Same sex marriage; recent developments

Same sex marriage continues to provide a window on repugnant transactions, i.e. transactions some people think other people shouldn't engage in.

January 5: New Jersey makes last-minute bid for gay marriage "New Jersey's state Senate will vote on legalizing same-sex marriage this week, officials announced on Tuesday, in a race against the clock before a new governor who opposes the measure takes office."
January 9: Gay marriage in New Jersey, once a sure thing, became tracked for defeat "Thursday’s state Senate defeat of the controversial bill, considered a "slam dunk" to pass just a few months ago, also was a simple case of what happens in the bare-knuckle world of New Jersey politics."

January 8: Same-sex marriage law backed in Portugal's parliament "Portugal's parliament has passed a law to legalise same-sex marriage, but rejected proposals to allow homosexual couples to adopt.
The bill was approved with the support of the governing Socialist Party and other parties further to the left.
...The law has been fiercely opposed by conservatives in the Catholic country."

January 11: Pope says gay marriage threat to creation "Pope Benedict on Tuesday linked the Church's opposition to gay marriage to concern about the environment, suggesting that laws undermining "the differences between the sexes" were threats to creation."

January 12: Historic court battle decides legality of 'gay marriage' in America "Americans could be forced to accept the legality of “gay marriage” in all 50 states of the union, depending on the outcome of an historic federal court battle that began in California yesterday.
The hearing in San Francisco — which was supposed to have been shown on YouTube before a decision by the Supreme Court to block the video feed — comes after 52 per cent of Californians voted to ban same-sex unions in 2008 with a ballot named Proposition 8. "

Mortgages, "strategic default," and repugnance

Steve Leider writes:
I’ve noticed lately that a lot of people (both public intellectuals like Megan McCardle and Rod Dreher as well as [other people I know]) seem to be really affronted at stories of people who walk away from mortgages that they can afford the payments on for houses that are under water (“strategic defaults”). Everybody seems to feel that even though this option is legal under the mortgage contract that this is somehow dishonorable or immoral. It’s a bit different from repugnance because while both parties voluntarily agreed to the contractual rules that allow this at the start, the bank probably isn’t happy about it now – but it has something of the same flavor of deep emotional disapproval of the economic activities of others.

http://meganmcardle.theatlantic.com/archives/2009/12/the_new_breed_of_deadbeats.php
http://blog.beliefnet.com/roddreher/2010/01/mortaging-ones-personal-honor.html

But see also Roger Lowenstein in the NY Times: Walk Away From Your Mortgage!
Update: see also Dick Thaler: Underwater, but Will They Leave the Pool?

Money laundering

Illegal markets, like those for narcotics, can't so easily make use of all the financial services provided by banks and other intermediaries, without leaving a trail for police investigators. So we have the phenomenon of "money laundering," designed to move the proceeds from illegal markets into the financial system so that they can be redeployed and enjoyed.

In some cases, money laundering may involve cash-intensive businesses that can simply report more sales than they actually make, and so transfer illegal currency into taxable revenue and bank accounts. In some cases it may involve the purchase and resale of portable assets. The police work associated with tracing this kind of crime involves the tracing of assets by forensic accountants, and agreements among banking authorities.

But apparently, for the part of the drug trade that moves drugs into the U.S. from Mexico, the most cost efficient way to launder the cash receipts is to physically smuggle currency in bulk back into Mexico: Along U.S.-Mexico Border, a Torrent of Illicit Cash. "Although United States authorities seized $138 million last year, that amount pales in comparison to the $18 billion to $39 billion a year the Drug Enforcement Agency estimates is being smuggled to Mexico every year."

Once in Mexico, it is apparently easy to turn dirty money into clean money, e.g. simply by exchanging it for pesos at a foreign exchange dealer. "A good portion of that is pooled by foreign exchange businesses and then shipped back to United States banks in armored trucks, experts on money laundering said."

And new financial instruments show up faster than laws to deal with them: "In a new trend, some organized crime groups have taken to smuggling prepaid money cards rather than cash, law enforcement officials say. United States treasury officials are working to require prepaid cards loaded with more than $10,000 to fall under the same reporting requirements as cash. Right now, anybody can walk or drive across the border with the cards filled with more than $10,000, without breaking any laws. "

Apparently the same hidden compartments in cross border vehicles that move the drugs in one direction can move the currency in the other, and so finding drug cash is a lot like finding drugs, and uses the same drug-sniffing dogs.
"The dogs and their handlers also find money, since most of it has traces of narcotics embedded in its paper. Drugs and cash are often stored or transported in the same compartments. "

The drugs and dogs game has quite a bit of a cat and mouse flavor to it: "There is an entire cottage industry devoted to building secret compartments in vehicles. Often the compartments will not open unless the driver takes a series of actions like pumping the brakes and turning on the dome light and the radio simultaneously. "

It's enough to make you appreciate bank accounts, checks, and credit cards, despite all the difficulty and fees in getting money wired to or from American banks as compared to European ones.

Here's a Department of Justice page on money laundering that makes clear the difference between contraband interdiction of the kind done by the Drug Enforcement Agency and asset tracking of the kind done by the IRS and other agencies, by showing big piles of seized cash.

European job market for economists: the RES meetings are coming up

The ASSA meetings in Atlanta were held the first weekend of January, and while that was the main venue for preliminary interviews by North American employers, others also participated, from all over the world.

There are also some European meetings with job market components.

The XXXIV Simposio de la Asociación Española de Economía (SAEe), was held in Valencia, Spain, on 10-12 December 2009. Here is their jobmarket page.

The Royal Economic Society (RES) PhD Presentation Meeting & Job Market, City University, London, is coming up, January 16th and 17th 2010.

Both of these marketplaces draw many fewer employers and applicants than the ASSA meetings.

A kidney exchange in Minnesota

Josephine Marcotty at the Minneapolis St. Paul Star Tribune continues to do a great job of reporting on kidney exchange. Here's her latest report: Doubling up on kidney donations.

"The two-way kidney swap between HCMC and the University of Maryland Medical Center this week was a dramatic example of the next best idea in transplant medicine: A highly choreographed computer exchange that matches living donors with people in kidney failure across the country. It promises to save millions of dollars in medical costs and end the ordeal facing many of the 80,000 kidney patients on the nation's transplant list, who face a wait of five years or more to get an organ from a deceased donor."

This exchange involved a highly sensitized patient:
"Very few people in the general population would have been a match for his patient, he said.
Only a large, computerized data base of potential donors could find her that "needle in a haystack," "
...
"These sophisticated national organ exchanges are still in their infancy, and Minnesota hospitals are only now beginning to participate. In November the Mayo Clinic did a four-way swap among three kidney patients at the Rochester clinic and one at its Arizona clinic. In the last two years, transplant centers in other states have done several hundred such paired exchanges. Late last year, the organization that manages the national transplant system for the federal government launched a pilot program that could eventually create a nationwide matching system.
Growing waiting list
With the rapid spread of kidney disease in the past two decades and an ever-longer waiting list for organs from deceased donors, "the wait times are becoming unpalatable," said Dr. Mark Odland, Johnson's transplant surgeon at HCMC. "You have to start looking for alternatives." "

Incentives for organ donors at MR and the WSJ

Alex Tabarrok writes at MR about Innovative Solutions to the Shortage of Transplant Organs, and at the WSJ: The Meat Market.

He discusses recent developments in transplantation policy in Israel and Singapore, among other things.

Critiques of higher education

Kevin Carey writes that colleges don't expose themselves to sufficient public scrutiny: That Old College Lie


Noam Scheiber worries (together with my HBS colleage Rakesh Khurana) that business schools are training managers in finance rather than production: Upper Mismanagement--Why can't Americans make things? Two words: business school.

Unraveling of primary elections

Further unraveling, that is.

