Thursday, August 3, 2023

Market design conferences: Marseille, 11 – 15 December, and Santiago 18-20 December, 2023

 Here's the conference announcement from Marseille: 

From matchings to markets. A tale of Mathematics, Economics and Computer Science. Des matchings aux marchés. Une histoire de mathématiques. 11 – 15 December 2023, at the CIRM center in Marseille, France.

"This conference aims at gathering researchers from the fields of mathematics, computer science and economics (broadly defined) sharing common interests in the study of matching problems and the design of their markets. The presentations can cover a wide variety of topics and methods: specific matching markets, general models, theory, empirical analysis. . . etc"

Scientific Committee 
Comité scientifique 

Nick Arnosti (University of Minnesota)
Michal Feldman (Tel Aviv University)
Alfred Galichon (Science Po & New York University)
Michael Jordan (University of Stanford)
Claire Mathieu (CNRS – Collège France)

Organizing Committee
Comité d’organisation

Nick Arnosti (University of Minnesota)
Julien Combe (CREST & École Polytechnique)
Claire Mathieu (CNRS – Paris)
Vianney Perchet (ENSAE & Criteo AI lab)

*******
And here's the announcement of the conference in Santiago:

Keynote Speakers
Omar Besbes
Columbia University
Nicole Immorlica
Microsoft Research New England
Alvin Roth
Stanford University
Participants



Itai Ashlagi
Stanford University

Martin Castillo
New York University

Francisco Castro
University of California

José Correa
Universidad de Chile

Sofía Correa
Universidad de Chile

Andrés Cristi
Universidad de Chile

Juan Escobar
Universidad de Chile

Maximilien Ficht
Universidad de Chile

Yannai Gonczarowski
Harvard University

Nima Haghpanah
Pennsylvania State University

Jason Hartline
Northwestern University

Tibor Heumann
Pontificia Universidad Católica de Chile

Rahmi Ilkilic
Universidad de Chile

Revi Jagadeesan
Stanford University

Max Klimm
Technische Universität Berlin

Tomás Larroucau
Arizona State University

Mariana Laverde
Boston College

Ilan Lobel
New York University

Alfonso Montes
Universidad de Chile

Marcelo Olivares
Universidad de Chile

Renato Paes Leme
Google Research New York

Juan Sebastián Pereyra
Universidad de Montevideo

Adriana Piazza
Universidad de Chile

Dana Pizarro
Universidad de O'Higgins

Marco Scarsini
Universidad Luiss Guido Carli

Vasiliki Skreta
University of Texas at Austin

Laura Vargas-Koch
ETH Zurich

Víctor Verdugo
Universidad de O'Higgins

Matt Weinberg
Princeton University

Gabriel Weintraub
Stanford University

Asaf Zeevi
Columbia University

Wednesday, August 2, 2023

SITE 2023 Session 2: Market Design Thu, Aug 3 2023, 9:00am - Fri, Aug 4 2023, 5:00pm PDT

 SITE 2023  Session 2: Market Design  Thu, Aug 3 2023, 9:00am - Fri, Aug 4 2023, 5:00pm PDT

Landau Economics Building, 579 Jane Stanford Way, Stanford, CA 94305

ORGANIZED BY  Mohammad Akbarpour, Stanford University, Piotr Dworczak, Northwestern University, Ravi Jagadeesan, Stanford University, Shengwu Li, Harvard University, Ellen Muir, Harvard University

This session seeks to bring together researchers in economics, computer science, and operations research working on market design.  We’re aiming for a roughly even split between theory papers and empirical and experimental papers.  In addition to faculty members, we also invite graduate students on the job market to submit their paper for shorter graduate student talks.

Thursday, August 3, 2023 8:30 AM - 9:00 AM PDT Check-in & Breakfast

9:00 AM - 9:45 AM PDT

The Combinatorial Multi-Round Ascending Auction

Presented by: Bernhard Kasberger (Heinrich Heine University Düsseldorf). Co-author(s): Alexander Teytelboym (University of Oxford)

The Combinatorial Multi-Round Auction (CMRA) is a new auction format which has already been used in several recent European spectrum auctions. We characterize equilibria in the CMRA that feature auction-specific forms of truthful bidding, demand expansion, and demand reduction for settings in which bidders have either decreasing or non-decreasing marginal values. In particular, we establish sufficient conditions for riskless collusion. Overall, our results suggest that the CMRA might be an attractive auction design in the presence of highly complementary goods on sale. We discuss to what extent our theory is consistent with outcomes data in Danish spectrum auctions and how our predictions can be tested using bidding data.


