"Reviews of Michel Callon’s Markets in the Making: Rethinking Competition, Goods, and Innovation, In Journal of Cultural Economy

 Here's a set of brief reactions to Michel Callon's book Markets in the Making: Rethinking Competition, Goods, and Innovation. The reactions are by a diverse set of authors (as an economist I added a good deal to the diversity:)

"Review Symposium: Michel Callon’s Markets in the Making: Rethinking Competition, Goods, and Innovation. Zone Books,"  by Michel Callon, Paul Langley, Bill Maurer, Timothy Mitchell , Alvin Roth & Koray Caliskan, Journal of Cultural Economy  Published online: 28 Oct 2024

 The symposium collects the following comments:

Introduction to the symposium  by Koray Caliskan

Markets in the making by Paul Langley

The anthropologist at the end of the world? Salvaging anthropology for alternative value propositions by Bill Maurer 

Special and highly artificial processes by Timothy Mitchell 

Markets in the making  by Alvin E. Roth 

Discussion and commentary by Michel Callon

*********

Here is the beginning of my comment:

"Markets in the making
Alvin E. Roth
It is a pleasure to read Michel Callon’s completed book, after a lengthy pandemic correspondence, abridged in Callon and Roth (2021). Callon appreciates that markets are complex, dynamic, and an essential part of society, which itself is constantly changing, not least in response to changes in technology (such as computers and the internet). The book itself is testimony to the speed of change: speaking of gambling addicts, Callon writes “One day it will be possible to reach him at home through an app.” In the U.S. this has happened already, particularly for betting on sporting events while they are underway.

Much of what he says will be very agreeable to both sociologists and economists, although there is room to disagree about how some previous work is interpreted.

The book is not easy reading: the complexities that Callon considers prompt him to develop new words to describe them. He speaks of market “agencements” (which are constantly “reagencing,”) and, “passiva(c)tion” (which requires new punctuation and word formation, as markets help goods become “pass(act)ive”).

Callon also redefines familiar terms such as “competition” and “innovation.”

In market agencements, perfect competition … has nothing to do with that of neoclassical economics. Its only goal is to make bilateral transactions proliferate … 

and
Without innovation, there is no competition, and as a consequence, there is no market activity. … As we will see throughout this book, th[is] rule brooks no exceptions.

Rules that brook no exceptions worry me.

Notwithstanding these quibbles, Callon’s aim is to alert us to how markets, marketplaces, their participants, and the transactions they foster, all interact with one another and the larger economy in intricate ways that shape the society that also shapes them ... "

*********

Here is the beginning of Callon's response to all the remarks in the Symposium:

"Discussion and commentary
Michel Callon
What better way to express my gratitude to the colleagues invited by the JCE than to confess that, thanks to them and their demanding reading, I have a better understanding of what I was trying to do.

When you decide to write a book you have to start with a simple question and try, whatever happens, to take it (develop it) to the end. If you don't succeed, if difficulties and contradictions pile up along the way, it's because the question was badly formulated, or worse, it was uninteresting.

The question I began with is both fundamental and undeniably ambitious: What are the felicity conditions of a commercial transaction, understood as the exchange of property rights for monetary payment? This question, though simple in words, encompasses a vast and intricate world. It involves a specific environment where particular agents engage in relationships, where certain property rights are assigned to entities, where valuation mechanisms are in place, and where currencies circulate. This book focuses on the organization and architecture of this world.

Neologisms
It is difficult to grasp the peculiarities and characteristics of this world without making a detour into economic anthropology, which is one of the fields that studies it. I could have avoided the challenge, given the richness and complexity of this literature, but doing so would have meant abandoning the question. What kept me from giving up was a phrase from Nietzsche that Bruno Latour liked to quote: “For I approach deep problems such as I do cold baths: fast in, fast out.” (Nietzsche Citation2001, 231). Don't be afraid of the cold, but don't let it paralyze you! I tried to follow the advice as best I could, but maybe I didn’t get out of the bath quickly enough! The book is long—probably too long. But that’s not all. Not only does it lack illustrations (mea culpa), but it also introduces neologisms that are almost impossible to pronounce.

Take, for example, the notion of passivaction. When Koray Caliskan and I were looking for a word to describe the curious process that frames an entity's actions, whatever it may be, without limiting the entity’s ability to take unexpected actions, we first thought of “passivation.” We soon realized, however, that this term was quite rightly giving rise to complete misunderstandings. Few had read Antoine Hennion and Emilie Gomard's seminal article on people addicted to hard drugs, which showed that: a) becoming passive required complex and costly efforts, and b) passivity was a form of action in itself. To avoid creating new words, we settled on “pacifying.” While it was a better choice, it didn't fully capture the reality of the process.

When words are lacking, the only solution is to come up with new ones, in the hope that they will capture what we are trying to grasp. Whether we are talking about human beings, technical objects or non-human living beings and the services they provide, there is a balance to be struck between programmed behavior and the ability to deal with the unexpected. What would be the value of a worker with no sense of initiative? What would be the value of a technical object incapable of adapting (being adapted) to new circumstances? What would be the value of a draught horse that, through extreme domestication, had lost all ability to improvise?

No framing can completely stop overflows, and if it could, it would block any chance for adaptation and change. When a process is this universal, continuing to misname it would be a mistake. As Albert Camus said, “To misname things is to add to the misery of the world.” Passivaction may be a barbaric word, but it highlights the dual movement that transforms an entity into something that both acts and is acted on, both configured and configures, both passive, and thus active, or passivacted!"

 

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Earlier:

Thursday, January 6, 2022 The design and performation of markets: a discussion, by Michel Callon and Alvin Roth in the AMS Review

 

And if you are meeting Callon for the first time, here's an interview he gave last year:

From Innovation to Markets and Back. A Conversation with Michel Callon  by Alexandre Mallard — 

Here's a snippet from that interview:

"I can count on one hand the collaborations I’ve since had with economists: an edited volume on the concept of network with Patrick Cohendet, Dominique Foray, and François Eymard-Duvernay (Foray et al., 1999), and a recent article cosigned by Alvin Roth on the role of economics in formatting the economy (Callon & Roth, 2021). I enjoyed working with these colleagues because they were open and respectful, and I tried to be too. They understood my efforts to be in dialogue with their discipline. Their attitude was in stark contrast with the majority of their colleagues who were arrogant, bordering on dismissive. Every time I’ve had to share a flight with economists someone has snarked, “Michel, I hope the plane you’re boarding isn’t a social construction!” Economics is by no means a dismal science, but too often economists make it one.

...

"Through these encounters, so filled with incomprehension, it hit me that the very definition of economics was in play. There were so many things to question that went beyond pounding on homo oeconomicus, his unrealism or his vices and virtues. For instance, in contrast to evolutionary economics, mainstream economics was entirely based on an unrealistic definition of goods that was strikingly limited when applied to scientific knowledge. In asserting that scientific knowledge was intrinsically (by nature) non-rival and non-excludable, mainstream economists implicitly recognized that they were completely uninterested in the associated milieu of goods, that is to say in everything that gives them the capacity to be useful and consequently to be used. Economists did not realize that without an associated milieu a good is not a good. A scientific statement airlifted over the Gobi desert has no other fate than to dissipate into the sands because it is deprived of the socio-technical environment that gives it meaning and utility. Likewise, without the infrastructure that allows it to take off, navigate, and land, without the fuel supply contracts, control towers, and air traffic controllers, without the insurance companies, international regulations, and the legal agreements, an Airbus 380 remains grounded. A Nespresso capsule in the palm of George Clooney’s hand, without its dedicated machine or a supply of running water, is as useless as a car on an uninhabited island lost in the middle of the Pacific Ocean. A thing is not born a good, it becomes one; a thing is not born a public good, it must become one too." 

