Further unraveling of law firm offers to (first year) law students, and offers to new (first week) bankers from private equity

Eric Budish writes with a pointer to a Business Insider story on the current unraveling of the market for new lawyers and big law firms.

Inside the 'Wild West' of law-school recruiting that has Big Law reeling in talent earlier and more aggressively than ever

"this year, some legal-industry professionals say the competition has gotten out of control.

"Latham & Watkins, which hires about 300 students a year for its 10-week summer program, has told law schools that it has made 2023 summer-job offers to so many students ahead of the traditional period for on-campus interviews, or OCI, that it expects to conduct fewer OCI interviews this year, three people familiar with the firm's strategy said.

"Other elite firms — including Weil, Skadden, and Davis Polk — have also been making large numbers of early offers. At Simpson Thacher, a partner said, "We probably did half our interviewing before the formal OCI process."

"Working at a law firm after a student's second year, or 2L, has long been a rite of passage for students bound for Big Law. "Summer associates" are paid about $4,000 a week at top firms and get the chance to do legal research, eat nice meals on the company's dime, and meet the people they'll likely be working with after graduation — because upwards of 90% of them get an offer to return full time.

...

"Some law students are now entering recruiting talks in the spring of their 1L year. School administrators say it's often the students who get the ball rolling by submitting résumés via a firm's website after meeting a partner at a school meet and greet.

...

"Stanford and the University of Pennsylvania still ban pre-OCI recruiting, their websites said. Other schools require pre-OCI offers to stay open until OCI, so a student can compare firms. But not all firms respect the rules, and students sometimes are afraid to invoke them, said David Diamond, an assistant dean at Northwestern University's Pritzker School of Law.

"We've seen situations where a student receives an offer, and the offer deadline follows our policy, but the offer is accompanied by a diversity scholarship, and the diversity scholarship expires before or during" OCI, Diamond said.

...

"Some people trace the boom in early recruiting to a 2019 decision by the NALP to scrap rules that limited firms from courting first-semester law students. The rules were replaced by nonbinding guidelines."

**********

And even more frenzied are the job offers that new bankers (in their first week(s) on the job) are getting from private equity firms:

Wall Street just kicked off an annual Hunger Games-style recruiting ritual for junior talent that has young bankers interviewing till 2 a.m. for jobs that don’t start until 2024. https://advance.lexis.com/api/document?collection=news&id=urn:contentItem:668V-4FD1-DXY7-W4MT-00000-00&context=1516831 

"As Insider reported on Tuesday, the frenzied process appears to have kicked off on Monday evening when recruiters for a handful of firms sent out blast emails to select junior bankers suggesting meetings ASAP — before the window of opportunity closes.

"The emails forced these young bankers — many of whom have just started their first Wall Street jobs at places like Goldman Sachs and Citi — to figure out ways to quietly leave their desks to interview for jobs that won't start until the fall of 2024. 

...

"In recent years, the PE recruiting process has moved earlier and earlier, from October to September, but never to late August, as it has done now. It's forcing firms to figure out how to interview candidates with no real job experience. "

The market for prison beds and prisoners

 Kim Krawiec points me to this article about prison space for rent, from the Brennan Center at NYU:

A Market for Holding Humans: The Correctional and Detention Bed Trade, by Lauren-Brooke Eisen and Ram Subramanian

"For decades, sher­iffs, correc­tions agen­cies, and for-profit firms have sought to alle­vi­ate prison and jail over­crowding by offer­ing avail­able beds to other juris­dic­tions in need of space. And the need is great. Despite the over­all decline in impris­on­ment rates since 2009, many places still have too many people to safely house. The same goes for deten­tions by U.S. Immig­ra­tion and Customs Enforce­ment.

"This market can be a much-needed source of revenue for local­it­ies. In Louisi­ana, for example, ICE pays $74 per day — nearly three times what the state prison system reim­burses local sher­iffs. Midland County, Michigan, where the local budget depends on jail bed rent­als, charges $45 per bed per day to other counties and $35 to the state.

...

"At one point, a website called Jail­Bed­Space.com covered 48 states, serving more than 150 agen­cies. The company matched jail admin­is­trat­ors with empty beds in facil­it­ies in other counties or states. Other so-called “bed brokers” have popped up over the years, all receiv­ing fees for each bed they rent out.

...

"The detained people bear the cost as they are shuttled across juris­dic­tional lines, hundreds or even thou­sands of miles from their famil­ies, friends, and communit­ies. Addi­tional miles and state lines present finan­cial and prac­tical barri­ers to retain­ing these import­ant ties. One man incar­cer­ated in Vermont who was moved in the middle of the night to Kentucky without warn­ing said, “This prac­tice of trans­fer­ring inmates out-of-state is horrendous. You’re taking people who, whatever support network they may have, is gone. . . . you’re alone. You’re isol­ated.”

Elizabeth "Betsy" E. Bailey (1939-2022)

 Betsey Bailey, an economist of many parts, has passed away.

I knew of her both as an academic dean at CMU and as a proponent of airline deregulation, in theory and practice.  The theory had to do with the idea that even markets with big players who had lots of market share might be perfectly competitive (and hence not need lots of regulation) if they were "contestable," i.e. if new entrants could enter the market at low cost if they saw profitable opportunities.  The idea was that the airline market would keep prices low to ward off new entrants, or entry by competitors into profitable routes.  Her stint on the Civil Aviation Board led to much reduced regulation of commercial airlines, after which airlines adopted the 'hub and spoke' patterns we see today. (When they were regulated, airline routes looked more like railroads, e.g. some had northern routes, some southern...)