AUG 3  9:45 AM - 10:15 AM PDT  Break

AUG 3  10:15 AM - 11:00 AM PDT

Entry and Exit in Treasury Auctions 

Presented by: Milena Wittwer (Boston College)   Co-author(s): Jason Allen (Bank of Canada), Ali Hortaçsu (University of Chicago), and Eric Richert (Princeton University)

Regulated banks—dealers—have traditionally dominated Treasury markets. More recently, less regulated institutions, such as hedge funds, have entered these markets. Understanding this phenomenon and its consequences is challenging because there is limited data on how hedge funds trade. We document steady dealer exit and rising, yet volatile hedge fund participation in the Canadian primary market. To understand hedge fund entry and to trade-off the benefits of greater competition against the costs of higher market volatility, we introduce and estimate a model with multi-unit auctions and endogenous entry. A counterfactual analysis suggests that hedge fund entry was largely driven by dealer exit, and that competition benefits are large compared to volatility costs. This trade-off is likely present in other markets with regular and irregular participants, which can be studied in our framework.

AUG 3  11:00 AM - 11:30 AM PDT Break

AUG 3 11:30 AM - 12:15 PM PDT

Principal Trading Arrangements: Optimality under Temporary and Permanent Price Impact

Presented by: Markus Baldauf (University of British Columbia)

Co-author(s): Christoph Frei (University of Alberta) and Joshua Mollner (Northwestern University)

We study the optimal execution problem in a principal-agent setting. A client (e.g., a pension fund, endowment, or other institution) contracts to purchase a large position from a dealer at a future point in time. In the interim, the dealer acquires the position from the market, choosing how to divide his trading across time. Price impact may have temporary and permanent components. There is hidden action in that the client cannot directly dictate the dealer’s trades. Rather, she chooses a contract with the goal of minimizing her expected payment, given the price process and an understanding of the dealer’s incentives. Many contracts used in practice prescribe a payment equal to some weighted average of the market prices within the execution window. We explicitly characterize the optimal such weights: they are symmetric and generally U-shaped over time. This U-shape is strengthened by permanent price impact and weakened by both temporary price impact and dealer risk aversion. In contrast, the first-best solution (which reduces to a classical optimal execution problem) is invariant to these parameters. Back-of-the-envelope calculations suggest that switching to our optimal contract could save clients billions of dollars per year.

AUG 3  12:15 PM - 1:45 PM PDT Lunch

AUG 3 1:45 PM - 2:05 PM PDT

Principal-Agent Problems with Costly Contractibility: A Foundation for Incomplete Contracts

Presented by: Roberto Corrao (Massachusetts Institute of Technology)

Co-author(s): Joel P. Flynn (Massachusetts Institute of Technology) and Karthik A. Sastry (Harvard University)

We study implementable and optimal mechanisms in principal-agent problems when agents’ actions are partially contractible. Fixing the extent of contractibility, we characterize implementable and optimal contracts. We provide conditions under which optimal mechanisms specify discontinuous payments for agents’ actions that take the form of “fines” or “bonuses.” When the principal can choose the extent of contractibility and additional contractibility has strictly positive marginal cost, we show that any optimal contract features a finite menu. This provides a foundation for the optimal incompleteness of contracts: even under arbitrarily small costs of contracting, optimal contracts specify finitely many contingencies. We apply these results to study optimal regulation of imperfectly contractible pollution, optimal incentive contracts when employees work from home, and the optimal pricing and remuneration of content creation.


AUG 3 2:05 PM - 2:25 PM PDT

The Simple Economics of Optimal Bundling

Presented by: Frank Yang (Stanford University)

We study optimal bundling when consumers differ in one dimension. We introduce a partial order on the set of bundles defined by (i) set inclusion and (ii) sales volumes (if sold alone and priced optimally). We show that if the undominated bundles with respect to this partial order are nested, then nested bundling (tiered pricing) is optimal. We characterize which nested menu is optimal: Selling a given menu of nested bundles is optimal if a smaller bundle in (out of) the menu sells more (less) than a bigger bundle in the menu. We present three applications of these insights: the first two connect optimal bundling and quality design to price elasticities and cost structures; the last one establishes a necessary and sufficient condition for costly screening to be optimal when a principal can use both price and nonprice screening instruments.