NH Seeks to Stay No. 1 in Presidential Primaries
"New Hampshire lawmakers hope to erase any doubt that the state intends to continue holding the nation's first presidential primary election by making a small but important change to state law.
The House is set to vote Wednesday to give the secretary of state wider latitude in setting the primary's date to protect the state's tradition of being first. The Senate votes on the measure next if it passes the House, and it is widely expected to become law."
...
"State law currently requires the primary to be held seven days or more before any similar contest. The bill would attach the secretary of state's rights to that law and notes that its purpose is to protect the tradition of New Hampshire being first....The bill would give the secretary of state the flexibility ''to interpret other elections such as caucuses or conventions the way he determines is necessary to protect our primary status,'' Splaine said."
...
"The first contests in Iowa and New Hampshire bring those states enormous attention from presidential candidates and the media. New Hampshire steadfastly guards its role, pointing to its engaged electorate as evidence that its voters do a good job at winnowing the field.
Candidates know that winning New Hampshire's primary can propel their campaigns. Sen. John McCain and then-Sen. Hillary Rodham Clinton reignited their campaigns after winning the New Hampshire primary in 2008.
Jealous of all the attention, other states contend they better represent the nation than Iowa and New Hampshire, which have fewer people and less racial or ethnic diversity. They even challenged New Hampshire's tradition in the 2008 presidential primaries.
That led to the Iowa caucus being held on Jan. 3, 2008, and the New Hampshire primary five days later, on Jan. 8.
Secretary of State William Gardner waited until Nov. 21, 2007, to set the Jan. 8 primary date to make sure it would come before nominating contests in Nevada and South Carolina. Those states and six others broke national party rules by scheduling their contests before Feb. 5.
Democrats penalized Florida and Michigan delegates to the national party convention by counting only half their votes, while Republicans stripped votes from those states and three others, including New Hampshire.
The national Democratic calendar had called for the primary to be held Jan. 22 that year. After the New Hampshire secretary of state set the Jan. 8 date, state party leaders sought and got a waiver from the national party to have its delegates seated at the national convention.
Even if New Hampshire is stripped of delegates next time around, by holding the first primary it will retain its influence in selecting the next president, Splaine said."

Market for childbirth, when it comes with a passport

Quite a few places give citizenship to babies of (even) non-resident parents if they happen to be born there. The U.S. is one, and Hong Kong is another. There's another advantage to being born in Hong Kong to a mainland Chinese mother; the baby doesn't count against the "one child" quota. All this makes for a powerful incentive to deliver the baby in Hong Kong: Mainland Chinese mothers deluge maternity wards of Hong Kong hospitals
"Children born here to mainland Chinese women automatically receive permanent residency status, entitling them to benefits including free education, free medical care and a Hong Kong passport with visa-free access to more than 100 countries.
The Hong Kong government reported that, for the first six months of the year, 44 of every 100 babies born in the former British colony had mainland Chinese mothers. The figure was about 18 of 100 in 2002, after which border controls were eased. "

Martha Nussbaum on same sex marriage

Martha Nussbaum expresses the view that opposition to same sex marriage is related to physical disgust, when interviewed in the Sunday NY Times Magazine, about her forthcoming book “From Disgust to Humanity: Sexual Orientation and Constitutional Law,”: Gross National Politics .

I'm skeptical. Steve Leider and I, in a forthcoming article in the American Journal of Transplantation, report on a representative-sample survey on the repugnance of buying and selling kidneys for transplant. We start off this way:

"The demand for transplantable kidneys exceeds the supply. If kidneys were a purchased commodity, the gap between supply and demand would mean the price was too low. But in most countries, a market for organs is regarded as repugnant, and such markets are widely illegal. We use “repugnant” in its economic sense – in a repugnant transaction the participants are willing to transact, but third parties disapprove and wish to prevent the transaction (rather than in its psychological sense of eliciting disgust among potential participants). Hence repugnant transactions are often illegal (Roth, 2007)."

There's no evidence at all that kidney transplantation arouses either repugnance or disgust, and so the repugnance of kidney markets almost surely doesn't arise from the kind of automatic disgust that people experience when they encounter feces, for example. I'm skeptical that same sex marriage does either; how else to explain that many people who object to same sex marriage don't object to civil unions for same sex couples? But I haven't done an empirical study of same sex marriage, so I can only speculate on that. (I'll have to read Nussbaum's book when it comes out.)

See my earlier post, MA sues to overturn Defense of Marriage Act , which quotes from an earlier Nussbaum article, on the changing sentiment about interracial marriage.

My concern with confounding (economist style) repugnance with innate disgust is not because I don't think that people who want you to oppose some repugnant transaction don't try to recruit feelings of disgust, in themselves and in others. But I guess real disgust, on an evolutionary preference level, is harder to overcome, e.g. there won't soon be demand for chocolate fudge shaped like feces, for instance. (I say that despite this report from Catalonia, so I could be wrong about this...)

Polygamy in Malaysia

Malaysian Polygamy Club Draws Criticism
"“Men are by nature polygamous,” said Dr. Rohaya, Mr. Ikram’s third wife, flanked by the other three women and Mr. Ikram for an interview on a recent morning. The women were dressed in ankle-length skirts, their hair covered by tudungs, the Malaysian term for headscarf. “We hear of many men having the ‘other woman,’ affairs and prostitution because for men, one woman is not enough. Polygamy is a way to overcome social ills such as this.”
The Ikhwan Polygamy Club is managed by Global Ikhwan, a company whose businesses include bread and noodle factories, a chicken-processing plant, pharmacies, cafes and supermarkets. Mr. Ikram is a director of the company.
While polygamy is legal in predominantly Muslim Malaysia, the club has come under fire from the government and religious leaders, who suspect it may be an attempt to revive Al-Arqam, a defunct Islamic movement headed by Mrs. Hatijah’s husband, Mr. Ashaari Mohamad, who is the founder and owner of Global Ikhwan. Al-Arqam was banned in 1994 for “deviant” religious teachings." (emphasis added)

That explains the criticism, I guess.

Academic job market in a recession year

Inside Higher Ed has an article on the downturn in number of positions advertised through the Modern Language Association, the American Historical Association, and the American Economic Association, compared to last year: No Entry

The situation is exacerbated by last minute hiring freezes, such as the one announced today by the University of Illinois (along with furloughs and other measures).

Spam newspaper

One of the odder features of the internet ad economy is that it is apparently profitable to create internet sites that draw some search traffic, without having any real theme or original content. I'm speculating that CamKh.com is such a site, since it is regularly reposting my blog posts, without however linking to this blog. (In fact, my posts seem to make up a large part of the non-ad content of their Technology section) The site has a vaguely Cambodian theme, but obviously doesn't feel obliged to stick to that.

So, if you happen to be reading this on CamKh.com, the link to my actual blog is here: Market Design.

Update: and (recursively), here is this post, uploaded automatically on the spam newspaper itself.

Recruitment of male high school athletes by ... girls

Inside Higher Ed reports: "A string of scandals involving alcohol, sex and male high school sports stars -- and the National Collegiate Athletic Association's adoption of new rules in 2004 -- seemed to put a stop to college teams’ decades-old practice of organizing groups of female students whose goal was to charm prospects into choosing their university. "

At some schools, recruiting groups are now co-ed. But has this really changed anything?

"At Texas A&M University, membership in the Aggie Hostesses is open to male students, but neither the name nor the fact that the group is all-female makes it particularly appealing to male applicants. Lindsey Bounds, a 2008 graduate of Texas A&M who is the group’s head coordinator, said “men can try out” for the group, but none have, and she has heard no criticism of its gender breakdown. “I don’t feel like anyone really notices it’s an all-female group.” "

Matching and Market Design at the ASSA meetings in Atlanta

I'm not at the meetings in Atlanta, but if I were, I'd try to catch this session this morning:

Matching and Market Design

Presiding: Soohyung Lee (University of Maryland)

Why Deferred Acceptance?: An Experimental Look at Strategy in Two-Sided Matching Markets
Clayton Featherstone (Stanford University)
Eric Mayefsky (Stanford University)

Decentralized Matching with Aligned Preferences
Muriel Niederle (Stanford University)
Leeat Yariv (Caltech)

Inefficiencies in Trade Networks
Matthew Elliott (Stanford University)

Do Roses Speak Louder than Words? Signaling in Internet Dating Markets
Soohyung Lee (University of Maryland)
Muriel Niederle (Stanford University)

Market for class notes, posted by students

There are lots of sites that sell study aids to college students, and there are lots of college courses whose notes are posted online (e.g. see my courses on Market Design and Experimental Economics). The Boston Globe reports on a site, FinalsClub.org, that pays students to post their class notes, after getting permission of the professor. Some of my Harvard colleagues have given their permission, and some have not.

It turns out I'm a Business professor

The same lecture can be described in subtly different ways to different audiences. I see this a lot, because I have a joint appointment between Harvard's Economics Department and the Harvard Business School.