Here's the Washington Post obituary:

Elizabeth Bailey, pathbreaker for women in economics, dies at 83. She was the first woman to receive a PhD in economics from Princeton and helped deregulate airlines as the first woman on the Civil Aeronautics Board  By Emily Langer

"Dr. Bailey, 83, who died Aug. 19 at her home in Reston, Va., was widely credited with opening opportunities for women in her field.

"In 1972, she became the first woman to receive a PhD in economics from Princeton University. Five years later, President Jimmy Carter appointed her the first female member of the Civil Aeronautics Board, where she helped provide the intellectual framework for the deregulation of the airline industry.

...

"Later, at Carnegie Mellon University in Pittsburgh, Dr. Bailey became the first woman to serve as dean of a Top 10 graduate business school."

*******

See 

Morrison, Steven A., Clifford Winston, Elizabeth E. Bailey, and Alfred E. Kahn. "Enhancing the performance of the deregulated air transportation system." Brookings Papers on Economic Activity. Microeconomics 1989 (1989): 61-123.

Bailey, Elizabeth E., David R. Graham, and Daniel P. Kaplan. Deregulating the airlines. Vol. 10. MIT press, 1985.

Bailey, Elizabeth E., and William J. Baumol. "Deregulation and the theory of contestable markets." Yale J. on Reg. 1 (1983): 111.

Singapore to repeal law against sex between men.

 The Guardian has the story:

Singapore to repeal law that criminalises sex between men. Scrapping of colonial-era section 377A law hailed as ‘a win for humanity’ by LGBTQ+ rights groups  by Rebecca Ratcliffe

"Singapore will repeal a colonial-era law that criminalises sex between men, a landmark decision described by LGBTQ+ groups as “a win for humanity”.

"In a national address on Sunday, the prime minister, Lee Hsien Loong, said that scrapping section 377A of the penal code would bring the law into line with current social attitudes and “provide some relief to gay Singaporeans”.

"However, Lee added that the government did not want “wholesale changes in our society”, including changes to the legal definition of marriage.

“Even as we repeal 377A, we will uphold and safeguard the institution of marriage. Under the law, only marriages between one man and one woman are recognised in Singapore,” he said.

"Section 377A, which was introduced under British colonial rule, criminalises “any act of gross indecency with another male person”. The law carries a sentence of up to two years in prison, though it is not believed to have been enforced for more than a decade."

Kidney news from Cambridge on possibility of removing blood type barriers

 Here's some very preliminary kidney news (a press release) in The Guardian and at Cambridge, that could have the potential to have an impact sooner rather than later in helping potential transplant recipients with blood type O, who can only receive blood type O kidneys (which can be received by patients of any blood type)...  

Researchers change blood type of kidney in transplant breakthrough University of Cambridge team’s work could significantly increase supply of organs for people with rarer blood types

"University of Cambridge researchers used a normothermic perfusion machine – a device that connects with a human kidney to pass oxygenated blood through the organ to better preserve it for future use – to flush blood infused with an enzyme through the deceased donor’s kidney.

"The enzyme removed the blood type markers that line the blood vessels of the kidney, which led to the organ being converted to type O."

*******

https://www.cam.ac.uk/stories/kidneybloodtype

The scientists mentioned are Professor Michael  Nicholson and PhD student Serena MacMillan .

ANTHONY PETER "TONY" MONACO M.D. 1932 - 2022--performed first kidney exchange in the U.S.

The eminent transplant surgeon Dr. Tony Monaco has passed away.  Here's the Boston Globe obit:

ANTHONY PETER "TONY" MONACO M.D. 1932 - 2022

I wrote about Dr. Monaco  in connection with the first U.S. kidney exchange surgery, which he conducted with Dr. Paul Morrissey in 2000.

Tuesday, April 6, 2010

The first kidney exchange in the U.S., and other accounts of early progress

The Student BMJ (a student run affiliate of the British Medical Journal) has an article interviewing the pioneering surgeons who conducted the first kidney exchange in the U.S., in 2000. (It's gated, but you can register for free.)

Anthony P Monaco and Paul E Morrissey: a pioneering paired kidney exchange
Transplant surgeons Anthony P Monaco and Paul E Morrissey performed the first paired kidney exchange in the United States
By: Prizzi Zarsadias
Published: 24 March 2010, Cite this as: Student BMJ 2010;18:c1562

Matching in Dynamic Imbalanced Markets, by Ashlagi, Nikzad, and Strack

 Greedy is good in thick kidney exchange pools.

Matching in Dynamic Imbalanced Markets,  by Itai Ashlagi, Afshin Nikzad, Philipp Strack Aug 2022 (Early Access) | REVIEW OF ECONOMIC STUDIES  (ungated on arxiv, here.)

Abstract: We study dynamic matching in exchange markets with easy- and hard-to-match agents. A greedy policy, which attempts to match agents upon arrival, ignores the positive externality that waiting agents provide by facilitating future matchings. We prove that the trade-off between a “thicker” market and faster matching vanishes in large markets; the greedy policy leads to shorter waiting times and more agents matched than any other policy. We empirically confirm these findings in data from the National Kidney Registry. Greedy matching achieves as many transplants as commonly used policies (1.8% more than monthly batching) and shorter waiting times (16 days faster than monthly batching).