AUG 3 2:25 PM - 2:45 PM PDT

Incentive Compatibility in the Auto-bidding World

Presented by: Yeganeh Alimohammadi (Stanford University)

Co-author(s): Aranyak Mehta (Google Research) and Andres Perlroth (Google Research)

Auto-bidding has recently become a popular feature in ad auctions. This feature enables advertisers to simply provide high-level constraints and goals to an automated agent, which optimizes their auction bids on their behalf. These auto-bidding intermediaries interact in a decentralized manner in the underlying auctions, leading to new interesting practical and theoretical questions on auction design, for example, in understanding the bidding equilibrium properties between auto-bidder intermediaries for different auctions. In this paper, we examine the effect of different auctions on the incentives of advertisers to report their constraints to the auto-bidder intermediaries. More precisely, we study whether canonical auctions such as first price auction (FPA) and second price auction (SPA) are auto-bidding incentive compatible (AIC): whether an advertiser can gain by misreporting their constraints to the autobidder.

AUG 3 2:45 PM - 3:05 PM PDT

An Empirical Framework for Waitlists with Endogenous Priority: Evaluating the Heart Transplant Waitlist

Presented by: Kurt Sweat (Stanford University)

Waitlists that prioritize specific agents to achieve certain policy goals are common in practice, but policy makers often use endogenous characteristics of agents to assign waitlist priority. I study the heart transplant waitlist in the United States where the treatment that a patient receives is used to assign waitlist priority. Policy makers recently changed the prioritization in an attempt to reduce waitlist mortality by assigning higher priority to patients receiving specific treatments associated with high waitlist mortality. First, I document a significant response to waitlist incentives as usage of these treatments tripled once they were assigned higher priority, while usage of other treatments declined. Then, I estimate a dynamic discrete choice model of the treatment and transplant decision for patients on the waitlist to evaluate the effect of the change on the distribution of patient outcomes. Counterfactual outcomes estimated from the model demonstrate that the current design results in healthier patients receiving high priority treatments and better long-run outcomes. This is contrary to the policy makers goals of transplanting sicker patients and suggests that patients should be targeted using characteristics other than treatments.


AUG 3  3:05 PM - 3:45 PM PDT  Break

AUG 3 3:45 PM - 4:30 PM PDT

Trading with a Group

Presented by: Elliot Lipnowski (Columbia University)

Co-author(s): Nima Haghpanah (Pennsylvania State University) and Aditya Kuvalekar (University of Essex)

A buyer trades with a group of sellers whose heterogeneous willingness to trade is private information. She must trade with all sellers or none, and is required to offer sellers identical terms of trade. We characterize the optimal mechanism: trade occurs if and only if the buyer's benefit of trade exceeds a weighted average of sellers' virtual values. These weights are endogenous, with sellers who are less ex-ante inclined to trade being given greater influence. This mechanism uses sellers' private information in a continuous way, and always outperforms posted price mechanisms. In an extension, we characterize the entire Pareto frontier.


AUG 3  4:30 PM - 5:00 PM PDT Break

AUG 3 5:00 PM - 5:45 PM PDT Matching with Costly Interviews: The Benefits of Asynchronous Offers

Presented by: Akhil Vohra (University of Georgia)

Co-author(s): Nathan Yoda (University of Georgia)

In many matching markets, matches are formed after costly interviews. We analyze the welfare implications of costly interviewing in a model of worker-firm matching. We use our model to understand the trade-offs between a centralized matching system and a decentralized one, where matches can occur at any time. Centralized matching with a common offer date leads to coordination issues in the interview stage. Each firm must incorporate the externality imposed by the interview decisions of the firms ranked above it when deciding on its interview list. As a result, low-ranked firms often fail to interview some candidates that ex-ante have high match quality. A decentralized setting with exploding offers generates, at a minimum, the same welfare as the centralized setting, though the set of candidates who receive interviews is different. Total welfare is generally maximized with a system that ensures firms interview and match in sequence, clearing the market for the next firm. Such asynchronicity reduces interview congestion. This system can be implemented by encouraging top firms to interview and match early and allowing candidates to renege on offers.

AUG 3 6:30 PM - 8:30 PM PDT  Dinner

Friday, August 4, 2023

8:30 AM - 9:00 AM PDT Check-in and Breakfast

AUG 4  9:00 AM - 9:45 AM PDT

Describing Deferred Acceptance to Participants: Experimental Analysis

Presented by: Ori Heffetz (Cornell University and Hebrew University)

Co-author(s): Yannai Gonczarowski (Harvard University), Guy Ishai (The Hebrew University of Jerusalem), and Clayton Thomas (Princeton University)

Designed markets often relies on carefully crafted descriptions of mechanisms. By and large, these descriptions implicitly attempt to convey as directly as possible how outcomes are calculated. Are there principled, alternative theories of how to construct descriptions to expose different properties of mechanisms? Recently-proposed menu descriptions aim to provide such a theory towards exposing the strategyproofness of real-world mechanisms such as Deferred Acceptance. We design an incentivized experiment to test the ability of a menu description (compared to a traditional description) to affect participant behavior and their understanding of strategyproofness. We also design treatments conveying the property of strategyproofness itself rather than the full details of the mechanism, with one treatment inspired by traditional definitions and one inspired by menu descriptions.