Kim Krawiec interview about WHO demands for national self sufficiency in blood donation and kidney exchange

 The University of Virginia takes note of the recent Krawiec & Roth paper I blogged about in August.

Here is their interview with Kim about the paper:

WHO Stifles International Blood and Organ Donations, Argue Professors. Professor Kimberly Krawiec, Nobel Prize Winner Alvin E. Roth of Stanford Argue World Health Organization Policies Need Revision

Here are the first two Q&As

"What motivated you to critique the WHO principles of self-sufficiency and nonremuneration in organs and blood? ​

"The severe shortage of both blood products and transplantable organs, especially kidneys, was our motivation and has motivated much of our other work, both together and separately. In the United States alone, the organ transplant waiting list is approximately 100,000 people, and if current trends continue, it will only grow in the coming years.

"Shortages of blood products present a similar challenge. Although wealthy countries are typically able to satisfy domestic whole blood needs, the vast majority of low- and middle-income countries (LMIC) are not. As a result, in many LMIC, shortages of blood for transfusion contribute to maternal death, death from traffic accidents and complications from childhood anemia. Moreover, even wealthy countries experience seasonal shortages of whole blood or deficiencies in some blood components, such as platelets, which are harder to collect and have a shorter shelf life.

The shortage of plasma-derived medicinal products (PDMPs) is particularly severe and entirely preventable. PDMPs are life-saving treatments for multiple acute and chronic conditions for which there are no alternative treatments. Yet these life-saving therapies are unavailable to much of the world’s population. The United States, one of the few countries to pay plasma donors, supplies 70% of the world’s plasma needs, with Germany, Austria, Hungary, Czechia and Latvia (which also permit some form of payment for plasma donors) supplying another 20% of the world total. In other words, a handful of countries supply plasma to the rest of the world, including other wealthy countries. Meanwhile, LMIC who can neither collect and process their own nor afford to purchase blood products on the open market (or are prevented from doing so under the terms of the foreign aid that supports their health system) simply do without, to the detriment of their citizens.

"How do current WHO policies on organ and blood donation contribute to this problem?

"WHO policy mandates both national (or sometimes only regional) self-sufficiency and an absence of remuneration for both blood products and transplantable organs — what we refer to in the paper as “the twin principles.” These twin principles are unhelpful separately and unworkable together. Their effect on blood products is particularly stark — no country that fails to compensate donors is self-sufficient in plasma collection and few LMIC collect sufficient supplies of whole blood.

"The self-sufficiency mandate presents a real hurdle to progress in transplantation, especially for smaller countries and LMIC. This is especially the case because some of the most exciting and promising developments for increasing the availability of transplants have been in kidney exchange, a mechanism that leverages in-kind exchange, rather than financial compensation, to encourage and facilitate donation among those with willing but incompatible partners. But kidney exchange works best when a large pool of patient-donor pairs can engage with one another. So, requiring that transplantation be contained within national boundaries unnecessarily limits access to transplants that could be achieved only by cross-border exchange."

Incentives matter for getting participation in clinical trials by low income households

 Here's a study that casts some light (via a randomized experiment) on the importance of incentives to get representative participation in clinical trials.

Nonrepresentativeness in Population Health Research: Evidence from a COVID-19 Antibody Study By Deniz Dutz, Michael Greenstone, Ali Hortaçsu, Santiago Lacouture, Magne Mogstad, Azeem M. Shaikh, Alexander Torgovitsky, and Winnie van Dijk, AER: Insights 2024, 6(3): 313–323, https://doi.org/10.1257/aeri.20230195

Abstract: "We analyze representativeness in a COVID-19 serological study with randomized participation incentives. We find large participation gaps by race and income when incentives are lower. High incentives increase participation rates for all groups but increase them more among underrepresented groups. High incentives restore representativeness on race and income and also on health variables likely to be correlated with seropositivity, such as the uninsured rate, hospitalization rates, and an aggregate COVID-19 risk index."

"We analyze representativeness in a unique COVID-19 serological study. Unlike most studies, the Representative Community Survey Project (RECOVER)COVID-19 serological study experimentally varied financial incentives for participation. The study was conducted on households in Chicago (the target population). Randomly sampled households were sent a package that contained a self-administered blood sample collection kit and were asked to return the sample by mail to be tested for the presence of COVID-19 antibodies (“seropositivity”). Households in the sample were randomly assigned one of three levels of financial compensation for participating in the study: $0, $100, or $500.

"We find that households in neighborhoods with high shares of minority and poor households are grossly underrepresented at lower incentive levels. High incentives increase participation rates for all groups but increase them more among underrepresented groups. A $500 incentive restores representativeness in terms of neighborhood-level race and poverty status. Representativeness is also restored in health variables likely to be correlated with seropositivity, such as the uninsured rate, hospitalization rates, and an aggregate COVID-19 risk index. Since incentives were randomly assigned and only revealed after the household was contacted, the noncontact rates at $0 and $100 should be the same as at $500, implying that differential hesitancy to participate is responsible for much of the nonrepresentativeness that we find at lower incentives.

"We are not aware of studies that randomize financial incentives in population health studies. It is well appreciated that racial minorities and lower-income households participate in health research at lower rates.1  The impact of incentives on survey participation rates conditional on demographic characteristics has been studied in the survey methodology literature (see Groves et al. 2009; Singer and Ye 2013, and references therein). The incentives used in this literature are typically an order of magnitude smaller than the incentives in the RECOVER study."

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Some earlier related posts:

Monday, February 22, 2021

Ethical Payment in Human Infection Challenge Studies in the American Journal of Bioethics

Monday, March 1, 2021

Compensating challenge vaccine trial participants: further discussion in the American Journal of Bioethics

Thursday, October 29, 2020

Paying participants in challenge trials of Covid-19 vaccines, by Ambuehl, Ockenfels, and Roth

"we note that increasing hourly pay by a risk-compensation percentage as proposed in the target article provides compensation proportional to risk only if the risk increases proportionally with the number of hours worked. (Some risky tasks take little time; imagine challenge trials to test bulletproof vests.) "

Sunday, November 1, 2020

What do we know about the effects of payments to participants in challenge trials for vaccines, and other public spirited activities?

Blood donation by family members in India: LGBT donors still banned

 In India, where the shortage of blood supplies is addressed by having family members donate, the ban on donation by LGBT people is a serious constraint.

The BBC has the story:

LGBT Indians demand end to 'discriminatory' ban on blood donation  by Umang Poddar

"In 2018, India's top court legalised gay sex in a landmark ruling - but the country still doesn't allow transgender people and gay and bisexual men to donate blood.

"People from the LGBT community say the decades-old ban is "discriminatory" and have gone to court to challenge it.

...

"Activists argue that apart from it being discriminatory, the ban is also irrational because of the high demand for blood transfusions in the country.

"A study published by the Public Library of Science in 2022 estimated that India faced an annual deficit of around one million units of blood."

HT: Vincent Jappah

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Earlier:

Tuesday, November 28, 2023

"Professional blood donors" in India (where paying blood donors is illegal)

Danny Kahneman, remembered by Stanford's Center for Advanced Study in the Behavioral Sciences

 Daniel Kahneman, 1934-2024: Nobel Prize Winner & CASBS Legend

"Daniel Kahneman, the Nobel laureate, professor emeritus of psychology and public affairs at Princeton University, and among the most distinguished and consequential cognitive and behavioral scientists of the past half-century, passed away on March 27, 2024. He was 90.

"Daniel Kahneman was a CASBS fellow during the 1977-78 academic year, occupying office (called “studies” at CASBS) #6. (Notably, this remarkable class included two other future Nobel Prize winners – Oliver Williamson (2009) and Robert B. Wilson (2020) – as well as future Supreme Court Justice Ruth Bader Ginsburg.)