Patient preferences for taking an offered kidney versus waiting for a better one

 Here's a paper whose title announces in its first two words that it's unusual for the transplant literature: "Patient Preferences."   It sensibly asks about preferences for a transplant now versus a long future wait.  That's relevant, because the waiting list for a kidney is often years long.

Patient Preferences for Waiting Time and Kidney Quality, by Sanjay Mehrotra, Juan Marcos Gonzalez, Karolina Schantz, Jui-Chen Yang, John J. Friedewald and Richard Knight, CJASN Aug 2022, CJN.01480222; DOI: 10.2215/CJN.01480222

Visual Abstract

Abstract

"Background and objectives Approximately 20% of deceased donor kidneys are discarded each year in the United States. Some of these kidneys could benefit patients who are waitlisted. Understanding patient preferences regarding accepting marginal-quality kidneys could help more of the currently discarded kidneys be transplanted.

Design, setting, participants, & measurements This study uses a discrete choice experiment that presents a deceased donor kidney to patients who are waiting for, or have received, a kidney transplant. The choices involve trade-offs between accepting a kidney today or a future kidney. The options were designed experimentally to quantify the relative importance of kidney quality (expected graft survival and level of kidney function) and waiting time. Choices were analyzed using a random-parameters logit model and latent-class analysis.

Results In total, 605 participants completed the discrete choice experiment. Respondents made trade-offs between kidney quality and waiting time. The average respondent would accept a kidney today, with 6.5 years of expected graft survival (95% confidence interval, 5.9 to 7.0), to avoid waiting 2 additional years for a kidney, with 11 years of expected graft survival. Three patient-preference classes were identified. Class 1 was averse to additional waiting time, but still responsive to improvements in kidney quality. Class 2 was less willing to accept increases in waiting time for improvements in kidney quality. Class 3 was willing to accept increases in waiting time even for small improvements in kidney quality. Relative to class 1, respondents in class 3 were likely to be age ≤61 years and to be waitlisted before starting dialysis, and respondents in class 2 were more likely to be older, Black, not have a college degree, and have lower Karnofsky performance status.

Conclusions Participants preferred accepting a lower-quality kidney in return for shorter waiting time, particularly those who were older and had lower functional status."

HT: Martha Gershun

Morals and repugnance in markets, in Amsterdam, September 5.

 Theo Offerman writes:

"September 5, 2022, will be the inaugural workshop of the Amsterdam Center for Behavioral Change at CREED at the University of Amsterdam.

The workshop will focus on the theme of morals and repugnance in markets.

The speakers are: Sandro Ambuehl, Jana Friedrichsen, Klaus M. Schmidt, Florian H. Schneider, Nora Szech, Peter Werner and Andreas Ziegler. A detailed program is available on our website.

In the recent decades, the field of Behavioral Economics has generated important insights of the drivers of human behavior in economic decision making. The Amsterdam Center for Behavioral Change (ACBC) seeks to enhance our understanding of how these insights can be used to improve human behavior and economic outcomes. Founded in 2020, the ACBC encourages studies that aim to understand the effectiveness of behavioral interventions for societally relevant problems.

Please register here, participation is free.

Theo Offerman

(On behalf of the organizing committee: Theo Offerman, Giorgia Romagnoli, Andreas Ziegler)"

List of speakers:

Sandro Ambuehl, "Paternalism and in-kind poverty assistance"

Jana Friedrichsen, "Fairness in Markets and Market Experiments"

Klaus M. Schmidt, "How to regulate carbon emissions with climate-conscious consumers"

Florian H. Schneider: "Signaling Ideology through Consumption"

Nora Szech: "Competing Image Concerns"

Peter Werner: "Social norms, sanctions, and conditional entry in markets with externalities: Evidence from an artefactual field experiment"

Andreas Ziegler, "Morals in multi-unit markets"

Update: We will live stream the event:

https://uva-live.zoom.us/j/88159405808

Opt out organ donation in England and the Netherlands

 

Jansen, N. E., Williment, C., Haase-Kromwijk, B. J. J. M., & Gardiner, D. (2022). Changing to an Opt Out System for Organ Donation—Reflections From England and Netherlands. Transplant International, 133.

Abstract: Recently England and Netherlands have changed their consent system from Opt In to Opt Out. The reflections shared in this paper give insight and may be helpful for other nation considering likewise. Strong support in England for the change in legislation led to Opt Out being introduced without requiring a vote in parliament in 2019. In Netherlands the bill passed by the smallest possible majority in 2018. Both countries implemented a public campaign to raise awareness. In England registration on the Donor Register is voluntary. Registration was required in Netherlands for all residents 18 years and older. For those not already on the register, letters were sent by the Dutch Government to ask individuals to register. If people did not respond they would be legally registered as having “no objection.” After implementation of Opt Out in England 42.3% is registered Opt In, 3.6% Opt Out, and 54.1% has no registration. In contrast in Netherlands the whole population is registered with 45% Opt In, 31% Opt Out and 24% “No Objection.” It is too soon to draw conclusions about the impact on the consent rate and number of resulting organ donors. However, the first signs are positive."

