will not receive further mailings concerning the conference).


Thanks a lot & have a great (remaining) summer,
Bettina et al."

Transplant organs from executed prisoners

In another sign of what constitutes a repugnant transaction, the American Journal of Transplantation now has this notice on its "Instructions to Authors" page:

"New Policy Effective May 2011
AJT will not accept manuscripts whose data derives from transplants involving organs obtained from executed prisoners. Manuscripts writing about this practice (e.g. an editorial or a report recounting the secondary consequences of this practice) may be considered at the discretion of the Editorial Board, but require a written appeal to the Board prior to submission of the manuscript."

Breast milk

The barriers to sale of human breast milk seem to be falling. Duncan Gilchrist points me to this article in Wired: Liquid Gold: The Booming Market for Human Breast Milk, which reports a booming private market, at high prices.

"Most body fluids, tissues, and organs—semen, blood, livers, kidneys—are highly regulated by government authorities. But not breast milk. It’s considered a food, so it’s legal to swap, buy, or sell it nearly everywhere in the US. This accounts, in part, for the widely varying quality and safety standards in the online market for milk. For their part, Prolacta and nonprofit milk banks have rigorous screening processes for potential donors, including tests for drugs, hepatitis, and HIV. But Only the Breast and the volunteer sites, which see themselves more as communities than commodity markets, don’t screen donors or assume responsibility for the milk they help disseminate."

Market design courses in Boston this semester

Boston is humming with market design courses.

Tayfun Sonmez will be offering an undergraduate course on market design at Boston College: Advanced Microeconomic Theory (T Th 13:30 - 14:45 AM).
There's no web site, but the course focuses on various aspects of matching, including some of Tayfun's latest work.

Susan Athey will be offering an undergrad course on market design at Harvard:
Economics 1056: Market Design Harvard College/GSAS: 69207 Fall 2011-2012   Location: Sever Hall 106, Meeting Time: Tu., Th., 2:30-4

Ben Edelman and Peter Coles will be offering an MBA course at HBS,

The Online Economy: Strategy and Entrepreneurship

Intended primarily for MBA’s.  Has one module firmly grounded in market design: 

“Monetization and Market Design: What structures, rules, and incentives create a well-functioning online ecosystem? We examine review and reputation systems, dynamic marketplace pricing, and institutions to create a safe environment for users, while at the same time protecting a site from liability.”

Peter Coles and I will be giving a graduate course on market design at Harvard:
Economics 2056a: Market Design  Harvard College/GSAS: 3634, Fall 2011-2012, Location: Littauer Center M-16, Meeting Time: F., 9-12

And next semester, Parag Pathak will be offering an undergrad course in market design at MIT.

Update: and Sven Seuken points out that David Parkes at Harvard is offering "Economics and Computation" in Computer Science this Fall. It will touch on a couple of market design topics: http://www.seas.harvard.edu/courses/cs186/

School choice in New York City

Thomas Toch and Neil Dorosin write about New York City high school choice in Education Week: NYC Program Means Real Public School Choice for Students

"New York’s ambitious high school selection system isn’t perfect. But it has liberated thousands of students from failing neighborhood high schools, transformed the city’s high school principals from bureaucrats to entrepreneurs, improved the perception of public schools among middle-class families...
...
"Of the small number of cities that permit students to select their public schools, most make school choice optional and relatively few families participate. New York City has taken the bold step of requiring rising 9th graders to select their high schools, a strategy that has created a far more vibrant public school marketplace than exists anywhere else in the country. "
*********

(And here's our latest paper on that...
Abdulkadiroglu, Atila, Parag A. Pathak, and Alvin E. Roth, "Strategy-proofness versus Efficiency in Matching with Indifferences: Redesigning the NYC High School Match,'' American Economic Review, 99, 5, Dec. 2009, pp1954-1978.)