"Kahneman’s 1977-78 year is legendary for two reasons. First, it is here, at CASBS, where Kahneman and his principal collaborator of nearly a decade, Amos Tversky – who had a visiting appointment at Stanford University’s psychology department that year[1] – completed a paper they painstakingly had been working on for years: “Prospect Theory: An Analysis of Decision under Risk.” The paper, published in March 1979 in the journal Econometrica, is a landmark in the annals of the social sciences. The paper presents a direct challenge to standard expected utility theory through the concept of loss aversion, describing how economic agents assess prospective losses and gains in an asymmetric manner. In other words, people frame transactions or outcomes in their minds subjectively, affecting the value (or utility) they expect to receive.

...

"Though Kahneman himself had expressed it in various ways over the years, he put it crisply in 2016:

"CASBS is where behavioral economics took shape. When Richard Thaler heard that Amos Tversky and I would be in Stanford, he finagled a visiting appointment down the hill to spend time with us. We spent a lot of time walking around the Center and became lifelong friends. Those long conversations that Dick had with Amos and me helped him construct his then heretical (and now well-established) view of economics, by using psychological observations to explain violations of standard economic theory.[5]

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Earlier:

Wednesday, March 27, 2024

Danny Kahneman (1934-2024)

Covid vaccine boosters: promoting uptake is hard

 A recent study published in Nature shows that inexpensive nudges (to get Covid revaccinations) can have small but measurable effects (about 1 percentage point). The large scale study involving 18 coauthors planned to message 3,662,548 CVS Pharmacy patients  with reminders. The  experimental treatments included one message that also offered free rides to pharmacies. However that message did not further increase revaccinations.

Megastudy shows that reminders boost vaccination but adding free rides does not. by 

Katherine L. Milkman, Sean F. Ellis, Dena M. Gromet, Youngwoo Jung, Alex S. Luscher, Rayyan S. Mobarak, Madeline K. Paxson, Ramon A. Silvera Zumaran, Robert Kuan, Ron Berman, Neil A. Lewis Jr, John A. List, Mitesh S. Patel, Christophe Van den Bulte, Kevin G. Volpp, Maryann V. Beauvais, Jonathon K. Bellows, Cheryl A. Marandola & Angela L. Duckworth, Nature (2024)

Abstract: Encouraging routine COVID-19 vaccinations is likely to be a crucial policy challenge for decades to come. To avert hundreds of thousands of unnecessary hospitalizations and deaths, adoption will need to be higher than it was in the autumn of 2022 or 2023, when less than one-fifth of Americans received booster vaccines1,2. One approach to encouraging vaccination is to eliminate the friction of transportation hurdles. Previous research has shown that friction can hinder follow-through3 and that individuals who live farther from COVID-19 vaccination sites are less likely to get vaccinated4. However, the value of providing free round-trip transportation to vaccination sites is unknown. Here we show that offering people free round-trip Lyft rides to pharmacies has no benefit over and above sending them behaviourally informed text messages reminding them to get vaccinated. We determined this by running a megastudy with millions of CVS Pharmacy patients in the United States testing the effects of (1) free round-trip Lyft rides to CVS Pharmacies for vaccination appointments and (2) seven different sets of behaviourally informed vaccine reminder messages. Our results suggest that offering previously vaccinated individuals free rides to vaccination sites is not a good investment in the United States, contrary to the high expectations of both expert and lay forecasters. Instead, people in the United States should be sent behaviourally informed COVID-19 vaccination reminders, which increased the 30-day COVID-19 booster uptake by 21% (1.05 percentage points) and spilled over to increase 30-day influenza vaccinations by 8% (0.34 percentage points) in our megastudy. More rigorous testing of interventions to promote vaccination is needed to ensure that evidence-based solutions are deployed widely and that ineffective but intuitively appealing tools are discontinued.

Kidney Exchange in KSA

 Here's a press release from King Faisal Specialist Hospital and Research Centre in Saudi Arabia:

KFSHRC Performs Over 5,000 Successful Kidney Transplants

Published: Jul 01, 2024

RIYADH, Saudi Arabia, July 01, 2024 (GLOBE NEWSWIRE) -- King Faisal Specialist Hospital and Research Centre (KFSHRC) has successfully performed 5,000 kidney transplants since the inception of its Transplant Program in 1981...

...

"Over the past decade, the program has experienced significant growth, with more than 3,000 transplants performed since 2010 and approximately 1,250 transplants in the last three years alone.

"Moreover, the establishment of the Kidney Paired Donation (KPD) program has significantly revolutionised the transplantation landscape by addressing the challenge of compatibility between patients and their donors. This program has helped patients who would otherwise face considerable obstacles in finding suitable matches. :

Fairness, efficiency and strategy proofness in assigning indivisible objects: two new papers

 Here are two new papers on the burgeoning literature of matching people to scarce indivisible resources.

First, an experiment by Claudia Cerrone, Yoan Hermstrüwer,  and Onur Kesten.

Claudia Cerrone, Yoan Hermstrüwer, Onur Kesten, School Choice with Consent: an Experiment, The Economic Journal, Volume 134, Issue 661, July 2024, Pages 1760–1805,   https://doi.org/10.1093/ej/uead120

Abstract: Public school choice often yields student assignments that are neither fair nor efficient. The efficiency-adjusted deferred acceptance mechanism allows students to consent to waive priorities that have no effect on their assignments. A burgeoning recent literature places the efficiency-adjusted deferred acceptance mechanism at the centre of the trade-off between efficiency and fairness in school choice. Meanwhile, the Flemish Ministry of Education has taken the first steps to implement this algorithm in Belgium. We provide the first experimental evidence on the performance of the efficiency-adjusted deferred acceptance mechanism against the celebrated deferred acceptance mechanism. We find that both efficiency and truth-telling rates are higher under the efficiency-adjusted deferred acceptance mechanism than under the deferred acceptance mechanism, even though the efficiency-adjusted deferred acceptance mechanism is not strategy proof. When the priority waiver is enforced, efficiency further increases, while truth-telling rates decrease relative to variants of the efficiency-adjusted deferred acceptance mechanism where students can dodge the waiver. Our results challenge the importance of strategy proofness as a prerequisite for truth telling and portend a new trade-off between efficiency and vulnerability to preference manipulation.

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And here's a theoretical paper by Xiang Han (韩翔)

Xiang Han, On the efficiency and fairness of deferred acceptance with single tie-breaking, Journal of Economic Theory, Volume 218, 2024, https://doi.org/10.1016/j.jet.2024.105842. (https://www.sciencedirect.com/science/article/pii/S0022053124000486)

Abstract: As a random allocation rule for indivisible object allocation under weak priorities, deferred acceptance with single tie-breaking (DA-STB) is not ex-post constrained efficient. We first observe that it also fails to satisfy equal-top fairness, which requires that two agents be assigned their common top choice with equal probability if they have equal priority for it. Then, it is shown that DA-STB is ex-post constrained efficient, if and only if it is equal-top fair, if and only if the priority structure satisfies a certain acyclic condition. We further characterize the priority structures under which DA-STB is ex-post stable-and-efficient. Based on the characterized priority domains, and using a weak fairness notion called local envy-freeness, new theoretical support is provided for the use of this rule: for any priority structure, among the class of strategy-proof, ex-post stable, symmetric, and locally envy-free rules, each of the above desiderata—ex-post constrained efficiency, ex-post stability-and-efficiency, and equal-top fairness—can be achieved if and only if it can be achieved by DA-STB.