...

"There had been many failed attempts to introduce Opt Out legislation to England over the last 30 years but was achieved on 20th May 2020. In October 2017 the Prime Minister stated her intention to shift “the balance of presumption in favour of organ donation” and “introduce an opt out system for donation.”

"Fortuitously a parliamentarian from the opposition party had successfully had his name drawn from a legislation ballot (a system which allows a few “Private Members Bills” to be considered by parliament from a randomly chosen subset of legislation suggestions), for a new Opt Out Bill. This led to an unusual alignment of opposing political parties, working together on a new policy. Due to this cross party support, the Bill progressed through Parliament and never had to be put to a vote.

"England’s Opt Out legislation built on the positive experience in Wales and Parliament was further reassured by the response to a public consultation on the draft Bill, which asked how Opt Out should be introduced. The Government usually expects between 200 and 500 responses; over 17,000 responses were received. The responses were supportive and gave a strong steer for the issues needing to be addressed.

"The main issues raised by the public were: the need for autonomy and individual choice; the role of the family; the need to respect faith and beliefs through the donation process. The government worked closely with NHSBT to identify ways to ensure that these issues were addressed. Ministerial commitments also secured additional resources such as increased recurrent funding.

"The final inspiration came from two young people—Max Johnson and Keira Ball. When the Bill was introduced, Max Johnson, a 9 year old boy, was in desperate need of a heart transplant. The UK media—particularly the Mirror newspaper—campaigned for the introduction of Opt Out legislation. Max’s life was saved through the gift of donation by Keira Ball, also aged nine, who tragically lost her life in a road traffic collision. The Opt Out legislation is known as Max and Keira’s Law, in their honour.

"Netherlands

"On the 1st of July 2020 the Opt Out system for organ donation was implemented in Netherlands. Changing the organ donation law from an Opt In consent system into an Opt Out system had not been easy. It took more than 12 years of political discussion to reach the milestone of a majority.

"In 2012 a member of the House of Representatives prepared a Bill to change the consent system into an “Active Donor Registration.” On the 16th of September 2016 the Bill was passed by the smallest possible majority in the House of Representatives, 75 members voted in favour of the Bill and 74 members against. On the 16th of February 2018 the vote in the Senate again ended in a close call, 38 senators voted in favour of the Bill and 36 members against. The Bill could only pass after a required amendment to develop a “Quality Standard Donation,” which describes the role of the doctor and the family in the donation conversation, based on the different outcomes of the Donor Register.

"The Active Donor Registration means that Dutch residents without a registration in the Donor Register, 7 million, will be asked by letter to register their donation preferences (same options as in the Opt In system). If they do not respond to a first and second letter, they will receive a third and final letter with the confirmation that they will be registered as having “No Objection” to organ and tissue donation. Under the new legislation “No Objection” would legally be considered the same as a registration of “Yes, I want to be an organ donor.” Registrations can be changed 24 h a day via the Internet. It could therefore be argued that while the change in law was to introduce Opt Out, it has similarities to a model of mandated choice for organ and tissue donation (6).

Learning and competition in the lab, in France, and in India

 Three NBER working papers this week particularly caught my eye: a lab experiment, a natural experiment, and a field experiment.

The first is a reminder of why simple reinforcement learning models have as much predictive power as they do. It's an experiment that shows that even when others' experience is made clearly visible, there's a tendency to rely on 'own experience'.

Not Learning from Others by John J. Conlon, Malavika Mani, Gautam Rao, Matthew W. Ridley & Frank Schilbach  WORKING PAPER 30378 DOI 10.3386/w30378 August 2022

Abstract: We provide evidence of a powerful barrier to social learning: people are much less sensitive to information others discover compared to equally-relevant information they discover themselves. In a series of incentivized lab experiments, we ask participants to guess the color composition of balls in an urn after drawing balls with replacement. Participants' guesses are substantially less sensitive to draws made by another player compared to draws made themselves. This result holds when others' signals must be learned through discussion, when they are perfectly communicated by the experimenter, and even when participants see their teammate drawing balls from the urn with their own eyes. We find a crucial role for taking some action to generate one's `own' information, and rule out distrust, confusion, errors in probabilistic thinking, up-front inattention and imperfect recall as channels.

******

The second is a careful study of affirmative action for women in French chess tournaments: a requirement that teams include a woman had many effects, including improvement in the quality of play by French women.

Trickle-Down Effects of Affirmative Action: A Case Study in France by José De Sousa & Muriel Niederle, WORKING PAPER 30367 DOI 10.3386/w30367 August 2022

Abstract: "The introduction of a quota in the French chess Club Championship in 1990, an activity many players engage in next to playing in individual tournaments, provides a quite unique environment to study its effects on three levels. We find that women selected by the quota improve their performance. We show large spillover and trickle-down effects: There are more and better qualified women. International comparisons confirm that the results are unique to France and that there are no substantial adverse effects on French male players. We discuss the properties of this quota and how to implement it in other environments."

The concluding paragraph:

"We speculate that one reason for the success of the French chess quota was due to the fact that it was an “output” rather than a “pure representation” quota. At least one ninth of the performance of teams in the Club Championship was determined by the performance of female players. Such an “output” based quota provides organization with different incentives than a pure representation quota does. We use economic departments to discuss the different gender quotas and how each of them might be implemented. We hope that future work will provide theoretical properties of various quotas as well as find other areas where output quotas are already, or could be, implemented."