AUG 4  9:45 AM - 10:15 AM PDT Break

AUG 4 10:15 AM - 11:00 AM PDT

An Experimental Evaluation of Deferred Acceptance

Presented by: Jonathan Davis (University of Oregon)

Co-author(s): Kyle Greenberg (West Point) and Damon Jones (University of Chicago)

We present evidence from a randomized trial of the impact of matching workers to jobs using the deferred acceptance (DA) algorithm. Our setting is the U.S. Army’s annual many-to-one marketplace that matches over 14,000 officers to units. Officers and jobs are partitioned into over 100 distinct markets, our unit of randomization. Matching with DA reduced officers’ attrition in their first year in their new match by 16.9 percent, but these gains disappear in the second year. We can rule out a 1.5 pp reduction in attrition within two years. Matching with DA had no impact on performance evaluations or promotions. Although matching with DA increased truthful preference reporting by a statistically significant 10 percent, many officers matched by DA misreport their true preferences. We present new evidence suggesting that communication and coordination of preferences may limit the benefits of strategyproofness in matching markets where each side actively ranks the other.


AUG 4  11:00 AM - 11:30 AM PDT Break

AUG 4 11:30 AM - 12:15 PM PDT

Design on Matroids: Diversity vs Meritocracy

Presented by: M. Bumin Yenmez (Boston College)

Co-author(s): Isa E. Hafalir (University of Technology Sydney), Fuhito Kojima (University of Tokyo), and Koji Yokote (University of Tokyo)

We provide optimal solutions to an institution that has dual goals of diversity and meritocracy when choosing from a set of applications. For example, in college admissions, administrators may want to admit a diverse set in addition to choosing students with the highest qualifications. We provide a class of choice rules that maximize merit subject to attaining a diversity level. Using this class, we find all subsets of applications on the diversity-merit Pareto frontier. In addition, we provide two novel characterizations of matroids.

AUG 4  12:15 PM - 1:45 PM PDT Lunch

AUG 4  1:45 PM - 2:30 PM PDT

Pareto Improvements in the Contest for College Admissions

Presented by: Ron Siegel (Pennsylvania State University)

Co-author(s): Kala Krishma (Pennsylvania State University), Sergey Lychagin (Central European University), Wojciech Olszewski (Northwestern University), and Chloe Tergiman (Pennsylvania State University)

College admissions in many countries are based on a centrally administered test. Applicants invest a great deal of resources to improve their performance on the test, and there is growing concern about the large costs associated with these activities. We consider modifying such tests by introducing performance-disclosure policies that pool intervals of performance rankings, and investigate how such policies can improve students’ welfare in a Pareto sense. Pooling affects the equilibrium allocation of students.

AUG 4 2:30 PM - 3:00 PM PDT  Break

AUG 4 3:00 PM - 3:45 PM PDT

Test-Optional Admissions 

Presented by: Alex Frankel (University of Chicago)

Co-author(s): Wouter Dessein (Columbia University) and Navin Kartik (Columbia University)

The Covid-19 pandemic has accelerated the trend of many colleges moving to test-optional, and in some cases test-blind, admissions policies. A frequent claim is that by not seeing standardized test scores, a college is able to admit a student body that it prefers, such as one with more diversity. But how can observing less information allow a college to improve its decisions? We argue that test-optional policies may be driven by social pressure on colleges’ admission decisions. We propose a model of college admissions in which a college disagrees with society on which students should be admitted. We show how the college can use a test-optional policy to reduce its “disagreement cost” with society, regardless of whether this results in a preferred student pool. We discuss which students either benefit from or are harmed by a test-optional policy. In an application, we study how a ban on using race in admissions may result in more colleges going test optional or test blind.