I've been asked to speak at an HBS program for alumni, and I agreed to give a talk that I called Computer-Assisted Markets.

Here's the abstract that came back after I sent in a draft of my slides. It's accurate, and I like it, but I couldn't help noticing that it has a different feel than the abstracts I write myself for economics audiences.

"Designing 21st Century Markets
While efforts to control market behavior are centuries old, computers are enabling new mechanisms of exchange. Drawing on his deep research and expertise in game theory, market design, and computationally assisted markets, HBS Professor Alvin E. Roth will share lessons learned and the implications for markets today and tomorrow. Topics include:
· Exploring the many ways that computers can assist in market exchange—from simple transaction execution to complex algorithms
· Examining the three characteristics of successful markets—ensuring thickness, avoiding congestion, and creating a safe marketplace
· Reviewing successful and not-so-successful examples of market design—from labor market clearinghouses to kidney exchange to school choice mechanisms"

Aside from the title and the description of the speaker, I think the turn of phrase that most surprised me, but that I recognize as a certain style, was the "the" as the second word of the second bulleted item...

The year in market design

Kidney exchange:
In fits and starts, kidney exchange is picking up. The biggest development this year has followed from Mike Rees' pioneering Non-Simultaneous Extended Altruistic Donor Chain.

Here's an end of year news story by Amy Nutt at the NJ Star Ledger which goes over some of the progress made this year, by a growing number of kidney exchange programs: Kidney donation chains provide life-saving chances for patients.

Ms. Nutt has been reporting on New Jersey area kidney exchange for a while; here are some of her previous stories.
Part 1: A gift of hope unfolds
Part 2: A dozen surgeries in 36 hours
Part 3: Donors and recipients meet
Kidney donations connect strangers in 'Chain of Life' forged by transplants

Kidney exchange got going in New Zealand and Australia.

School choice:
Some new theory and evidence from the design of the New York City high school match, and new design efforts in some American and European cities.

Labor markets
The job market for new economists, which is up and running as we speak, gave us a glimpse of some data on how it is working.

Auctions:
My Market Design colleagues have expanded into the rough diamond business.
Noam Nissan (in his review of the decade in algorithmic game theory) writes
"The second half of the decade saw much of the focus shift to “ad auctions” of various kinds, an application that obviously wins the “killer AGT application of the decade” award (rather than the spectrum auctions which seemed the candidate in the beginning of the decade). While the driver of ad auction research is certainly the internet advertising multi-billion dollar industry that has hired droves of AGT researchers, much of this work seems to focus on issues that are of basic theoretical interest in settings of repeated auctions, often departing from the basic models of dominant-strategy worst-case analysis, vying for more delicate models that capture the desired issues better (and in so also influencing the rest of algorithmic mechanism design.)

Electricity
Operating electricity markets made progress around the world.

Airport security and privacy

Recent discussions of airport security in the post underpants-bomber era make it clear that privacy is a complex issue. For example, if an airport screener is going to see a digital image of what you look like under your clothes, is your privacy preserved better if the screener can't also see your face? If the screener is in a remote viewing room?

Debate Over Full-Body Scans vs. Invasion of Privacy Flares Anew After Incident
"The technology exists to reveal objects hidden under clothes at airport checkpoints, and many experts say it would have detected the explosive packet carried aboard the Detroit-bound flight last week. But it has been fought by privacy advocates who say it is too intrusive, leading to a newly intensified debate over the limits of security."
...
"But others say that the technology is no security panacea, and that its use should be carefully controlled because of the risks to privacy, including the potential for its ghostly naked images to show up on the Internet."
...
"“I’m on an airplane every three or four days; I want that plane to be as safe and secure as possible,” Mr. Chaffetz said. However, he added, “I don’t think anybody needs to see my 8-year-old naked in order to secure that airplane.” "
...
"Images produced by the machines in the days before privacy advocates began using phrases like “digital strip search” could be startlingly detailed. Machines used in airports today, however, protect privacy to a greater extent, said Kristin Lee, a spokeswoman for the T.S.A.
Depending on the specific technology used, faces might be obscured or bodies reduced to the equivalent of a chalk outline. Also, the person reviewing the images must be in a separate room and cannot see who is entering the scanner. The machines have been modified to make it impossible to store the images, Ms. Lee said, and the procedure “is always optional to all passengers.” Anyone who refuses to be scanned “will receive an equivalent screening”: a full pat-down."

Dan McFadden salutes Hurwicz and Laffont

Daniel McFadden, The human side of mechanism design: a tribute to Leo Hurwicz and Jean-Jacque Laffont,
Rev. Econ. Design (2009) 13:77–100

(I can't help noticing something about the mechanism of economics publishing: this paper was Received: 26 June 2007 / Accepted: 30 January 2009.)

HT: David Warsh

Scalping free ice skating at Fenway

The mayor is shocked, the Globe reports

Scalpers cloud free skating at Fenway: City protests as rink tickets are hawked at high prices

"Scalpers used to hawking game tickets at exorbitant prices are now doing the same with tickets that were supposed to be free for city residents to ice skate at Fenway Park, in what could be the first trip for many to the hallowed field.
Tickets for the extraordinary skating opportunity at Fenway, handed out to city families as part of Boston’s New Year’s celebrations, were going for as much as $1,800 for four on websites such as Craigslist and eBay, outraging city officials and event organizers who want to know the identities of the people conniving against others for a buck.
“These are free tickets that were arranged to be given to City of Boston residents to skate free at Fenway Park, they weren’t meant for people to make money off of,’’ Dot Joyce, a spokeswoman for Mayor Thomas M. Menino, said yesterday. “It was really the mayor making sure the residents of this city get something back, especially young people who, given this is Fenway, it might be their only chance to be there.’’
The city organized the skating event for two consecutive Sundays, Jan. 3 and Jan. 10. Event organizers were taking advantage of the ice rink set up at the ballpark as part of the 2010 National Hockey League Winter Classic Game on New Year’s Day between the Boston Bruins and the Philadelphia Flyers. More than 38,000 fans are expected to head to that special event, and tickets to the game were going for as much as $700 on websites.
The scalpers’ postings for tickets to skate at Fenway are clear and blunt. One went: “I have 12 tickets total, will sell all for $4,000. 4 tickets for just $1,800. Once in a lifetime opportunity! No sob stories please prices are firm. Hard tickets in hand. I was given these tix by menino directly and I will be there to ensure your entire party gets into the park. . . . VIP tickets include a meet and greet with Bruin Old Timers and free hot chocolate and donuts.’’

The identity of the scalper was not known last night. Reached by e-mail, the scalper responded, “Buy 4 and I will give you an interview.’’ The message came from a Verizon Wireless BlackBerry. When told the Globe would not buy the tickets but still wanted an interview, the scalper responded “No Thanks, Pal.’’ "
...
"Hundreds of residents across the city had tried to get tickets on Saturday, but were turned away because they ran out so quickly. Tim Theriault, 53, of the South End, showed up at the Boston Public Library, only to be told 200 tickets were gone in 15 minutes.
He was disappointed: “Skating in Fenway Park would have been a one-time experience,” he said. But he was more disturbed that someone would take the opportunity to cash in at such exorbitant prices, saying “that’s disgusting.”
“I wish the city could do something, but what can they do,” he said. “That’s just really horrible, really bad.”
Bill Zeoli, a 44-year-old from the South End, waited in line first at the Blackstone School in the South End for close to two hours, then in Chinatown for nearly two hours, and still didn’t get tickets.
But Zeoli, who for years ran a pushcart outside Fenway Park and still goes to Red Sox games regularly, said he recognized some of Fenway’s regular scalpers among the moms and dads waiting in line with their children, and already thought the worst.
“There were absolutely scalpers that I’ve seen for years and years and years,” he said."