*********

The third is about the difficulty of inducing competition in close quarters.

Does the Invisible Hand Efficiently Guide Entry and Exit? Evidence from a Vegetable Market Experiment in India by Abhijit Banerjee, Greg Fischer, Dean Karlan, Matt Lowe & Benjamin N. Roth, WORKING PAPER 30360 DOI 10.3386/w30360, August 2022

Abstract: "What accounts for the ubiquity of small vendors operating side-by-side in the urban centers of developing countries? Why don’t competitive forces drive some vendors out of the market? We ran an experiment in Kolkata vegetable markets in which we induced (via subsidizing) some vendors to sell additional produce. The vendors earned higher profits, even when excluding the value of the subsidy. Nevertheless, after the subsidies ended vendors largely stopped selling the additional produce. Our results are consistent with collusion and inertial business practices suppressing competition and efficient market exit."

Living Kidney Donor Transplantation and Global Kidney Exchange by Marino, Roth and Rees

 Here's a just-published article explaining global kidney exchange,  in Experimental and Clinical Transplantation (ECT), the journal of the Middle East Society for Organ Transplantation (MESOT):

Ignazio R. Marino, Alvin E. Roth, and Michael A. Rees, “Living Kidney Donor Transplantation and Global Kidney Exchange,” Experimental and Clinical Transplantation (2022), Suppl. 4, 5-9.

Update: here's a direct link to the paper.

Abstract: "Global kidney exchange offers an opportunity to expand living donor kidney transplants internationally to patients with immunologic barriers. The concept has been proven to be successful in a limited number of transplants. However, a number of misconceptions have created obstacles to its development. We suggest that a systematic application of this innovative tool would offer opportunities to treat thousands of patients worldwide who are presently denied a transplant and often even access to dialysis."

...

"The following 3 examples serve to demonstrate the financial challenges associated with GKE.

"The first GKE transplant involved an immunologically compatible husband and wife from the Philippines who were denied funding for a transplant in the Philippines by the government payer (PhilHealth). The husband-wife pair had no financial resources for travel, kidney transplant, or postoperative medications given their personal situation and the absence of a Philippine government payer for these costs (PhilHealth did not approve payment for this couple to receive a kidney transplant and also did not provide adequate payments for dialysis). The solution was a philanthropic solution whereby the APKD provided funding for travel and the transplant procedure and created an escrow account to pay for an estimated 10 years of recipient and donor follow-up care upon return to the Philippines.

"The second GKE transplant involved an immunologically incompatible donor and recipient who were cousins. They had government funding for a transplant in Mexico through the Mexican Institute of Social Security (known as IMSS by its Spanish acronym) but had not found a match from the Mexican deceased donor system in 5 years, and there was no viable kidney exchange program in Mexico.17 This pair raised sufficient financial resources to pay for travel to the United States and raised one-third of the cost of an uncomplicated kidney transplant in the United States. The IMSS agreed to provide postoperative medications and donor-recipient long-term followup care upon return to Mexico. The solution was a combination of government-financed postoperative care and private/philanthropic funding whereby the APKD partially subsidized the transplant procedures and fully managed financial aspects of potential complication costs.

"Two GKE transplants involved an immunologically incompatible pair of friends from Denmark and an immunologically incompatible mother-daughter pair from Mexico who were able to privately pay for travel, transplant, and postoperative care but were not able to manage the financial risk of a significant complication. The solution involved private/philanthropic funding whereby the patient paid for an uncomplicated kidney transplant in the United States, with APKD philanthropically fully managing the financial aspects of potential complication costs.

...

"The Philippines and Mexico do not offer kidney exchange to their citizens, so these patients had no choice but to look for an international option. In Mexico, it is possible that a living donor kidney could have been shipped from the United States to Mexico, but the patient’s transplant team in Mexico did not want to participate in the exchange. US regulations prevent a living donor kidney from being procured in Mexico, Denmark, or the Philippines and shipped to the United States. Thus, in each of these examples, the only option was for international pairs to travel to the United States and pay for transplant costs at US-based prices. Denmark offers kidney exchange through Scandiatransplant, but the program has less than 50 pairs participating, so matching for hard-to match patients is limited. For the Danish patient, who had panel reactive antibody levels greater than 90%, the only reasonable option was to look for a bigger kidney exchange pool outside of Scandiatransplant, such as the APKD pool in the United States.

...

"In conclusion, GKE provides personalized solutions by capturing relevant genetic, immunologic, physiologic, and social information to match patients with kidney failure and their willing donors to identify opportunities for living donor kidney transplant instead of dialysis or death.

"With GKE, a modality that can equally benefit rich and poor, industrialized world health care is made available to impoverished patients in less industrialized countries, while at the same time fighting unethical transplant tourism. In fact, with GKE, the exchange of a kidney for transplant is an altruistic gift and never an unethical and illegal commercial exchange. Moreover, with such a controlled system, every single donor and every single recipient of the GKE program can be scrutinized before the transplant procedure is performed and their data can be entered in a registry that can be accessed by transplant professionals to ensure ethical treatment of living donors and improved transition of care across national borders.