Participating in the Haj through the black market

 Saudi Arabia is a bit more open to tourism than it used to be, and that may be making it easier for black market operators to bring pilgrims on the Haj to Mecca without paying the required fees and getting the customary accomodations.

The NYT has the story:

Pilgrim Deaths in Mecca Put Spotlight on Underworld Hajj Industry  Most of the more than 1,300 people who died making the Islamic pilgrimage were not formally registered, a Saudi official said. That left them with little access to protection from the brutal heat.  By Emad Mekay and Vivian Nereim

"The deaths of more than a thousand pilgrims in Saudi Arabia for the hajj have put a spotlight on an underworld of illicit tour operators, smugglers and swindlers who profit off Muslims desperate to meet their religious duty to travel to Mecca.

"While registered pilgrims are transported around the shrines in air-conditioned buses and rest in air-conditioned tents, undocumented ones are often exposed to the elements, making them more vulnerable to extreme heat. 

...

"the Saudi health minister, Fahd al-Jalajel, said that 83 percent of the more than 1,300 deaths occurred among pilgrims who had not had official permits.

“The rise in temperatures during the hajj season represented a big challenge this year,” he said. “Unfortunately — and this is painful for all of us — those who didn’t have hajj permits walked long distances under the sun.”

...

"because so many of the pilgrims who died this year were performing the pilgrimage without official documentation, their deaths exposed the underworld of unlicensed tour operators, smugglers and swindlers who take advantage of pilgrims desperate to perform the hajj, helping them evade the regulations.

...

"In interviews with The New York Times, hajj tour operators, pilgrims and relatives of the dead said the number of undocumented pilgrims appeared to have been driven up by rising economic desperation in countries like Egypt and Jordan. An official hajj package can cost more than $5,000 or $10,000, depending on a pilgrim’s country of origin — far beyond the means of many hoping to make the trip.

"But they also described easily exploited loopholes in Saudi Arabia’s regulations that allowed undocumented pilgrims to travel to the kingdom with a tourist or visitor visa several weeks ahead of hajj. Once they arrive, they find a network of illegal brokers and smugglers who offer their services, take their money and sometimes abandon them to fend for themselves, they said."

Experimental Economics sessions at Stanford (SITE) this summer

Here's the preliminary program for this summer's experimental economics at Stanford. 

Session 13: Experimental Economics

Thu, Aug 22 2024, 8:00am - Fri, Aug 23 2024, 5:00pm PDT

John A. and Cynthia Fry Gunn Building, 366 Galvez Street, Stanford, CA 94035

ORGANIZED BY

Christine Exley, University of Michigan

Judd Kessler, University of Pennsylvania

Muriel Niederle, Stanford University

Alvin Roth, Stanford University

Lise Vesterlund, University of Pittsburgh

This workshop will be dedicated to advances in experimental economics combining laboratory and field-experimental methodologies with theoretical and psychological insights on decision-making, strategic interaction and policy. We would invite papers in lab experiments, field experiments and their combination that test theory, demonstrate the importance of psychological phenomena, and explore social and policy issues. In addition to senior faculty members, invited presenters will include junior faculty as well as graduate students.

Thursday, August 22, 2024

9:30 AM - 10:00 AM PDT

Check-In & Breakfast

10:00 AM - 10:30 AM PDT

Flexible Pay and Labor Supply: Evidence from Uber’s Instant Pay

Presented by: Keith Chen (University of California, Los Angeles)

Co-author(s): Katherine Feinerman (University of California, Los Angeles) and Kareem Haggag (University of California, Los Angeles)

Modern tech platforms provide workers real-time control over when they work, and increasingly, flexible pay: the option to be paid immediately after work. We investigate the labor supply effects of pay flexibility and the implications of present-biased preferences among gig-economy workers. Using granular data from a nationwide randomized controlled trial at Uber, we estimate the effects of switching from a fixed weekly pay schedule to Instant Pay, a system that allows on-demand, within-day withdrawals. We find that flexible pay substantially increased both drivers’ work time and earnings (ITT 2%; TOT: 18-37%). Furthermore, the response is significantly higher when drivers are further away from the end of their counterfactual weekly pay cycle, aligning with predictions of hyperbolic discounting models. We discuss welfare and broader implications in contexts in which workers have the ability to flexibly supply labor.

10:30 AM - 10:45 AM PDT

Eviction as Bargaining Failure: Hostility and Misperceptions in the Rental Housing Market

Presented by: Charlie Rafkin (Massachusetts Institute of Technology)

Co-author(s): Evan Soltas (Massachusetts Institute of Technology)

Court evictions from rental housing are common but could be avoided if landlords and tenants bargained instead. Such evictions are inefficient if they are costlier than bargaining. We test for two potential causes of inefficient eviction — hostile social preferences and misperceptions — by conducting lab-in-the-field experiments in Memphis, Tennessee with 1,808 tenants at risk of eviction and 371 landlords of at-risk tenants. We detect heterogeneous social preferences: 24% of tenants and 15% of landlords exhibit hostility, giving up money to hurt the other in real-stakes Dictator Games, yet more than 50% of both are highly altruistic. Both parties misperceive court or bargaining payoffs in ways that undermine bargaining. Motivated by the possibility of inefficient eviction, we evaluate the Emergency Rental Assistance Program, a prominent policy intervention, and find small impacts on eviction in an event-study design. To quantify the share of evictions that are inefficient, we estimate a bargaining model using the lab-in-the-field and event-study evidence. Due to hostile social preferences and misperceptions, one in four evictions results from inefficient bargaining failure. More than half would be inefficient without altruism. Social preferences weaken policy: participation in emergency rental assistance is selected on social preferences, which attenuates the program’s impacts despite the presence of inefficiency.

10:45 AM - 11:00 AM PDT

Workplace Hostility

Presented by: Manuela Collis (University of Toronto)

Co-author(s): Clémentine Van Effenterre (University of Toronto)

We conduct a choice experiment with 2,048 participants, recruited among upper-year students, recent graduates, and alums from a large public university, to understand how much individuals value a workplace free of hostility and whether this can be offset with hybrid or solo work arrangements. In the experiment, we ask respondents to choose between two job offers for thirteen distinct and realistic scenarios. Our experiment shows that people are willing to forgo a significant portion of their earnings to avoid hostile work environments—15 to 30 percent of their wage. Women report a stronger preference for inclusive workplaces and environments free of sexual harassment. We also find that women value hybrid work twice as much in the presence of sexual harassment and value teamwork more in non-inclusive environments. Based on these findings, we introduce a model of compensating differentials to understand how the presence of hostility shapes the demand for alternative work arrangements and to implement policy counterfactuals.

11:00 AM - 11:30 AM PDT  Coffee Break

11:30 AM - 12:00 PM PDT

Why Exclude Test Scores from Admission Decisions?

Presented by: Yucheng Liang (Carnegie Mellon University)

Co-author(s): Wenzhuo Xu (Carnegie Mellon University)

One major argument in support of test-optional and test-blind college admission policies is that standardized test scores inaccurately reflect students’ abilities and are biased against those with fewer resources. This argument goes against standard economic reasoning as information, even if noisy or biased, never has negative value. In an experiment, we show that participants responsible for admitting students for an educational opportunity are indeed willing to exclude invalid or biased test scores from their admission criteria. This result is primarily driven by procedural fairness concerns and an underestimation of the scores’ usefulness. However, this underestimation can be mitigated through experience in making admission decisions both with and without these test scores.