Poker refugees

April 15, 2011 has come to be known as Black Friday by online poker players in the U.S. On that day, indictments were issued against major offshore sites, PokerStars, Full Tilt Poker and Absolute Poker, for violating U.S. anti-gambling laws. An unknown but nontrivial number of Americans had made their living playing on those sites. Now, if they wish to continue playing, they must do so from overseas.

Consequently, a new class of migrant workers has developed, and a service has grown up to help them relocate: Poker refugees.

Here's a story about it: US poker players turned into refugees by online gaming ban

"American card players are hardly a high priority for humanitarian organisations protecting the rights of the world's imperilled communities. But such is the current plight of professional poker players in the United States, where online poker has been all but illegal since April, that a new service launched last week offering to relocate beleaguered card players to "poker-friendly countries" around the world.

"The service, called Poker Refugees, was launched in response to the US Department of Justice's clampdown on online poker operators earlier this year, which effectively enforced prohibition on online poker in the US. On what has become known in the industry as "Black Friday", the three biggest poker sites in the world were closed to US traffic and their executives indicted by the FBI on numerous charges, including money laundering and bank fraud.

"The operators have since either ceased trading or closed their doors to American customers, leaving thousands of professional players without income unless they dramatically change their circumstances.

"They're not moving outside of the US because they want to go on vacation, or because they want to pay less taxes," said Kristin Wilson, a real-estate agent based in Costa Rica, and a partner in Poker Refugees. "They're moving because they have to keep their job, keep their career and support their families."

Child marriage

Child marriage by very young children is under discussion again in Saudi Arabia, the Wall Street Journal reports. Part of the issue is just how young should count as young: Cleric Fights Saudi Bid to Ban Child Marriages

"RIYADH, Saudi Arabia—A senior Saudi cleric issued a religious ruling to allow fathers to arrange marriages for their daughters "even if they are in the cradle," setting up a confrontation between government reformers and influential conservative clergy.

"Sheik Saleh al-Fawzan, one of the country's most important clerics, issued the ruling after the Justice Ministry said this month it would act to regulate marriages between prepubescent girls and men in the Islamic kingdom.
...
"The fatwa marks the second time in a year that religious authorities have knocked back a government initiative to move forward on social issues involving women.

"Last year, King Abdullah bin Abdelaziz al-Saud pushed for higher female employment, suggesting that women ought to be allowed to work as supermarket cashiers, only for the job to be ruled off-limits to the gender by the Grand Mufti, the country's highest religious leader.

"In the conservative Islamic kingdom, women aren't allowed to drive and can't work, travel abroad or undergo surgery without the permission of a male relative.
...
"Saudi media reported that the Justice Ministry would push ahead with setting a minimum age for marriage, despite the fatwa. The ministry couldn't be reached to comment for this article.

"In recent months, a spate of stories about young Saudi girls being forced by their fathers to marry middle-age men for lavish dowries or other personal gains has prompted editorials in local media denouncing the practice and calling for change.

"In April, the English-language Arab News reported that a court granted a 12-year-old girl a rare divorce from her 80-year-old husband, who had paid her father a dowry of 85,000 Saudi riyals, or $23,000.
...
""Scholars have agreed that it was permissible for fathers to marry off their young daughters, even if they are in the cradle," Sheik Fawzan wrote in his fatwa. "But it isn't permissible for their husbands to have sex with them unless they are capable of being placed beneath and bearing the weight of the men."

"He cited the example of the prophet's wife Aisha, who he said was wed at the age of six, but didn't have sex until she was nine.

"Saudi Arabia's Grand Mufti said in 2009 that it was acceptable for girls aged 10 and above to marry."

Marriage supply and demand, and equilibrium behavior

Two recent posts caught my eye. The first, by Robert Frank in the NY Times, speculates on how the baby boom may have changed sexual mores in the U.S., and reports on a recent article about the imbalance of men and women in China and the behavioral changes this may be causing: Supply, Demand and Marriage .