"Because one of the main motivations of GKE is to make transplantation more available in low- and middle-income countries, it would be helpful if the WHO revisited the ethics of GKE, ideally with an open discussion involving representatives of all WHO countries interested in this procedure."

Gary Becker's last paper: appropriately, on a monetary market for kidneys (with Julio Elias and Karen Ye, JEBO, 2022)

 Gary Becker, who passed away in 2014, has a new paper, finished by his coauthors Julio Elias and Karen Ye. It recounts how the shortage of transplantable kidneys has only increased as the demand has grown, and the argument for paying donors is as strong as ever.  (In the meantime, the obstacles to that approach haven't vanished.)

The shortage of kidneys for transplant: Altruism, exchanges, opt in vs. opt out, and the market for kidneys*  by Gary S.Becker, Julio Jorge Elias, and Karen J.Ye, Journal of Economic Behavior & Organization, Volume 202, October 2022, Pages 211-226 (Another link to the paper is here, temporarily.)

Abstract: "In 2007 we published a paper on organ transplants that used data from 1990–2005. We proposed a radical solution of paying individuals to donate kidneys, and claimed that this would clean out the waiting list for kidney transplants in a short period of time. In this paper, we revisit the topic, and examine 14 years of additional data to see if anything fundamental has changed. We show that the main altruistic based policies implemented, such as kidney exchanges or opt out systems for organ procurement, have been unable to solve the problem of shortages. Our analysis suggests that, because of the reaction of direct living donors to increases in other sources of donations, the supply curve of kidney transplants is highly inelastic to altruistic policies. In contrast, a market in organs would eliminate organ shortages and thereby eliminate thousands of needless deaths."

Here's the most relevant part of the first footnote:

*"We started working on this paper together with Gary Becker in 2011. In 2012, we presented the paper at the Law and Economics Workshop and the MacLean Center's Seminar Series of the University of Chicago. The paper was unfinished when Becker passed away in May 2014. In this version of the paper, we updated the data and made some additions. The paper preserves all the economic analysis that was developed in the last version that we collaborated with Becker.

"Becker wrote his first article about the organ shortage in 1997, as part of his monthly BusinessWeek Column. The article was entitled How Uncle Sam Could Ease the Organ Shortage. In the article, he “suggest(s) considering the purchase of organs only because other modifications to the present system so far have been grossly inadequate to end the shortage.”

"In the 2000s, Julio Elias collaborated with Becker in a paper that uses the economic approach to analyze the consequences of legalizing the purchase and sale of kidneys for transplants from both deceased and living donors. In 2014, Becker published with Julio Elias a column in the Saturday Essay section of the Wall Street Journal entitled Cash for Kidneys: The Case for a Market for Organs. For Becker, the problem of the organ shortage and finding ways to solve it was a lifelong project. This paper reflects some of his last thoughts on this problem."

Here are their conclusions:

"The current state of the market of kidney transplants is a disaster. Over the last years, the waiting list has grown in over 4000 individuals each year, while transplants have grown by only about 250 per year. The result has been longer and longer queues to receive organs. 4000 patients died each year while waiting 3 and a half years on average for a transplant. According to our estimations, the annual social cost of those who die while waiting for kidney transplants is over $7 billion.

"Neither kidney exchange programs nor opt out systems nor educational campaigns to increase donations from altruistic donors have solved the problem of shortages. The main reason for their mild effects, as we show in this paper, is that the altruistic supply curve of kidney transplants is highly inelastic to these type of policies because of the reaction of direct living donors to increases in other sources of donations.

"The only feasible way to eliminate the large queues in the market for kidney transplants is by significantly increasing the supply of kidneys. The introduction of monetary incentives could increase the supply of organs sufficiently to eliminate the large queues and thereby eliminate thousands of needless deaths, and it would do so without increasing the total cost of kidney transplant surgery by a large percent.

"A market for the purchase and selling of organs would appear strange at first. However, much as the voluntary military today has universal support, the selling of organs would come to be accepted over time. " advantages of accepting payment for organs would eventually become clear, and people will wonder why it took so long for such an ovious and sensible remedy to the organ shortage to be implemented.

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Some related earlier posts:

Another take on compensating donors:

Tuesday, August 16, 2022

Kim Krawiec interviews Frank McCormick on the kidney shortage (and how to end it)

Commentary on the  legal monetary market for kidneys in Iran (and how it differs from illegal black markets):

Monday, June 27, 2022

A Forum on Kidneys for Sale in Iran, in Transplant International

The Pontifical Academy of Science says that compensating donors is a crime against humanity:

Friday, February 17, 2017

Vatican statement on organ transplantation

All my posts on compensation for donors (not just kidney donors) are here.

And here's my 2007 paper on repugnance (that came out in the same issue of JEP as the Becker and Elias paper), and was a first attempt at understanding some of the obstacles that face proposals to compensate donors of kidneys (and other things):

• Roth, Alvin E. "Repugnance as a Constraint on Markets", Journal of Economic Perspectives, 21:3, Summer, 2007, pp. 37-58.

I'm slowly writing a book that will expand on it.

Matching versus menus

When preferences are simple, marketplaces can match you quickly, e.g. Uber knows travelers want a nearby car that will come quickly, so it gives drivers some choices but matches travelers without asking them much. But Airbnb knows that travelers might have complex preferences, so it gives them a menu of choices to look at.

Here's a forthcoming paper by Peng Shi on what's going on.