A subsequent story indicates that the city will try to enforce the no-scalping policy, but it's not clear if they can do more than check that skaters are Boston residents, since (among other things) some of the tickets could have been given as Christmas gifts: City to check for Fenway scalping: Menino angry, vows to monitor free skate event
"Plans are to spot-check tickets at Fenway. If the registered ticket holder is not present (only one person needed to register for four tickets), then the skaters will be turned away, Menino said.
But some who waited hours in the cold Saturday, such as Jim Cloherty of Hyde Park, had planned to give the four-pack of tickets as a Christmas gift.
“I already gave them to my niece and nephew and brother and sister,’’ said Cloherty, 59. “I got in line for them, because I can’t skate.’’ He explained that he did not plan on going, but would if it means his godchildren would otherwise be turned away.
Menino said ticket checkers will make a judgment call before turning away gift recipients. “We’re not going to be the Gestapo,’’ he said.
But the fact that only about a quarter of the skaters will be registered with the city makes enforcing the Boston-only policy difficult.
“We wouldn’t be able to police for that,’’ Menino’s spokeswoman Dot Joyce said. “That would be an unrealistic expectation. We are not going to be able to enforce everything.’’ "

Hiring in a recession: sorting through 500 applications for an entry level job

The NY Times has a story with some illuminating comments about how a trucking company handled the problem of sorting through 500 applications for an administrative assistant position: $13 an Hour? 500 Sign Up, 1 Wins a Job

"When Stacey Ross, C. R. England’s head of corporate recruiting, arrived at her desk at the company’s Salt Lake City headquarters the next Monday, she found about 300 applications in the company’s e-mail inbox. And the fax machine had spit out an inch-and-a-half thick stack of résumés before running out of paper. By the time she pulled the posting off Careerbuilder.com later in the day, she guessed nearly 500 people had applied for the $13-an-hour job. “It was just shocking,” she said. “I had never seen anything so big.”
Ms. Ross had only a limited amount of time to sort through the résumés. ...The 34-year-old recruiter decided the fairest approach was simply to start at the beginning, reviewing résumés in the order in which they came in. When she found a desirable candidate, she called to ask a few preliminary questions, before forwarding the name along to Chris Kelsey, the school’s director. When he had a big enough pool to evaluate, she would stop. Anyone she did not get to was simply out of luck.
She dropped significantly overqualified candidates right away, reasoning that they would leave when the economy improved. Among them was a former I.B.M. business analyst with 18 years experience; a former director of human resources; and someone with a master’s degree and 12 years at Deloitte & Touche, the accounting firm.
Over the course of four days, Ms. Ross forwarded 61 résumés to Mr. Kelsey, while rejecting 210 others. The remainder never even got a look. Many were, in fact, never uploaded to the company’s internal system because there were too many."

What is the capacity of a school?

A recent NY Times article describes the unusual way in which charter schools are welcomed by the city, and share space in public school buildings: City’s Schools Share Their Space, and Bitterness .

The bitterness in the headline has to do with the fact that it can be difficult to agree on how much space is available in a school, i.e. what is its capacity.

"Officials estimate that over all, the city’s schools are 80 percent full. But figures vary widely school to school, with some bursting while others have as many as a dozen classrooms not being used for teaching. Even determining how many rooms are free is contentious — most schools use open space for activities like dance, tutoring and computers — but Education Department officials often treat those rooms as “underutilized space” to allow another school to come in. "

NSF survey of earned doctorates

The NSF reports on doctoral degrees granted by American universities: National Science Foundation, Division of Science Resources Statistics. 2009. Doctorate Recipients from U.S. Universities: Summary Report 2007–08. Special Report NSF 10-309. Arlington, VA. Available at http://www.nsf.gov/statistics/nsf10309/.

The number of earned doctorates in Economics went from 800 in 1978 (when 27% were to women) to 1091 in 2008 (when 34% were to women).

Give cash next year?

Tim Harford, writing about Joel Waldfogel's famous work on the "deadweight loss" of Christmas gifts, writes "What to do? Waldfogel admits that with some exceptions, such as gifts from older relatives to teenagers, cash is not a suitable gift. Nothing says “I don’t understand you” like a cash gift. Nor is it easy to turn one’s back on the whole ritual."

But the repugnance of cash gifts has given rise to some close substitutes, some of which work better than others. (I admire wedding gift registries as an elegant market design solution to the problem.) Gift cards, not so much.

The NY Times has an illuminating article about the business of gift cards: Redeem All of Gift Card, or Give Store a Present.

"This year, nearly $5 billion of the money that well-meaning givers have put onto gift cards will go unspent, according to TowerGroup, a financial services consulting firm. The money then reverts back mostly to the retailers and banks that loaded the plastic initially.
In the industry, this is known as breakage, and here’s what it means: If you buy a gift card for a family member or friend, there’s a good chance you’ll give a little gift to the retailer or bank that issued it as well.
How does breakage happen? People lose their cards. Or they abandon them in a drawer and assume they’re expired when they’re unearthed years later. Fees can still eat away at some of them. And people may use $46 of a $50 card and then throw it out rather than make another trip back to the store."
...
"It isn’t just a break-even proposition either, according to the people behind Acceptvisamastercards.com. If you count 10 to 12 percent breakage in your calculations, the site contends, the gift card display can become the “most profitable square foot of space in the place.”
This is how some of the people in the industry talk about gift cards when they think consumers aren’t listening. And for big companies, breakage can add up to real money. Not every big retailer or bank discloses it, but Best Buy was kind enough to note that it kept $38 million in breakage in its most recent fiscal year. Home Depot cleared $37 million. Breakage can be total when a retailer goes out of business. "

One good market design idea is the "gift receipt," a receipt that identifies the store at which a gift was bought, but doesn't list the price that was paid. This is meant to make returns easier (e.g. in case you got two electric can openers, or if last year's waist size no longer fits). These are catching on, according to the National Retail Federation, which reports: Stigma of Gift Receipts is Diminishing Among Americans, According to NRF Survey. (Stores' policies on returns are actually an interesting market design issue in themselves, different in the U.S. than in Europe...)

Then there's Dilbert.

Mexico City Legalizes Same-Sex Marriage

Here's the story: Mexico City Legalizes Same-Sex Marriage

"Mexico City lawmakers on Monday made the city the first in Latin America to legalize same-sex marriage, a change that will give homosexual couples more rights, including allowing them to adopt children.
The bill passed the capital's local assembly 39-20 to the cheers of supporters who yelled: "Yes, we could! Yes, we could!" "
...
"The conservative National Action Party of President Felipe Calderon has vowed to challenge the gay marriage law in the courts."
...
"The bill calls for changing the definition of marriage in the city's civil code. Marriage is currently defined as the union of a man and a woman. The new definition will be "the free uniting of two people."
The change would allow same-sex couples to adopt children, apply for bank loans together, inherit wealth and be included in the insurance policies of their spouse, rights they were denied under civil unions allowed in the city. "
...
"Only seven countries allow gay marriages: Canada, Spain, South Africa, Sweden, Norway, the Netherlands and Belgium. U.S. states that permit same-sex marriage are Iowa, Massachusetts, Vermont, Connecticut and New Hampshire.
Argentina's capital became the first Latin American city to legalize same-sex civil unions in 2002 for gay and lesbian couples. Four other Argentine cities later did the same, and as did Mexico City in 2007 and some Mexican and Brazilian states. Uruguay alone has legalized civil unions nationwide.
Buenos Aires lawmakers introduced a bill for legalizing gay marriage in the national Congress in October but it has stalled without a vote, and officials in the South American city have blocked same-sex wedding because of conflicting judicial rulings.
Many people in Mexico and elsewhere in Latin America remain opposed to gay marriage, and the dominant Roman Catholic Church has announced its opposition. "

Doing a good deed for a price; Sally Satel's mailbox on kidney sales

" “For the right price, yes, I would give up one of my organs to save someone’s life,” read the e-mail message, one of three dozen I received last month," writes Sally Satel in her latest NY Times op-ed A ‘Gift of Life’ With Money Attached.