12:00 PM - 12:30 PM PDT

Mechanism Design for Personalized Policy: A Field Experiment Incentivizing Exercise

Presented by: Rebecca Dizon-Ross (University of Chicago)

Co-author(s): Ariel Zucker(University of California, Santa Cruz)

Personalizing policies can theoretically increase their effectiveness. However, personalization is difficult when individual types are unobservable and the preferences of policymakers and individuals are not aligned, which could cause individuals to mis-report their type. Mechanism design offers a strategy to overcome this issue: offer a menu of policy choices, and make it incentive-compatible for participants to choose the “right” variant. Using a field experiment that personalized incentives for exercise among 6,800 adults with diabetes and hypertension in urban India, we show that personalizing with an incentive-compatible choice menu substantially improves program performance, increasing the treatment e↵ect of incentives on exercise by 80% with-out increasing program costs relative to a one-size-fits-all benchmark. Personalizing with mechanism design also performs well relative to another potential strategy for personalization: assigning policy variants based on observables.

2:00 PM - 2:30 PM PDT

What Money Shouldn’t Buy: Aversion to Monetary Incentives for Health Behaviors

Presented by: Florian H. Schneider (University of Copenhagen)

Co-author(s): Pol Campos-Mercade (Lund University and Institute for Future Studies), Armando Meier (University of Basel) and Roberto A. Weber (University of Zurich)

We study attitudes towards offering monetary payments for health behaviors, aiming to understand how such attitudes may influence the use of monetary incentives as a policy instrument. We develop the Policy Lab, an experimental paradigm in which participants decide whether to provide a set of others with monetary incentives for vaccination. In two studies with representative samples of the Swedish population (N=2,010) and one with Swedish policymakers (N=2,008), a majority of participants oppose using direct financial incentives. Despite the widespread perception that such incentives are an effective policy instrument, opposition to their use is driven by perceptions that they are coercive and unethical. Policymakers are, if anything, slightly more opposed to the use of direct financial incentives. We also document that opposition to incentives extends beyond vaccination to other health domains. Our findings suggest that public opposition to the use of monetary incentives as a policy instrument may create barriers to their adoption.

2:30 PM - 3:00 PM PDT

Goals, Expectations, and Performance

Presented by: Alexandra Steiny Wellsjo (University of California, San Diego)

Co-author(s): Avner Strulov-Shlain (University of Chicago)

People and organizations often set goals to self-motivate and achieve better outcomes in challenging tasks. But goals, and their effectiveness, might depend on what people expect to happen. Do goals reflect expectations or do goals set expectations? How do goals and expectations affect performance? We run an online real-effort task to answer these two questions by introducing exogenous variation in goals and expectations. First, we find that goals mostly reflect expectations rather than affect them. Second, practicing an easier version of a task leads to higher expectations and higher performance. Eliciting a goal leads to higher performance as well. However, controlling for expectations, changing the difficulty of the goal has no discernible effect. These results suggest that people should come in optimistic and set a goal, but they cannot fool themselves into expecting and doing more simply by choosing a higher goal.

3:00 PM - 3:30 PM PDT

Coffee Break

3:30 PM - 4:00 PM PDT

Understanding Expert Choices Using Decision Time

Presented by: Stefano DellaVigna (University of California, Berkeley)

Co-author(s): David Card (University of California, Berkeley), Chenxi Jiang (University of California, Berkeley), and Dmitry Taubinsky (University of California, Berkeley)

Laboratory experiments find a robust relationship between decision times and perceived values of alternatives. This paper investigates how these findings translate to experts’ decision making and information acquisition in the field. In a stylized model of expert choice between two alternatives, we show that (i) less-commonly chosen al- ternatives are more likely to be chosen later than earlier; (ii) decision time is higher when the likelihood of choosing each alternative is closer to fifty percent; and (iii) the ultimate quality of the chosen alternative may increase or decrease with decision time, depending on whether earlier or later signals are more informative. We test these pre-dictions in the editorial setting, where we observe proxies for paper quality and signals available to editors. We document that (i) the probability of a positive decision rises with decision time; (ii) average decision time is higher when our estimated probability of a positive decision is closer to fifty percent; and (iii) paper quality is positively (negatively) related to decision time for papers with Reject (R&R) decisions. Structural estimates show that the additional information acquired in editorial delays is modest, and has little impact on the quality of decisions.

4:00 PM - 4:15 PM PDT

Choosing Between Information Bundles

Presented by: Menglong Guan (Penn State University)

This paper presents an experimental study on how people choose sets of information sources (referred to as information bundles). The findings reveal that subjects frequently fail to choose the more instrumentally valuable bundle in binary choices, largely due to the challenge of integrating the information sources within a bundle to identify their joint information content. The mistakes in choices can not be attributed to an inability to use information bundles. Instead, these mistakes are strongly ex-plained by subjects’ tendency to follow a simple but imperfect heuristic when valuing them, which I call “common source cancellation (CSC)”. The heuristic causes subjects to mistakenly disregard the common information source in two bundles and focus solely on the comparison of the sources that the two bundles do not share. As a result, choices between information bundles are made without adequately considering the joint information content of each bundle. Notably, CSC emerges as a robust explanation for the information bundle choices for all subjects, including those who make perfect use of information bundles to make inferences.

4:15 PM - 4:30 PM PDT

Persuasion through Simulation

Presented by: John J. Conlon (Stanford University)

Co-author(s): Spencer Y. Kwon (Brown University)

We describe and experimentally test a model where an agent facing a complex decision forms beliefs by sampling or “simulating” relevant scenarios. Crucially, simulation is subject to cuing: scenarios similar to the agent’s current context are more easily simulated, and a persuader can manipulate the agents’ beliefs by altering this context. Even objectively uninformative messages simply highlighting known scenarios can be persuasive if they facilitate simulation of otherwise neglected scenarios. Experimentally, participants’ beliefs (about a lottery outcome and about others’ actions in a dictator game) are highly susceptible to such persuasion through simulation. We then study a consumer choice setting where a firm can cue its potential customers with particular scenarios and designs products with such “advertising” in mind. The firm chooses to highlight a single most compelling scenario and produces excessively “specialized” goods, with utility concentrated in scenarios its ads target. When the firm produces multiple goods, it additionally needs to consider how their ads cue each other. This force generates endogenous brands: products that the firm chooses to associate or dissociate depending on which scenarios it wants its consumers to simulate.

Friday, August 23, 2024

10:00 AM - 10:30 AM PDT

Who You Gonna Call? Gender Inequality in External Demand For Parental Involvement

Presented by: Olga Stoddard (Brigham Young University)

Co-author(s): Kristy Buzard (Syracuse University) and Laura K. Gee (Tufts University)

Gender imbalance in time spent on children causes labor market gender inequalities. We investigate a novel source of this inequality: external demands for parental involvement. We pair a theoretical model with a large-scale field experiment with a near-universe of US schools. Schools receive an email from a two-parent household and are asked to contact one parent. Mothers are 1.4 times more likely than fathers to be contacted. We decompose this inequality into discrimination stemming from differential beliefs about parents’ responsiveness versus other factors, including gender norms. Our findings underscore how agents outside the household contribute to gender inequalities.

10:30 AM - 11:00 AM PDT

Precautionary Debt Capacity

Presented by: Olivia Kim (Harvard University)

Co-author(s): Deniz Aydin (Washington University in St. Louis)

Firms with ample financial slack are unconstrained... or are they? In a field experiment that randomly expands debt capacity on business credit lines, treated small-and-medium enterprises (SMEs) draw down 35 cents on the dollar of expanded debt capacity in the short-run and 55 cents in the long-run despite having debt levels far below their borrowing limit before the intervention. SMEs direct new borrowing to financing investment gradually over time and do not exhibit a measurable impact on delinquencies. Heterogeneity analysis by the risk of being at the credit line limit supports the SME motive to preserve financial flexibility.