The second, by Ralph Richard Banks in the WSJ, speaks about the marriage behavior of black men and women in the U.S., and relates it to the reluctance of black women to marry non-black men, and their resulting shortage of marriage partners: An Interracial Fix for Black Marriage

Here's Frank:
"In the United States, the end of World War II and the return of millions of troops set off the baby boom. In the second half of the 1940s, the population swelled by almost 14 percent, versus growth of less than half of 1 percent during the first half of the decade. By the mid-1960s, many of those babies were reaching the traditional marriage age.

"At the time, it was American custom for women to marry men several years older than themselves. In a typical wedding in 1969, for example, the bride might have been born in 1947 and the groom in 1943. Because of that custom, women at the leading edge of the baby boom confronted a significant shortfall of potential marriage partners.
...
""Before the 1960s, cultural norms encouraged celibacy before marriage. The breakdown of those norms has been widely attributed to the introduction of oral contraception...
"The supply-and-demand model bolsters the skeptics’ concerns. ... The sexual revolution, which bent cultural norms toward male preferences, may thus be partly explained by the excess demand for grooms in the 1960s."

And here's Banks:
"Nearly 70% of black women are unmarried, and the racial gap in marriage spans the socioeconomic spectrum, from the urban poor to well-off suburban professionals. Three in 10 college-educated black women haven't married by age 40; their white peers are less than half as likely to have remained unwed.

"What explains this marriage gap? As a black man, my interest in the issue is more than academic.
...
"Black women confront the worst relationship market of any group because of economic and cultural forces that are not of their own making; and they have needlessly worsened their situation by limiting themselves to black men. I also arrived at a startling conclusion: Black women can best promote black marriage by opening themselves to relationships with men of other races.
...
"Part of the problem is incarceration. More than two million men are now imprisoned in the U.S., and roughly 40% of them are African-American. At any given time, more than 10% of black men in their 20s or 30s—prime marrying ages—are in jail or prison.
Educationally, black men also lag. There are roughly 1.4 million black women now in college, compared to just 900,000 black men. By graduation, black women outnumber men 2-to-1. Among graduate-school students, in 2008 there were 125,000 African-American women but only 58,000 African-American men. That same year, black women received more than three out of every five law or medical degrees awarded to African-Americans.

"These problems translate into dimmer economic prospects for black men, and the less a man earns, the less likely he is to marry. That's how the relationship market operates. Marriage is a matter of love and commitment, but it is also an exchange. A black man without a job or the likelihood of landing one cannot offer a woman enough to make that exchange worthwhile.

"But poor black men are not the only ones who don't marry. At every income level, black men are less likely to marry than are their white counterparts. And the marriage gap is wider among men who earn more than $100,000 a year than among men who earn, say, $50,000 or $60,000 a year.

"The dynamics of the relationship market offer one explanation for this pattern. Because black men are in short supply, their options are better than those of black women. A desirable black man who ends a relationship with one woman will find many others waiting; that's not so for black women."

HT: Sangram Kadam

Kieran Healy on markets for organs

Kieran Healy is profiled at the Kenan Institute for Ethics, answering the question "Should there be a market for human organs?"

"In the end, there is less of a division between gift-giving and market exchange than we might think. Incentives are not incompatible with the kind of moral obligations associated with donation. We may wish for a bright line between virtuous gifts and selfish markets, but the boundary is constantly crossed, in both directions.

"For example, gifts can be easy vehicles for getting people in your debt, or obtaining something for free, and people calculate very precisely what the “right” amount to spend on a present is when birthdays or holidays come around. On the other hand, markets routinely have strongly moralized aspects, as we take care to pay people in ways that signal our esteem for them. We discreetly reimburse people for their time, or give them an honorarium, say, rather than paying them in cash by the hour.

"A lawful market in organs would probably be considered more legitimate if it resembled a gift exchange, as we see already taking place in the case of human eggs, where the language of donation predominates even though the eggs are bought and sold and prices are widely advertised. However, even today, with the exception of kidneys, you can’t get a transplant unless you have the insurance to pay for it, despite others’ willingness to donate their organs. So why should people feel any obligation to give to a system that serves those who need it so poorly?"