She goes on to say "...if compensated donation were allowed, it would come to resemble surrogate motherhood. In some states, mothers who agree to carry a baby for an infertile couple are legally compensated for their time and for the risk they assume.
And while surrogate mothers surely welcome such payments, they are hardly the only factor in the decision; many say they are motivated by a strong desire to help another woman fulfill her maternal dream. At first, organ compensation, like surrogacy, would seem odd, but then it would become more generally accepted. "

The combination of altruistic motives and financial gain reminds me of the complicated way these issues are viewed. In Repugnance as a Constraint on Markets, I explored the very wide variety of religious opinion on this subject. In this connection I mentioned the view of Pope John Paul II that virtuous organ donations are transformed into immoral commercial transactions by the introduction of monetary payments. (Pope Benedict has reaffirmed this view.*) Other religious traditions view the matter differently. I noted the "... opinion of the eminent Rabbi Shlomo Zalman Auerbach that someone who sells a kidney with the intention of saving a life does a good deed “even if he would not have donated his kidney only to save life.” "

*The Catholic thinker Michael Novak argues that the Popes' views are consistent with some kinds of government compensation for donors, as proposed in draft legislation by Senator Arlen Specter: For Those Who Desperately Need Organ Donations. Novak writes
"Senator Specter's legislative action does two necessary things: (a) it blocks potential abuses by commercialization and international (or even intra-national) trafficking; and (b) it allows individual states to make concrete judgments about non-transferable, non-cash benefits to potential donors, providing these incentives fall within moral guidelines. Senator Specter's legislation establishes that the 1984 federal law prohibiting the commercialization of organs (that is, a sale between individuals or through a broker) does not apply to state governments, when they encourage organ donation through non-transferable incentives. These incentives are not "compensation," and they are not tradable."..."What Specter’s bill does is frame government benefits for donors as what they really are: gifts from the government in appreciation for the generosity of the donor. They are not intended inducements to donate. For John Paul II and Benedict XVI, the invention of appropriate incentives for more frequent donations of organs is a noble endeavor. The U.S. Congress and the several states should take thought about this important task."

(Novak remarks in the article that his views on this subject have evolved since he took part as a discussant in an American Enterprise Institute symposium on my paper on Repugnance, in January 2008. The symposium site has audio and video recordings of the proceedings.)

Uncompensated deceased donation is supported by most religions; here's a summary from the Louisiana Organ Procurement Agency..

Israel revamps its priority system for deceased donor organs

In an effort to increase the number of deceased organ donors, Israel has revamped its allocation system to give priority to those who have themselves signed up to donate, and to their relatives and the relatives of previous donors.

New Law For Organ Donation In Israel: Increased Priority For Those Who Are Prepared To Donate

"An article published Online First and in The Lancet reports that a unique new law comes into effect in Israel in January 2010. It states that people who are prepared to sign donor cards themselves receive priority when they are in need of an organ transplant. In addition, increased priority is given to first degree relatives of those who have signed donor cards, to first degree relatives of those who have died and given organs, and to live donors of a kidney, liver lobe or lung lobe who have donated for as yet undesignated recipients. The article is the work of Professor Jacob Lavee, Director of the Heart Transplantation Unit, Sheba Medical Centre, Ramat Gan, and the Israel Transplant Centre, and colleagues. "
...
"There are different levels of priority concerning the different situations. A transplant candidate with a first-degree relative who has signed a donor card would be given half the allocation priority that is given to a transplant candidate who has signed his or her own donor card. Then again, a transplant candidate with a first-degree relative who donated organs after death or who was an eligible live non-directed organ donor would be given allocation priority 1.5 times greater than that given to candidates who have signed their own donor cards. Among candidates with the same number of allocation points, organs will be allocated first to prioritisation-eligible candidates. Regardless of the new law, patients in urgent need of a heart, lung, or liver transplant due to their serious condition will continue to receive priority. However, in the event that two such people are eligible for the same organ, their priority status under the new law would decide who receives the organ. Candidates under 18 and those unable to express their wishes due to physical or mental disability will retain their priority status versus an adult who merits priority."

This priority system is more nuanced than the one enshrined in Singapore law (see the bottom of this post). And of course legislation on a national scale gives donors a priority for all deceased donor organs, not just those from like-minded donors, which is the path being taken by Lifesharers, an interesting organization about which I posted here.

HT: Steve Leider

Update: here's a YNet followup from March 2010 Radical way to boost organ donation.It discusses, among other things, political obstacles to implementing the new law...

Law and economics of repugnant markets

Kimberly Krawiec at The Faculty Lounge, some time ago followed up on one of my posts with an interesting one of her own: Selecting for Sex: US entrepreneurship in the baby market

She is a professor at Duke Law, and a scholar of repugnant markets, often analysing them with respect to rent seeking behavior. See e.g.

Altruism and Intermediation in the Market for Babies, 66 WASH. & LEE L. REV. 203 (2009).
Abstract: Central to every legal system is the principle that certain items are off-limits to commercial exchange. In theory, babies are one such sacred object. This supposed ban on baby selling has been lamented by those who view commercial markets as the most efficient means of allocating resources, and defended by those who contend that commercial markets in parental rights commodify human beings, compromise individual dignity, or jeopardize fundamental values. However, the supposed and much-discussed baby selling ban does not, and is not intended to, eliminate commercial transactions in children. Instead, it is an asymmetric legal restriction that limits the ability of baby market suppliers to share in the full profits generated by their reproductive labor, insisting instead that they derive a large portion of their compensation from the utility associated with altruistic donation. Meanwhile, a wide range of baby market intermediaries profit handsomely in the baby market, without similar restrictions on their market activities. Baby selling "bans" thus have more in common with the rent-seeking by powerful marketplace actors seen in other commercial markets than with normative statements about the sanctity of human life. The author concludes with a call for the removal of the last vestiges of the "ban" against baby selling and other laws that diminish the capacity of baby market suppliers to access the marketplace.

Price and Pretense in the Baby Market, in BABY MARKETS: MONEY, MORALS, AND THE NEOPOLITICS OF CHOICE (Cambridge University Press, forthcoming 2009).

Show Me the Money: Making Markets in Forbidden Exchange, 72 LAW & CONTEMP. PROBS. (2009).

Sunny Samaritans and Egomaniacs: Price-Fixing in the Gamete Market, 72 LAW & CONTEMP. PROBS._ (2009).
Abstract: This Article considers the market structure of the human egg (or “oocyte”) donation business, particularly the presence of anti-competitive behavior by the fertility industry, including horizontal price-fixing of the type long considered per se illegal in other industries. The Article explores why this attempted collusion has failed to generate the same public and regulatory concern prompted by similar behavior in other industries, arguing that the persistent dialogue of gift-giving and altruistic donation obscures both the highly commercial nature of egg “donation” and the benefits to the fertility industry of controlling the price of a necessary input into many fertility services – namely, eggs. A comparison to the egg market’s closest cousin – the sperm market – does not reveal similar collusive attempts to depress the price of sperm. A further analysis of the industry explores potential reasons for this difference.

The last two articles appear in an edited online journal volume by Professor Krawiec, called Show Me the Money: Making Markets in Forbidden Exchange, which has articles on the sale of blood, organs, eggs and sperm, labor, and surrogate wombs: here's her blog post summarizing them.

Your computer as a marketplace for internet browsers

Microsoft Makes New Concessions to Settle Browser Case
"Microsoft has agreed to reconfigure its Windows operating system in Europe to address two main complaints from rival Internet browser makers, a concession that could lead to the settlement of its latest antitrust case before the European Commission.
A person familiar with the commission’s plans said Microsoft had agreed to change the display of a ballot screen that European Union consumers would use to automatically download an Internet browser for their Windows-based computers.
Microsoft has agreed to randomly generate the logos of the major browser makers on the ballot screen, as well as to remove the Windows Internet Explorer logo from the screen frame, said the person, who was not authorized to speak publicly on the plan.
The changes were requested by Opera, a Norwegian browser maker, Mozilla and Google as preconditions to closing the case before European officials. Rival browser makers had been upset that Microsoft had planned to list the browser choices alphabetically, giving Apple’s Safari browser an advantage."

Indian marriage market for people in the same profession

Amol Agrawal blogs about an Indian Matrimony website for people in development sector.

It's here: devnetmatrimony.org. The site is in English, and at first it wasn't obvious to me it was directed entirely at Indian people (and the list for specifying your nationality seems to include the whole UN except for the U.S.), but the dropdown menu for specifying your mother tongue consists of these 22 choices: Assamese, Bengali, Bodo, Dogri, Guajarati, Hindi, Kannada, Kashmiri, Konkani, Maithili, Malayalam, Manipuri, Marathi, Nepali, Oriya, Punjabi, Sanskrit, Santali, Sindhi, Tamil, Telugu and Urdu.

Agrawal writes "We have many websites catering to the various communities but people also want to marry people in their own fields. Quite a few these days don’t mind marrying outside their communities but want to ensure the person is from the same field."...
"The issue is all the more for girls. They are worried that they may have to give up their profession after marriage if the in-laws family does not understand the work ethics with a profession.
Take the case of development sector. It involves a lot of travel to far remote areas for many a days. One could also be in areas where he cannot communicate about his location and well-being. Just imagine the situation for a married woman in this case."