11:00 AM - 11:30 AM PDT

Coffee Break

11:30 AM - 12:00 PM PDT

Pushing the Envelope: The Effects of Negotiating

Presented by: Zoë Cullen (Harvard University)

12:00 PM - 12:30 PM PDT

Gender Diversity Improves Academic Performance

Presented by: Xiaoyue Shan (National University of Singapore)

This paper uses a field experiment in a first-semester course at a Swiss university to examine the impact of gender diversity on academic performance. 2,580 students across six cohorts are randomly assigned into 645 study groups with varying gender composition. Results show that group gender diversity significantly raises students’ course performance, especially for men. Moving from homogeneous to gender-balanced groups increases course grade by about 15% standard deviations. Analyses of mechanisms reveal that diversity enhances peer-to-peer interaction and students’ mental health, self-esteem, self-confidence, and group satisfaction. Diversity appears to lower women’s study effort and leads them to hold significantly more traditional gender attitudes, which may have limited diversity’s impact on their performance. The findings of this paper highlight the value of gender diversity in improving student performance and well-being in higher education.

12:30 PM - 2:00 PM PDT  Lunch

2:00 PM - 2:30 PM PDT

Over- and Underreaction to Information

Presented by: Cuimin Ba (University of Pittsburgh)

Co-author(s): J. Aislinn Bohren (University of Pennslyvania) and Alex Imas (University of Chicago)

This paper explores the impact of the learning environment on how people react to information. We develop a model of belief-updating where people respond to complexity by forming a representation of the environment that channels attention to states that are most salient given the observed information. They then use this distorted representation to process the information using Bayes’ rule, subject to cognitive imprecision. The model predicts overreaction when environments are complex, signals are noisy, or priors are concentrated on less salient states; it predicts underreaction when environments are simple, signals are precise, or priors concentrated on salient states. Results from a series of pre-registered experiments provide support for these predictions and demonstrate their robustness across different learning environments and decision domains. We then provide evidence for the specific cognitive mechanisms by manipulating attention and salience directly. We also show that the proposed model is highly complete in capturing explainable variation in belief-updating; moreover, the interaction between psychological mechanisms is critical to explaining belief data in more complex settings. These results connect disparate findings in prior work: underreaction is typically found in laboratory studies, which feature simple learning settings, while overreaction is prevalent in financial markets, which feature more complex environments.

2:30 PM - 3:00 PM PDT

Numbers Tell, Words Sell

Presented by: Michael Thaler (University College London)

Co-author(s): Mattie Toma (University of Warwick) and Victor Yaneng Wang (University of Oxford)

3:00 PM - 3:30 PM PDT

Coffee Break

3:30 PM - 4:00 PM PDT

A competitive world

Presented by: Bertil Tungodden (NHH Norwegian School of Economics)

Co-author(s): Thomas Buser (University of Amsterdam), Alexander W. Cappelen (NHH Norwegian School of Economics), and Uri Gneezy (University of California, San Diego)

We elicit willingness to compete in large and representative samples in 62 countries covering all continents. We also shed light on the socialization of boys and girls around the globe by eliciting the importance adults attach to boys’ and girls’ willingness to compete. Globally, a clear majority of people are willing to compete against others and find it important that children are willing to compete. Nevertheless, the shares vary strongly across countries and we show that this variation is correlated with inequality: people in more unequal countries are more competitive and find it more important that children are willing to compete. We also document some near-universal patterns that replicate the main findings of the competitiveness literature at a global scale: in all but one country, men are more competitive than women, and in the vast majority of countries willingness to compete is positively associated with income and level of education. Despite the near-universal gender gap in competitiveness among adults, people in many – mostly Western – countries place greater importance on girls’ than boys’ willingness to compete.

4:00 PM - 4:15 PM PDT

Breaking the Spiral of Silence

Presented by: Yihong Huang (Harvard University)

Co-author(s): Yuen Ho (University of California, Berkeley)

The Spiral of Silence theory plays a crucial role in contemporary political discourse. According to this idea, people who hold views perceived as socially inappropriate tend to self-censor, generating a distribution of expressed views that is skewed towards appropriate opinions. If the attention paid to silence is limited, this can exacerbate self-censorship and create an equilibrium where only socially appropriate views are expressed and considered dominant. We experimentally test this hypothesis based on a simple model in which self-censorship and limited attention to silence interact to jointly establish equilibrium norms. In our experiment, UC Berkeley undergraduates discuss controversial political and socioeconomic issues. Students with socially inappropriate views self-censor to a significant degree. Given the limited attention students pay to silence, self-censorship amplifies over time. We experimentally increase the salience of silence, and show that this affects both beliefs about others’ views and public expression decisions. Because inference and expression amplify each other, different levels of attention to silence can produce divergent perceived social norms in equilibrium.

4:15 PM - 4:30 PM PDT

Social Media and Job Market Success: A Field Experiment on Twitter

Presented by: Jingyi Qiu (University of Michigan)

Co-author(s): Yan Chen (University of Michigan), Alain Cohn (University of Michigan), and Alvin Roth (Stanford University)

We conducted a field experiment on Twitter to examine how social media promotion affects job market outcomes in economics. We tweeted 519 candidates’ job market papers from our research account and randomly assigned half of these tweets to be quote-tweeted by prominent economists in their fields. We find that the quote-tweeted papers received 442% more views and 303% more likes on Twitter. Further- more, treatment group candidates received one more flyout, whereas treatment group women received 0.9 more job offers. Our results suggest that social media promotion can improve the visibility and success of job market candidates, especially women.

Market design at Stanford

 Two recent Stanford news stories focus on market design:

Symposium inaugurates Center for Computational Market Design. The new center will bring interdisciplinary expertise to bear on crafting rules and procedures for creating and improving markets.

"In an interview, Amin Saberi, a co-director of the center and professor of management science and engineering, said he hopes that research by the center’s members can inform market-related policy decisions in health care, education, transportation, electricity, and the environment.

“One of our goals is to collaborate with industry and the government to analyze existing markets and improve their performance,” Saberi said. “We also hope that the center becomes a launchpad for prototyping new marketplaces.”

Itai Ashlagi, the center’s other co-director and a professor of management science and engineering, said in an interview that the rise of artificial intelligence played a role in the decision to launch the center. “AI is going to be a big player in marketplaces,” he said.

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For the Colorado River and beyond, a new market could save the day. Stanford economist Paul Milgrom won a Nobel Prize in part for his role in enabling today’s mobile world. Now he’s tackling a different 21st century challenge: water scarcity.

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Earlier:

Sunday, January 7, 2024

Market Design for Surface Water , by Ferguson and Milgrom

Global pacemaker retransplantation

 There are innovative approaches to global health care.  Here is one, that involves reusing pacemakers recovered from deceased donors and refurbished for use in countries where pacemakers are too expensive for wide use.  Unlike some of what we encounter in kidney transplants across borders, the legal bans that have to be overcome may not come from the war against the poor.  A careful clinical trial is underway. There is also an unregulated black market...

Here's the encouraging story from Helio.com:

After death, a new life for refurbished pacemakers in low-, middle-income countries, February 23, 2024

"Lack of access to pacemakers is a major challenge to the provision of CV health care in low- and middle-income countries; however, postmortem pacemaker utilization could offer an opportunity to deliver this needed care, according to Thomas Crawford, MD, an electrophysiologist and associate professor of internal medicine at University of Michigan Health and the medical director of My Heart Your Heart, a cardiac pacemaker reuse initiative at the University of Michigan Cardiovascular Center

...

"Crawford: The need is great. Each year, somewhere between 1 million and 2 million people worldwide die due to a lack of access to pacemakers and defibrillators. There is literature reflecting this. When you query pacemaker implantation data for the United States, it is roughly 800 pacemakers per 1 million population. When you query countries like, for example, Nigeria, it says four pacemakers per million. Quite a difference.