Shi, Peng. "Optimal Matchmaking Strategy in Two-sided Marketplaces." Management Science (2022).

Abstract: Online platforms that match customers with suitable service providers utilize a wide variety of matchmaking strategies; some create a searchable directory of one side of the market (i.e., Airbnb, Google Local Finder), some allow both sides of the market to search and initiate contact (i.e., Care.com, Upwork), and others implement centralized matching (i.e., Amazon Home Services, TaskRabbit). This paper compares these strategies in terms of their efficiency of matchmaking as proxied by the amount of communication needed to facilitate a good market outcome. The paper finds that the relative performance of these matchmaking strategies is driven by whether the preferences of agents on each side of the market are easy to describe. Here, “easy to describe” means that the preferences can be inferred with sufficient accuracy based on responses to standardized questionnaires. For markets with suitable characteristics, each of these matchmaking strategies can provide near-optimal performance guarantees according to an analysis based on information theory. The analysis provides prescriptive insights for online platforms.

Returning to your place in the queue following a failed kidney transplant

 Here's a forthcoming paper that proposes that rejections of marginal kidneys could be reduced if recipients were guaranteed a shorter waiting time for a subsequent transplant if a marginal kidney that they accepted failed.

Tunç, Sait, Burhaneddin Sandıkçı, and Bekir Tanrıöver. "A Simple Incentive Mechanism to Alleviate the Burden of Organ Wastage in Transplantation." Management Science (2022).

Abstract: Despite efforts to increase the supply of donated organs for transplantation, organ shortages persist. We study the problem of organ wastage in a queueing-theoretic framework. We establish that self-interested individuals set their utilization levels more conservatively in equilibrium than the socially efficient level. To reduce the resulting gap, we offer an incentive mechanism that recompenses candidates returning to the waitlist for retransplantation, who have accepted a predefined set of organs, for giving up their position in the waitlist and show that it increases the equilibrium utilization of organs whilealso improving social welfare. Furthermore, the degree of improvement increases monotonically with the level of this nonmonetary compensation provided by the mechanism. In practice, this mechanism can be implemented by preserving some fraction of the waiting time previously accumulated by returning candidates. A detailed numerical study for the U.S. renal transplant system suggests that such an incentive helps significantly reduce the kidney discard rate (baseline: 17.4%). Depending on the strength of the population’s response to the mechanism, the discard rate can be as low as 6.2% (strong response), 12.4%(moderate response), or 15.1% (weak response), which translates to 1,630, 724, or 338 more  transplants per year, respectively. Although the average quality of transplanted kidneys deteriorates slightly, the resulting graft survival one-year post transplant remains stable around 94.8% versus 95.0% for the baseline. We find that the optimal Kidney Donor Profile Index score cutoff, defining the set of incentivized kidneys, is around 85%, which coincides with the generally accepted definition of marginal kidneys in the medical community."

Canadian Blood Services in talks around paid donations of plasma

Canadian Blood Services in talks around paid donations of plasma as supply dwindles. by Christopher Reynolds

"Canadian Blood Services is in talks with companies that pay donors for plasma as it faces a decrease in collections.

"The blood-collection agency issued a statement on Friday saying it is in “ongoing discussion with governments and the commercial plasma industry” on how to more than double domestic plasma collection to 50 per cent of supply.

"Canadian Blood Services has previously cautioned that letting companies trade cash for plasma - a practice banned in British Columbia, Ontario and Quebec - could funnel donors away from voluntary giving.

"The bulk of the non-profit agency's supply currently comes from abroad, including via organizations that pay donors."

HT: Frank McCormack

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The Globe and Mail adds some detail:

Canadian Blood Services eyes getting plasma from paid donors amid supply challenges by Chris Hannay

"Industry observers say the most likely commercial partner for CBS is Grifols, an international pharmaceutical company headquartered in Spain. The company purchased a large-scale plasma processing facility in Montreal in 2020, and in January bought an existing for-profit plasma donation centre in Winnipeg.”

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See my full set of posts on plasma in Canada

Facebook data, abortion prosecution, and search warrents

 The Guardian has the story:

Facebook gave police their private data. Now, this duo face abortion charges  Experts say it underscores the importance of encryption and minimizing the amount of user data tech companies can store. Johana Bhuiyan

"In the wake of the supreme court’s upheaval of Roe v Wade, tech workers and privacy advocates expressed concerns about how the user data tech companies stored could be used against people seeking abortions.  

...

"when local Nebraska police came knocking in June – before Roe v Wade was officially overturned – Facebook handed the user data of a mother and daughter facing criminal charges for allegedly carrying out an illegal abortion. Private messages between the two discussing how to obtain abortion pills were given to police by Facebook, according to the Lincoln Journal Star. The 17-year-old, reports say, was more than 20 weeks pregnant. In Nebraska, abortions are banned after 20 weeks of pregnancy. The teenager is now being tried as an adult."

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And the Washington Post focuses on search warrents:

Search warrants for abortion data leave tech companies few options. Facebook’s role in a Nebraska case underscores the risks of communicating on unencrypted apps. By Naomi Nix and Elizabeth Dwoskin 

"Prosecutors and local law enforcement have strict rules they must follow to obtain individuals’ private communications or location data to bolster a legal cases. Once a judge grants a request for users’ data, tech companies can do little to avoid complying with the demands.