Cousin marriage

The NY Times writes about marriage between first cousins, which is illegal in exactly half of the 50 States of the U.S.: Shaking Off the Shame.

"But even in the United States — one of the few countries in the world where such unions are illegal — marriage between first cousins may be slowly emerging from the shadows.

Although it is still a long way from being widely accepted, in recent years cousin marriage has been drawing increased attention, as researchers study the potential health risks to children of cousins. And the couples themselves have begun to connect online, largely through a Web site called Cousincouples.com, which bills itself as “the world’s primary resource for romantic relationships among cousins,” and is trying to build support for overturning laws prohibiting cousin marriage.
For the most part, scientists studying the phenomenon worldwide are finding evidence that the risk of birth defects and mortality is less significant than previously thought. A widely disseminated study published in The Journal of Genetic Counseling in 2002 said that the risk of serious genetic defects like spina bifida and cystic fibrosis in the children of first cousins indeed exists but that it is rather small, 1.7 to 2.8 percentage points higher than for children of unrelated parents, who face a 3 to 4 percent risk — or about the equivalent of that in children of women giving birth in their early 40s. The study also said the risk of mortality for children of first cousins was 4.4 percentage points higher."
...
"“It’s never as simple as people make it out to be,” said Dr. Bittles, noting that very early studies did not account for factors like access to prenatal health care, and did not distinguish between couples like Ms. Spring-Winters and her husband, the first cousins in a family to marry, and those who are part of groups in which the practice is common over generations and has led to high rates of genetic disorders. "
...
"Dr. Bittles, who is working on an update of the 2002 study, and other researchers argue that laws against marriage between cousins were rooted in myth and moral objections, and that they amounted to genetic discrimination akin to eugenics or forced sterilization. People with severe disorders like Huntington’s disease, who have a 50 percent chance of passing it on to their offspring, are not barred from marrying because of the risk of genetic defects, he said, so cousins should not be, either.
Historically, marriage between cousins has been seen as desirable in many parts of the world, and even today, slightly more than 10 percent of marriages worldwide are between people who are second cousins or closer, Dr. Bittles said. In the United States, the percentage is thought to be much smaller, although it is difficult to estimate, since such marriages have long been an underground phenomenon, because of laws forbidding them and because of the lingering incest-related stigma. "
...
"Martin Ottenheimer, who wrote “Forbidden Relatives: The American Myth of Cousin Marriage,” a 1996 book that was the first detailed examination of the issue in the United States, compared marriage between cousins to same-sex marriage. “People say, ‘If we permit this, what are we permitting? We’re down the slippery slope toward chaos. Then we’ll permit people to marry dogs,...’ ”
...
"Despite the efforts of some in Minnesota and New Hampshire to overturn state laws against cousin marriage after the 2002 study was published, it remains illegal there. And as of 2005, it is against the law in Texas as well.
The Texas ban was part of a law targeting polygamy, and the state representative who proposed it, Harvey Hilderbran, a Republican, said he would not have introduced a bill simply to prohibit marriage between cousins. Still, he said in an interview: “Cousins don’t get married just like siblings don’t get married. And when it happens you have a bad result. It’s just not the accepted normal thing.” "

Child marriage

Child brides' enduring plight: Problem illustrates hold of tribal doctrines

"Yemen has no minimum age for marriage, and girls as young as 8 are often forced to wed. Many become mothers soon after they reach puberty. The country has one of the highest rates of maternal mortality in the world. The death of a 12-year-old in childbirth this fall highlighted the health risks.
Child brides and young mothers are the most vivid manifestations of how tribal doctrines prevail over modern attitudes in the Middle East's poorest country. "

Saudi official moves to regulate child marriages
"Days after a Saudi judge upheld the marriage of an 8-year-old girl to a man 39 years her senior and blocked a divorce, the kingdom's justice minister said he plans to enact a law that will protect young girls from such marriages, according to local media reports. The law will place restrictions on the practice to preserve the rights of children and prevent abuses, Justice Minister Mohammed Al-Issa told Al-Watan, a daily newspaper in Saudi Arabia, where all newspapers require government permission to publish.Al-Issa said there would be a study of a system that will include regulations for the marriage of minors and everything related to such unions, the newspaper reported. No details on the restrictions or regulations were mentioned.The minister did not say whether child marriage would be abolished."

Child marriage still common in India
"The British raj tried to stamp it out. Mohandas Gandhi, himself a child groom, campaigned against it. The United Nations has condemned it. And in 2006, the Indian government explicitly banned it.
But child marriage remains pervasive in India, accounting for one-third of such unions worldwide and underscoring the contradictions and complexities of a society that produces cutting-edge engineers even as it clings to feudal traditions."


Here are two bills introduced in the House and Senate expressing the repugnance of the US Congress for child marriages in countries that receive U.S. foreign aid, neither of which seems to have made it out of committee. H.R. 2103: International Protecting Girls by Preventing Child Marriage Act of 2009; S. 987: International Protecting Girls by Preventing Child Marriage Act of 2009

Update: 12-year-old Saudi girl in divorce battle with 80-year-old husband

More non-simultaneous kidney chains

A non-simultaneous chain with some interesting features is reported in Washington DC, followed by 3 non-simultaneous chains, starting with 3 non-directed ("altruistic") donors, one involving 10 transplants, one resulting in 3, and one in 1, conducted over six days: 26 Operations, 13 Kidneys: Hope to Few With Little.

"The largest-ever single-city kidney exchange took place this summer in Washington. The seven-way exchange, which involved 14 patients, occurred at Georgetown University Hospital and Washington Hospital Center over four days in July. It was the brainchild of Dr. Keith Melancon, director of Georgetown’s Kidney and Pancreas Transplant Surgery, who used a procedure called plasmapheresis to address not only donor compatibility but racial disparity."

It's nice to see non-simultaneous chains having such good effect. (We'll know that extended chains have really come of age when someone other than Mike Rees conducts one that isn't reported as the largest of some kind ever. But publicity is good for letting patients who might benefit from kidney exchange know about it, and I imagine that's why the 3 chains were reported, with some fanfare, together as one set of 13 transplants.)

The story about the 7 transplant Washington exchange makes some further points in an interview with Dr. Melancon:

"Why does D.C. have the highest per capita rate of kidney failure in the U.S.?
It’s because of racial dynamics. In D.C. proper, over 70 percent of the population is African-American, and there’s also a good number of Hispanic–Americans. Both groups have higher incidents of end-stage renal disease. If you are African-American, you have four to five times the chance of having kidney disease versus a person who is Caucasian. There is a very high rate of hypertension and diabetes in this population, and those are the two main reasons why people have kidney disease in this country.
Why is it so hard to find a donor who is a good match?
The best type of transplant is a donation from a family member or friend while they are still alive. The problem with African-Americans in particular and those from lower socioeconomic groups is that their friends and family members tend to come from the same socioeconomic level, so it’s harder for them to take all the time off work for testing, surgery and recovery. Also, the same problems leading to the patient having the disease—high blood pressure, obesity, high cholesterol– will be higher in concentration in their communities. Then you have the problem of antibodies, which makes the prospect of getting a transplant more difficult because of higher incidence of rejection. With these patients in July, antibodies were so high that a traditional donor match was very difficult.
You’re focused not only on healthy kidneys but on the racial disparities that exist in this area of medicine. Will you elaborate?
Racial disparities contribute to much of the spectrum of disease that we see. Not only is kidney disease higher in certain ethnic groups, but there are differences in ability to access care. People who get transplants early in the course of their disease do much better than those who get transplanted later. You can chart how quickly a person can get to a transplant center, and it’s directly proportional to their socioeconomic status. Unfortunately, you can also see it’s in proportion to whether they are a minority or not....

"What are some of the technologies that enabled you to accomplish this?
One of the things that was most important to this process was a procedure called plasmapheresis. It allows us to remove the antibodies that would attack a new kidney. We put patients through this procedure so the body would accommodate the new organ. It’s very similar to dialyses in that their blood goes through a filter and then goes back to their body; the filter separates the liquid part of blood, which has antibodies in it. We throw that out and give them more liquid that doesn’t have antibodies. This is done over a period of three to four hours. They have to undergo this a few times before and after the transplant.
What was the cost?
A normal kidney transplant will cost $160,000. One done in this way (with plasmapheresis and extra medication)will increase the cost by about $100,000. However it’s still a savings versus the alternative. We already have universal health care for end-stage renal disease, and that’s been the case for the last 30 years. Dialyses costs $85,000 to $90,000 a year, so kidney transplant is always a benefit for the people and for the government."