"Per capita gross domestic product is such that, in many countries, a pacemaker costs more than a person’s annual income.

...

"Healio: What are the regulations around using a refurbished pacemaker?

"Crawford: Pacemaker reuse is illegal in all jurisdictions. The FDA states that pacemaker reuse is an “objectionable practice.” We know we can do it, but we need to develop partnerships with other entities to give us credibility. One of those methods to do this is by engaging the government. FDA issues export permits for this type of activity. We created a protocol where we reprocess the device, working with Northeast Scientific, which provides the pacemaker cleaning and sterilization. We have received permission from the FDA to export them. We have to put a sticker on them saying “not for use in the United States.” We are doing this in countries in which governments will allow it. One of the limitations is needing a government letter from each of the recipient countries. We have about 12 countries now, and the collection of countries we are working with is purely accidental. It is not a normal methodological process. A lot of it is through contact with individuals and opportunities that arise.

...

"Healio: You are leading a randomized controlled trial called Project My Heart Your Heart: Pacemaker Reuse. What is the study design, and what do you and your colleagues hope to learn?

"Crawford: The objective of the clinical trial is to determine if pacemaker reutilization can be shown to be a safe means of delivering pacemakers to patients in low- and middle-income countries without resources. The target enrollment is 270 patients, all from outside the United States, who each have a class I indication for pacing and who attest that they do not have the ability to purchase a device on their own. They must consent to be randomly assigned to receive either a brand-new pacemaker, which we purchase, or a reprocessed pacemaker, for which we provide the leads and accessories. Donated devices are inspected according to specific protocols that evaluate physical and electrical suitability, including battery longevity, for future use. Devices deemed to be acceptable are shipped to a third-party vendor, Northeast Scientific, for disassembly, cleaning and re-sterilization. There will be about 130 participants in each arm. We will follow those patients and report any adverse events. The countries that have contributed patients include Kenya, Nigeria, Paraguay, Sierra Leone and Venezuela. We hope to soon begin enrolling patients in Mexico and Mozambique.

"I have had clinicians outside the U.S. who tell me they removed a pacemaker device, cleaned it, reprocessed it and then implanted it in someone else — but the government does not know about it. This practice does happen and it is not regulated in any way; patients and physicians know about it and keep it quiet. The difference with what we are doing and these other efforts is we bring it to a much higher level, because that is what the FDA requires. "

The DOJ on competition for workers

 A lot of market design is done by regulators, and some of that is done to enforce existing laws.  Here's a report from the Department of Justice, focusing on four cases involving payment to workers (including authors of books).

Athey, Susan, Mark Chicu, Malika Krishna, and Ioana Marinescu. "The Year in Review: Economics at the Antitrust Division, 2022–2023." Review of Industrial Organization (2024): 1-20.

"In this review article, we report on five enforcement matters that expanded the scope of enforcement by the Division. The first four enforcement matters highlight a number of the Division’s actions to protect labor market competition in criminal and civil merger and non-merger cases. These include: criminal enforcement against a provider of contract health care staffing services that allocated nurse employees through a no-poaching agreement and agreed to fix the wages of those nurses; civil enforcement to stop an e-Sports league from effectively imposing a salary cap on its players; civil enforcement to stop a conspiracy among poultry processors to share information about worker compensation; and the successful challenge of a merger between two of the largest book publishers in the U.S., which preserved competition for books that will benefit authors."

Guns and drugs on the U.S. Mexico border

 Here are two stories about some of the illegal traffic on the border between the U.S. and Mexico.

First, the war on drugs is fought with American guns on both sides:

The NY Times has the story:

Appeals Court Revives Mexico’s Lawsuit Against Gunmakers. The decision, which is likely to be appealed, is one of the most significant setbacks for the gun industry since passage of a federal law that provided immunity from some lawsuits.  By Glenn Thrush  Jan. 22, 2024

"A federal appeals panel in Boston ruled on Monday that a $10 billion lawsuit filed by Mexico against U.S. gun manufacturers whose weapons are used by drug cartels can proceed, reversing a lower court that had dismissed the case.

"The decision, which is likely to be appealed, is one of the most significant setbacks for gunmakers since passage of a federal law nearly two decades ago that has provided immunity from lawsuits brought by the families of people killed and injured by their weapons.

"Mexico, in an attempt to challenge the reach of that law, sued six manufacturers in 2021, including Smith & Wesson, Glock and Ruger. It contended that the companies should be held liable for the trafficking of a half-million guns across the border a year, some of which were used in murders.

...

" lawyers for Mexico, assisted by U.S. gun control groups, claimed that the companies “aided and abetted the knowingly unlawful downstream trafficking” of their guns into Mexico.

"Gun violence is rampant in Mexico despite its near-blanket prohibition of firearms ownership.

"About 70 to 90 percent of guns trafficked in Mexico originated in the United States, according to Everytown Law, the legal arm of the gun control group founded by the former mayor of New York Michael R. Bloomberg.

"Gun control advocates hailed the decision on Monday by a three-judge panel, describing it as a milestone in holding the gun industry accountable."

***********

As for drugs, it turns out that harm reduction drugs are highly controlled in Mexico, so illegal drugs also flow both ways.

Here's that story, from the Guardian:

Carriers sneak life-saving drugs over border as Mexico battles opioid deaths  People forced to bring overdose-reversal drug naloxone from US, as critics accuse Mexican government of creating shortage. by Thomas Graham in Tijuana, Tue 23 Jan 2024 

"Every day, people cross the US-Mexico border with drugs – but not all of them are going north. Some head in the opposite direction with a hidden cargo of naloxone, a life-saving medicine that can reverse an opioid overdose but is so restricted as to be practically inaccessible in Mexico.

"This humanitarian contraband is necessary because Mexico’s border cities have their own problems with opioid use – problems that activists and researchers say are being made more deadly by government policy.

“Mexico has long seen itself as a production and transit country, but not a place of consumption,” said Cecilia Farfán Méndez, a researcher at the University of California at San Diego. “And a lot of the conversation is still around that being a US problem – not a Mexican one.”

...

"The situation has been exacerbated by a government policy that, aside from cutting budgets for harm reduction services like PrevenCasa, has also created shortages of life-saving medicines for opioid users.

"In response to the fentanyl crisis, authorities in the US made naloxone available without a prescription. Naloxone vending machines have proliferated across the country.

"But in Mexico naloxone remains strictly controlled – despite the efforts of some senators from Andrés Manuel López Obrador’s own party, Morena, who proposed a law to declassify it.

"The president, popularly known as Amlo, has criticised naloxone, asking whether it did any more than “prolong the agony” of addicts, and questioning who stood to profit from its sale."

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Earlier:

Sunday, January 22, 2023

The trade in guns and drugs on the Mexico-US border

The EU proposes strengthening bans on compensating donors of Substances of Human Origin (SoHOs)--op-ed in VoxEU by Ockenfels and Roth

 The EU has proposed a strengthening of European prohibitions against compensating donors of "substances of human origin" (SoHOs).  Here's an op-ed in VoxEU considering how that might effect their supply.

Consequences of unpaid blood plasma donations, by Axel Ockenfels and  Alvin Roth / 4 Nov 2023

"The European Commission is considering new ways to regulate the ‘substances of human origin’ – including blood, plasma, and cells – used in medical procedures from transfusions and transplants to assisted reproduction. This column argues that such legislation jeopardises the interests of both donors and recipients. While sympathetic to the intentions behind the proposals – which aim to ensure that donations are voluntary and to protect financially disadvantaged donors – the authors believe such rules overlook the effects on donors, on the supply of such substances, and on the health of those who need them.