...

“If the order is valid and targets an individual, the tech companies will have relatively few options when it comes to challenging it,” said Corynne McSherry, legal director at the privacy advocacy group Electronic Frontier Foundation. “That’s why it’s very important for companies to be careful about what they are collecting because if you don’t build it, they won’t come.”

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And then there's this to watch out for, also from the Guardian:

How private is your period-tracking app? Not very, study reveals. Research on more than 20 apps found that the majority collected large amounts of personal data and shared it with third parties.  by Kari Paul

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The Washington Post offers some advice on keeping your data private (it's not so easy...)

Seeking an abortion? Here’s how to avoid leaving a digital trail. Everything you should do to keep your information safe, from incognito browsing to turning off location tracking.  By Heather Kelly, Tatum Hunter and Danielle Abril 

The importance of couples matching for medical residents (it's missed where it's missing)

 One of the successes of the design of the NRMP Match for medical residents is that it accommodates couples, using the Roth-Peranson algorithm*.  Here's an article reflecting on the fact that the Ophthalmology and Urology matches are done outside of the NRMP, and don't have a couples match.

Massenzio, Samantha S., Tara A. Uhler, Erik M. Massenzio, Emily Sun, Divya Srikumaran, Marisa M. Clifton, Laura K. Green, Grace Sun, Jiangxia Wang, and Fasika A. Woreta. "Navigating the Ophthalmology & Urology Match with a Significant Other." Journal of Surgical Education (2022).

"• There is an increasing number of couples applying for residency

• Ophthalmology and urology applicants cannot utilize the NRMP Couples Match system

• A Couples Match is highly desired by applicants to these two specialties

• The lack of a Couples Match is a deterrent to these specialties for some applicants

• Systems to aid applicants to these specialties with significant others are needed"

...

"The Couples Match is currently not offered to applicants to ophthalmology or urology as these specialties utilize separate match systems outside of NRMP - the San Francisco (SF) Match1 and Urology Residency Matching Program,2 respectively. Historically, the NRMP implemented the match starting in 1952 for internship programs (postgraduate year 1) only. Individual specialties later established their own systems for matching to advanced training beyond internship; for ophthalmology this occurred in 1979, and urology in 1985. While other specialties have since merged their match processes with the NRMP, ophthalmology and urology continue to facilitate their own match.3, 4, 5

"Ophthalmology and urology also have an “early match,” with match results released in January or February versus in mid-March for applicants using the NRMP. This was historically advantageous because of the preliminary internship year required for both ophthalmology and urology, allowing applicants to rank their preference for internship year in the NRMP based on the outcome of their specialty match. However, as of 2021 and 2019, ophthalmology6 and urology7 respectively transitioned to an integrated or joint internship model, meaning that an internship position is secured at the same time as the specialty match. Given these changes, it is currently timely to evaluate applicant viewpoints on the Couples Match.

...

"Survey Findings

"107 respondents reported having a significant other in medicine (72 ophthalmology, 35 urology), making up 31% of all respondents. 68 (64%) significant others applied in the same cycle as the survey respondent, 11 (10%) applied before, and 28 (26%) will apply after. If the Couples Match had been available, 78% of respondents with a significant other who applied in the same cycle reported that they would have participated.

...

"The lack of a Couples Match is a deterrent to ophthalmology and urology for over one-fifth of applicants with a significant other. Of applicants’ partners who considered ophthalmology or urology, over one-third reported to have been deterred. These findings suggest that for many students who want to be in the same location as their partner in medicine, ophthalmology and urology are specialty choices that may be less desirable toward this end. It is unclear how this impacts efforts to foster more diversity (in terms of gender, race, and other factors) in these specialties.

"The inability for ophthalmology and urology applicants to use the Couples Match adds significant stress to an already difficult application season with survey respondents commenting on the negative mental health effects. In addition, there is currently no official avenue for ophthalmology and urology applicants to communicate a desire to match in proximity to a significant other. Although applicants found methods to overcome this barrier, such as by mentioning their significant other during interviews, a majority indicated that there were times that they were hesitant to discuss their significant other out of concern that it would negatively affect their chances of matching, with female applicants disproportionately affected.

"Regarding the early match, most applicants liked receiving match designations sooner; however, there are mixed responses as to whether or not this timeline is helpful for individuals with a significant other in medicine. The authors are aware that a benefit of the early match for ophthalmology/urology applicants is that a significant other applying through the regular NRMP match has the opportunity to selectively contact programs in the vicinity of the applicant's matched program to express heightened interest. Disadvantages to the early match include that once the ophthalmology/urology applicant matches, their significant other has a limited number of programs in the vicinity to choose from - this is in contrast to a Couples Match where any pair of programs in any location may be ranked. This may also be exacerbated by recent efforts to limit the number of applications submitted or interviews accepted by each student.16, 17, 18 Further, the early match does not help individuals whose significant other is also applying to ophthalmology or urology as they would not be able to take advantage of the difference in timeline between partners. It is presently very challenging for a couple who both want to apply in the same year to ophthalmology or urology to be able to coordinate their match outcome to the same location."

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*Roth, A. E. and Elliott Peranson, "The Redesign of the Matching Market for American Physicians: Some Engineering Aspects of Economic Design," American Economic Review, 89, 4, September, 1999, 748-780