Kidney transplantation in China

In China Daily: Kidneys illegally sold online

"Two major online forums www.02066.com.cn and www.as.2sun.cn, are operating for organ brokers in dozens of cities across the country, including Beijing, Tianjin, Zhengzhou and Shangqiu in Henan province, Hangzhou in Zhejiang province, Dongguan in Guangdong province, Changchun in Jilin province and Hefei in Anhui province.

...Ministry of Health officials said the trade in human kidneys is illegal, and pointed to the creation of a new database that has been designed to make organs available to the approximately 1 million Chinese waiting for transplants. The database began as a pilot project in some areas, including Shanghai, in September.

...Chen Shi, a professor in medicine at Huazhong University of Science and Technology, said the illegal trade must be banned to protect people's rights. "


Meanwhile, the American Journal of Transplantation has this to say:

"China's Vice Minister of Health, Huang Jiefu, MD, and the English-language newspaper China Daily announced in late August that China has established new national organ donation system to increase consented donors, halt rgan trafficking and quell the long-time dependence on use of organs from executed prisoners.1 A pilot project for the system, which will be operated mainly by the Red Cross Society of China with assistance from the Ministry of Health, will begin in 10 provinces and cities.
Within the China Daily article Dr. Huang says that prisoners, whom experts estimate account for more than 65% of total donors, "are not a proper source for organ transplants," nor should transplantation be a privilege for the rich.
Noting that "the candid observation by the Vice Minister is courageous and commendable," Francis L. Delmonico, MD, director of medical affairs for The Transplantation Society, advisor for human transplantation for the World Health Organization and a Harvard professor of surgery, says the concern of the international community regarding the recovery of organs from executed prisoners is that the need for organs has fueled the need, or demand, for executions. "The expectation that a foreign patient can undergo transplantation in China on a specified date—with blood type compatibility—brings that concern to a reality," he adds. He also says the international community, as represented by the Istanbul Declaration, supports the intention of China to establish a deceased donation system.
Statement From The Transplantation Society
While we can see some 'green shoots' of a new and ethical transplant program focused on meeting the needs of the Chinese community with end-stage organ failure, there is a long way still to go. There is no doubting that the Chinese Government in Beijing is determined to curtail the grisly trade in executed prisoners, so it seems mostly to have gone underground and a new trade in commercial living kidney and liver transplantation appears to be springing up. The Transplantation Society remains in contact with many people throughout China and is committed to helping to encourage these new signs of appropriate use of transplantation therapy, while remaining steadfast in opposition to the sale of organs to rich foreign patients.
—Jeremy Chapman, MD, president, The Transplantation Society"

The most selective colleges are getting more selective

That is the conclusion Caroline Hoxby reaches in "The Changing Selectivity of American Colleges"


Here's the abstract (the paper is gated): "This paper shows that although the top ten percent of colleges are substantially more selective now than they were 5 decades ago, most colleges are not more selective. Moreover, at least 50 percent of colleges are substantially less selective now than they were then. This paper demonstrates that competition for space--the number of students who wish to attend college growing faster than the number of spaces available--does not explain changing selectivity. The explanation is, instead, that the elasticity of a student's preference for a college with respect to its proximity to his home has fallen substantially over time and there has been a corresponding increase in the elasticity of his preference for a college with respect to its resources and peers. In other words, students used to attend a local college regardless of their abilities and its characteristics. Now, their choices are driven far less by distance and far more by a college's resources and student body. It is the consequent re-sorting of students among colleges that has, at once, caused selectivity to rise in a small number of colleges while simultaneously causing it to fall in other colleges. I show that the integration of the market for college education has had profound implications on the peers whom college students experience, the resources invested in their education, the tuition they pay, and the subsidies they enjoy. An important finding is that, even though tuition has been rising rapidly at the most selective schools, the deal students get there has arguably improved greatly. The result is that the "stakes" associated with admission to these colleges are much higher now than in the past. "

Matching and "undermatching" in college admissions

A recent commentary in the Chronicle of Higher Education summarizes a new book on how (in)frequently students finish college in the canonical four years:

Helping Students Finish the 4-Year Run By William G. Bowen, Matthew M. Chingos, and Michael S. McPherson


They make a number of points, two of which focus on matching. They find that many students, particularly from lower socio-economic backgrounds, "undermatch," by going to less selective colleges than they are qualified for. And they think that standardized tests play too large a role in sorting students to colleges.

"5. But money is by no means the entire story, perhaps not even the largest part. Student's choices of where to apply to college are enormously important. A surprisingly large number of students—especially those from poor families and those who are African-American or Hispanic—"undermatch." That is, they go to less demanding four-year institutions than they are qualified to attend, to two-year colleges, or to no college at all. For example, 59 percent of students in the bottom quartile of family income undermatch; 27 percent in the top quartile do so. In addition, 64 percent of students whose parents have no college education undermatch, compared with 41 percent of those whose parents have college degrees and 31 percent whose parents have graduate degrees (see Figure 3). Undermatching has serious consequences because there is a strong association between institutional selectivity and B.A.-completion rates: Students with essentially the same qualifications who attend more-selective universities have a considerably higher probability of graduating than do comparable students who attend less selective universities. Our data also confirm the results of other studies that show that students whose objective is to earn a B.A. are much less likely to do so if they start at a two-year college (again, other things equal).
6. "Sorting" of applicants by universities, especially overreliance on standardized tests, is consequential and problematic. We are not opposed to testing per se. Standardized tests can be helpful when used in the right ways and in the right settings. They are especially helpful when used with high-school grades to predict college grades at the most selective universities. It is clear, however, that high-school grades are far better predictors of graduation rates, especially at less selective universities. This finding holds even when we do not take account of differences in the quality of the high school that a student attended. Results of achievement tests, especially scores on Advanced Placement tests, are also good predictors. Both grades and achievement-test scores measure not only cognitive achievement but also coping and time-management skills—which, we surmise, affect completion rates."

Computer assisted markets: infrastructure

Some time ago the NY Times ran a story on "smart infrastructure:" Bringing Efficiency to the Infrastructure

The story was mostly how better metering and communication can lead to increased efficiencies. Some of these efficiencies come from making new markets possible; e.g. if your electric meter were smarter, it could allow more complicated contracts, in which you could have interruptible service when demand was high (e.g. you could have an electricity contract that would turn off your washing machine when demand was high, but allow you to turn it on again and be billed at a higher rate if you needed it even so.)

The story touches on this when it discusses congestion pricing in Stockholm:
"In 2006, Stockholm experimented with congestion pricing, charging cars up to $4 to enter the downtown area, depending on the time of day. The cars were monitored with RFID cards and webcams that photographed license plate numbers. Drivers had to pay within two weeks or faced penalties, but I.B.M. linked the driver data to 400 convenience stores in the city to make payment easier.
Within a few weeks, the impact in Stockholm was evident, and it has proved permanent. Car traffic in downtown Stockholm has been reduced by 20 percent, carbon dioxide emissions have dropped 12 percent, and the city’s public transport system has added 40,000 daily riders, I.B.M. said. The webcams accurately read license plates, even on snowy days, more than 95 percent of the time. So the RFID tags are no longer in use. After expenses, the smart traffic system generates $80 million a year for the city.
Stockholm is a city in a Scandinavian country with a long environmental tradition, in a socially democratic nation. Yet even in Stockholm, there were complaints initially. The city also took the risk of installing the entire system, calling it a trial, and then having residents vote on it seven months later, after the benefits were apparent. "

Shill bidding in domain name auctions

SnapNames Employee Caught Bidding on Auctions

That's from Elliot's Blog: Domain Name Investing News and Tips. (And you wondered why it was hard to find a domain name...)

HT: Ben Edelman, who notes "Shill bidders sometimes win, and therefore need a plan for how to dispose of the resulting asset. Working at the auction house is helpful."

School assignment in New York City

The December issue of the American Economic Review has our paper on the redesign of the NYC high school assignment system:
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. And here are the AER links at which you can access the Appendix and Download the Data Set

See my previous posts here and here.