"Largely unnoticed by the general public, the European Commission and the European Parliament’s Health Committee have been drafting new rules to regulate the use of ‘substances of human origin’ (SoHO), such as blood, plasma, and cells (Iraola 2023, European Parliament 2023). These substances are used in life-saving medical procedures ranging from transfusions and transplants to assisted reproduction. Central to this legislative initiative is the proposal to ban financial incentives for donors and to limit compensation to covering the actual costs incurred during the donation process. The goal is to ensure that donations are voluntary and altruistic. The initiative aims to protect the financially disadvantaged from undue pressure and prevent potential misrepresentation of medical histories due to financial incentives. While the intention is noble, the proposal warrants critical analysis as it may overlook the detrimental effects on donors themselves, on the overall supply of SoHOs, and consequently on the health, wellbeing, and even the lives of those who need them. We illustrate this in the context of blood plasma donation.

"Over half a century ago, Richard Titmuss (1971) conjectured that financial incentives to donate blood could compromise the safety and overall supply. This made sense in the 1970s, when tests for pathogens in the blood supply were not yet developed. But Titmuss’ conjecture permeated policy guidelines worldwide, despite mounting evidence to the contrary. Although more evidence is needed, a review published by Science (Lacetera et al. 2013; see also Macis and Lacetera 2008, Bowles 2016), which looked at the evidence available more than 40 years after Titmuss’ conjecture, concluded that the statistically sound, field-based evidence from large, representative samples is largely inconsistent with his predictions.

"Getting the facts right is important because, at least where blood plasma is concerned, the volunteer system has failed to meet demand (Slonim et al. 2014). There is a severe and growing global shortage of blood plasma. While many countries are unwilling to pay donors at home, they are willing to pay for blood plasma obtained from donors abroad. The US, which allows payment to plasma donors, is responsible for 70% of the world’s plasma supply and is also a major supplier to the EU, which must import about 40% of its total plasma needs. Together with other countries that allow some form of payment for plasma donations – including EU member states Germany, Austria, Hungary, and the Czech Republic – they account for nearly 90% of the total supply (Jaworski 2020, 2023). Based on what we know from controlled studies and from experiences with previous policy changes, a ban on paid donation in the EU will reduce the amount of plasma supplied from EU members, prompting further attempts to circumvent the regulation by importing even more plasma from countries where payment is legal. At the same time, a ban will contribute to the global shortage of plasma, further driving up the price and making it increasingly unaffordable for low-income countries (Asamoah-Akuoko et al. 2023). In the 1970s, it may have been reasonable to worry that encouraging paid donation would lead to a flow of blood plasma from poor nations to rich ones. That is not what we are in fact seeing. Instead, plasma supplies from the US and Europe save lives around the world.

"In other areas, society generally recognises the need for fair compensation for services provided, especially when they involve discomfort or risk. After all, it is no fun having someone stick a needle in your arm to extract blood. This consensus cuts across a range of services and professions – including nursing, firefighting, and mining – occupations, most people would agree, that should be well rewarded for the risk involved and value to society. To rely solely on altruism in such areas would be exploitative and would eventually lead to a collapse in provision. Indeed, to protect individuals from exploitation, labour laws around the world have introduced minimum compensation requirements rather than caps on earnings. In addition, payment bans on donors, even if they’re intended to protect against undue inducements, raise concerns about price-fixing to the benefit of non-donors in the blood plasma market. In a related case, limits on payment to egg donors have been successfully challenged in US courts. 1

"In addition, policy decisions affecting vital supplies such as blood plasma should be based on a broad discourse that includes diverse perspectives and motivations. Ethical judgements often differ, both among experts and between professionals and the general public, so communication is essential (e.g. Roth and Wang 2020, Ambuehl and Ockenfels 2017). Payment for blood plasma donations is an example. We (the authors of this article) are from the US and Germany, countries that currently allow payment for blood plasma donations while most other countries prohibit payment. On the other hand, prostitution is legal in Germany but surrogacy is not, while the opposite is true in most of the US. And while Germany currently prohibits kidney exchange on ethical grounds, other countries – including the US, the UK, and the Netherlands – operate some of the largest kidney exchanges in the world and promote kidney exchange on ethical grounds.

"The general public does not always share the sentiments that health professionals find important (e.g. Lacetera et al. 2016). This tendency is probably not due to professionals being less cognitively biased. In all areas where the question has been studied, experts such as financial advisers, CEOs, elected politicians, economists, philosophers, and doctors are just as susceptible to cognitive bias as ordinary citizens (e.g. Ambuehl et al. 2021, 2023). Recognising the similarities and differences between professional and popular judgements, and how ethical judgements are affected by geography, time, and context, allows for a more constructive and effective search for the best policy options.

"In our view, the dangers of undersupply of critical medical substances, of inequitable compensation (particularly for financially disadvantaged donors), and of circumvention of regulation by sourcing these substances from other countries (where the EU has no influence on the rules for monitoring compensation to protect donors from harm) are at least as significant as those arising from overpayment. Carefully designed transactional mechanisms may also help to respect ethical boundaries while ensuring adequate supply. Advances in medical and communication technologies, such as viral detection tests, can effectively monitor blood quality and ensure the safety and integrity of the entire donation process – including the deferral of high-risk donors and those for whom donating is a risk to their health – without prohibiting payment to donors. Even if it is ultimately decided that payments should be banned, there are innovations in the rules governing blood donation that have been proposed, implemented, and tested that would improve the balance between blood supply and demand within the constraints of volunteerism; non-price signals, for instance, can work within current social and ethical constraints.

"As the EU deliberates on this legislation, it is imperative to adopt a balanced, empirically sound, and research-backed approach that considers multiple effects and promotes policies to safeguard the interests of both donors and recipients.

References

Asamoah-Akuoko, L et al. (2023), “The status of blood supply in sub-Saharan Africa: barriers and health impact”, The Lancet 402(10398): 274–76.

Ambuehl, S and A Ockenfels (2017), “The ethics of incentivizing the uninformed: A vignette study”, American Economic Review Papers & Proceedings 107(5), 91–95.

Ambuehl, S, A Ockenfels and A E Roth (2020), “Payment in challenge studies from an economics perspective”, Journal of Medical Ethics 46(12): 831–32.

Ambuehl, S, S Blesse, P Doerrenberg, C Feldhaus and A Ockenfels (2023), “Politicians’ social welfare criteria: An experiment with German legislators”, University of Cologne, working paper.

Ambuehl, S, D Bernheim and A Ockenfels (2021), “What motivates paternalism? An experimental study”, American Economic Review 111(3): 787–830.

Bowles S (2016), “Moral sentiments and material interests: When economic incentives crowd in social preferences”, VoxEU.org, 26 May.

European Parliament (2023), “Donations and treatments: new safety rules for substances of human origin”, press release, 12 September.

Iraola, M (2023), “EU Parliament approves text on donation of substances of human origin”, Euractiv, 12 September.

Jaworski, P (2020), “Bloody well pay them. The case for Voluntary Remunerated Plasma Collections”, Niskanen Center.

Jaworski, P (2023), “The E.U. Doesn’t Want People To Sell Their Plasma, and It Doesn’t Care How Many Patients That Hurts”, Reason, 20 September.

Lacetera, N, M Macis and R Slonim (2013), “Economic rewards to motivate blood donation”, Science 340(6135): 927–28.

Lacetera, N, M Macis and J Elias (2016), “Understanding moral repugnance: The case of the US market for kidney transplantation”, VoxEU.org, 15 October.

Macis M and N Lacetera (2008), “Incentives for altruism? The case of blood donations”, VoxEU.org, 4 November.

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Footnotes: 1. Kamakahi v. American Society for Reproductive Medicine, US District Court Northern District of California, Case 3:11-cv-01781-JCS, 2016.