Auction design by Paul Klemperer

Paul Klemperer alerts me to two new market design papers. He writes "here is the paper about the Product-Mix Auction, the new auction design for differentiated goods that I developed for the Bank of England from 2007,
forthcoming in the Journal of the European Economic Association. It is similar to Paul Milgrom's recent work on assignment auctions (we discovered this when we talked last year) -- No exciting theorems, but I paid a lot of attention to how to present simply, so bidders are comfortable participataing (and auctioneers are willing to use). I'm working on how to extend to some degree of complements, so maybe better theorems soon. The Product-Mix Auction: a New Auction Design for Differentiated Goods

"And here is a small enhancement of core-selecting package auctions (with Aytek who is taking up a lectureship (i.e. assistant professorship) at Cambridge University next year) -- we are working on the wider question of whether/when they are a good idea -- we currently take no position on that: A New Payment Rule for Core-Selecting Package Auctions by Aytek Erdil and Paul Klemperer

Course allocation at HBS

Some of the gems of the market design literature involve the careful analysis of existing institutions for allocating scarce goods, to understand the good and bad properties of those mechanisms, and the incentives they give to participants.

The latest example analyzes the way second year MBA courses at the Harvard Business School are assigned.

The Multi-unit Assignment Problem: Theory and Evidence from Course Allocation at Harvard by Eric Budish and Estelle Cantillon

Abstract: "This paper uses data consisting of agents. strategically reported preferences and their underlying true preferences to study strategic behavior in the course allocation mechanism used at Harvard Business School. We show that the mechanism is manipulable in theory, manipulated by students in practice, and that these manipulations cause meaningful welfare losses. However, we also find that ex-ante welfare is higher than under the Random Serial Dictatorship (RSD), which is the only known mechanism that is anonymous, strategyproof and ex-post efficient. We trace the poor ex-ante performance of RSD to a phenomenon, "callousness", specific to multi-unit assignment and unrelated to risk attitudes. We draw lessons for the design of multi-unit assignment mechanisms and for market design more broadly."

A related paper is Budish's proposal for an alternative mechanism: The Combinatorial Assignment Problem: Approximate Competitive Equilibrium from Equal Incomes.
(And here's my earlier post on an early version of that paper.)

Law and market design

Law obviously plays an enormous role in market design.
Haifa University's Forum for Law and Markets is hosting a conference today on Behavioral Analysis of Law: Markets, Institutions, and Contracts

Compensation for donors of human eggs for medical research

Fox News carries the following press release: Pro-Life Feminist Group Sues NYS over Compensation for Women's Eggs .

"Feminists Choosing Life of New York (FCLNY) filed suit Friday in New York State Supreme Court (Albany) to block the use of taxpayer funds to pay women recruited to donate their eggs for embryonic stem cell research."...

"New York State is the first governmental entity anywhere in the U.S. to approve taxpayer money to pay women to undergo an invasive procedure to harvest eggs for embryonic stem cell research.The legal complaint was filed on October 9, 2009 in Feminists Choosing Life of New York v. Empire State Stem Cell Board. In part, the complaint states, "The Payment for Eggs Program provides significant monetary inducements to women to engage in this painful and risky procedure, which in part disproportionately appeals to economically vulnerable women...(it)...fails to satisfactorily provide for informed consent and other safeguards to ensure adequate disclosure to women of the risks of egg harvesting."In 2007, the New York State Legislature enacted a new Title V-A to Article 2 of the Public Health Act, committing $600 million for stem cell research. On June 11, 2009, the Empire State Stem Cell Board (ESSCB), which was given the responsibility for administering the funds, passed a resolution authorizing significant taxpayer monies of up to $10,000 per donation to be used to compensate young women who donate their eggs for research. "...

"The National Institutes of Health guidelines for Embryonic Stem Cell Research recommends against payments to egg donors.The National Academies of Sciences agrees: “No cash or in kind payments should be provided for donating oocytes (eggs) for research purposes." "

HT: Egg Donation & Surrogacy Law Blog via Kim Krawiec at The Faculty Lounge, whose post includes a link to her paper on pricing in the gamete market.

The market for blood plasma

Is Money Tainting the Plasma Supply?

"Hundreds, probably thousands, of Mexicans like Ms. Delgado come to the United States to trade their plasma for dollars. Eagle Pass, a town of 27,000 that bills itself as the place “where yee-hah meets olé,” has two such plasma collection centers. There are about 15 others in border cities from Brownsville, Tex., to Yuma, Ariz.
The centers are run by pharmaceutical companies that transform the plasma into life-saving but expensive medicines for diseases like immune deficiencies and hemophilia.
Some border centers are new while others have been around for many years. They account for only a small percentage of the plasma collected by the industry, with the rest coming from collection centers throughout the United States.
But they have stirred debate in recent years because they illustrate the workings of the $12 billion plasma products business, a fast-growing industry that has depended on the blood of people hard up for cash. Based on typical industry yields and prevailing prices, it appears that a single plasma donation, for which a donor might be paid $30, results in pharmaceutical products worth at least $300.

Away from the border as well, many plasma collection centers have historically been located in areas of extreme poverty, some with high drug abuse. That troubles some people, who say it might contaminate the plasma supply or the health of people who sell their plasma.
“Why in the United States do we have to depend on people who are down and out to donate?” says Dr. Roger Kobayashi, an immunologist in Omaha who uses plasma products to treat many patients. “You are taking advantage of economically disadvantaged individuals, and I don’t think you are that worried about their health.” "
...
"But the plasma companies and federal regulators say the practice is legal, ethical and safe. There have been no known cases of an infectious disease being transmitted through plasma products for more than a decade. And since the body quickly renews its plasma, the process is considered safe for donors if properly monitored.
“It’s not like giving up a kidney,” says Dr. Jay Epstein, director of blood research at the Food and Drug Administration, which regulates the collection centers and the plasma products."
...
"The United States is one of the few countries that allows plasma donors to be paid. (And even here the plasma industry says it pays donors for their time, not for the plasma itself.)
But many of the countries that prohibit compensation do not collect enough plasma. So they rely on plasma or plasma products made from the blood of people who donate in the United States, which supplies more than half the world’s plasma.
“The U.S. is the OPEC of plasma,” says Jim MacPherson, chief executive of America’s Blood Centers, a network of blood banks.
FOR the plasma industry, times have been good. Growth has averaged 8 percent a year over the last two decades. "
...
"To satisfy demand for plasma-based medicines, the industry has increased the number of collection centers to 408, from 299 in 2005, according to the Plasma Protein Therapeutics Association, the industry trade group. Paid donations in the United States rose to 18.8 million in 2008 from 10.4 million in 2005. "

"There are even a few signs that in areas hardest hit by the economic downturn, people who once donated blood without compensation to organizations like the Red Cross are selling plasma instead. “I know of five or six people who are multi-gallon donors who have switched to plasma,” said Doug Klynstra, recruitment manager for Michigan Blood, a nonprofit blood bank. He said the bank’s donations are down 10 percent this year. "

"The blood banks generally collect whole blood, which is separated into red cells, platelets and plasma and often used for transfusions. They almost never pay for donations because that might induce donors to cover up health problems that could make the blood unsafe.
The plasma companies, which collect only plasma, say that is less of a concern for them because their manufacturing process can kill many viruses and because they have more time to screen donors. "

Compensating blood donors

Robert Slonim, Mario Macis, and Nicola Lacetera report on the effect of (non-cash) incentives on whole blood donation: Will There Be Blood? Incentives and Substitution Effects in Pro-social Behavior

Abstract: " We examine how economic incentives affect pro-social behavior through the analysis of a unique dataset with information on more than 14,000 American Red Cross blood drives. Our findings are consistent with blood donors responding to incentives in a “standard” way; offering donors economic incentives significantly increases turnout and blood units collected, and more so the greater the incentive’s monetary value. In addition, there is no disproportionate increase in donors who come to a drive but are ineligible to donate when incentives are offered. Further evidence from a small-scale field experiment corroborates these findings and confirms that donors are motivated by the economic value of the items offered. We also find that a substantial fraction of the increase in donations due to incentives may be explained by donors substituting away from neighboring drives toward drives where rewards are offered, and the likelihood of this substitution is higher the higher the monetary value of the incentive offered and if neighboring drives do not offer incentives. Thus, extrinsic incentives motivate pro-social behavior, but unless substitution effects are also considered, the effect of incentives may be overestimated."