AUG 4  3:45 PM - 4:15 PM PDT Break

AUG 4  4:15 PM - 5:00 PM PDT

Equal Pay for Similar Work

Presented by: Bobby Pakzad-Hurson (Brown University)

Co-author(s): Diego Gentile Passaro (Brown University) and Fuhito Kojima (University of Tokyo)

Equal pay laws increasingly require that workers doing “similar” work are paid equal wages within a firm. We study such “equal pay for similar work” (EPSW) policies theoretically and empirically. In our model, we show that when EPSW restricts firms by protected class (e.g. no woman can be paid less than any similar man, and vice versa) firms segregate their workforce by gender in equilibrium. This endogenously lowers competition for workers, as it becomes costly for firms to poach from one another–doing so exposes them to the bite of the policy. When there are more men than women, EPSW leads to an increase in the equilibrium gender wage gap. For a sufficiently high ratio of men to women, there exist equilibria with arbitrarily low wages for women, leading to a particularly large wage gap. By contrast, EPSW that is not based on protected class can decrease the equilibrium wage gap. We test our model predictions using a difference-in-difference approach to analyze a gender-based EPSW enacted in Chile in 2009. We find that the EPSW increases the share of employees working at gender-segregated firms by 3% and increases the gender wage gap by 3%.

Tuesday, August 1, 2023

Ted Groves interviewed by Sandeep Baliga (video)

Ted Groves reflects on his career and collaborations, including his famous work with John Ledyard

 


Optimal allocation of public goods: A solution to the" free rider" problem

GrovesJ Ledyard - Econometrica: Journal of the Econometric Society, 1977 - JSTOR

Monday, July 31, 2023

Altruistic kidney donors in Israel

 The Forward has the story

Why Israel has more altruistic kidney donors than any other country in the world By Michele Chabin

"Israel is in the bottom half of countries when it comes to organs harvested after death, the type used in most transplants globally. ...

"But ...for more than a decade the number of Israelis who have donated kidneys while they are still alive and well has increased to the point that Israel is the worldwide leader in live donations per capita.

"That’s in large part thanks to the Jerusalem-based nonprofit ... Matnat Chaim, Hebrew for “gift of life,” which recruits and encourages individuals in good health to donate a kidney for purely altruistic reasons. 

"Of the more than 1,450 live kidney donations Matnat Chaim has facilitated, more than 80% percent were altruistic – donated by individuals who had no connection to the recipient. According to the group’s records, it made at least half of the matches between recipients and live donors in Israel from 2015 to 2022.

"Rabbi Yeshayahu Heber, whose life was saved by kidney from a live donor, founded Matnat Chaim in 2009 with his wife Rachel. Rabbi Heber, who died from COVID-19 in April 2020, had said he was moved to recruit volunteer donors after watching other kidney patients die for lack of transplants. 

"On Israel Independence Day this spring, Rachel Heber was awarded the prestigious Israel Prize in honor of the couple’s lifesaving work. 

...

Broadly speaking, the medical definition says that death occurs when the brain is no longer functioning, even if the heart is still beating. There are exceptions, but most ultra-Orthodox rabbis say death occurs when the heart stops beating and the person stops breathing.

“The problem is, if you wait until the heart stops, you can’t harvest the organs,” said Judy Singer, Matnat Chaim’s assistant director.

"For these reasons, Heber made it his mission to recruit live kidney donors.

"With other groups, including the Halachic Organ Donor Society and the Israel Transplant Authority, Matnat Chaim has convinced many religious Jewish communities to encourage members to donate altruistically. “Today, religious Jews, and haredim especially, are at the forefront of live kidney donations,” Singer said. “They say, I can’t donate an organ after death, but take my kidney and help someone now.”About 90% percent of Matnat Chaim’s kidney donors belong to the Modern Orthodox or ultra-Orthodox streams of Judaism.

“That number used to be 97%, but we’re always looking to increase the number of secular donors and Arab donors,” Singer said.

"The group has arranged for “many” Arab Israelis to receive transplants, she said, but did not share numbers for those recipients. Matnat Chaim is looking to work with an Arab group or individual to increase the number of Arab donors and recipients in the future, she added.

...

"According to the Ministry of Health, 656 transplants were carried out in Israel in 2022. Of those about half — 326 — came from living donors. By comparison in the U.S. that same year, about 15% of all organ donations came from living donors.

"Though transplant rates have been rising in both countries, many are still dying for lack of a donor. In Israel, 77 people died waiting for one in 2022."

 

Sunday, July 30, 2023

Congress acts on deceased organ system

 Last week the House and Senate passed, and forwarded to the president an Act meant to facilitate the reform of the U.S. system for recovering and allocating deceased donor organs for transplant, by contracting with different firms for different tasks, i.e. by breaking up the monopoly presently operated by UNOS.:

H.R.2544 - Securing the U.S. Organ Procurement and Transplantation Network Act118th Congress (2023-2024) | Get alerts

BILL

Sponsor:Rep. Bucshon, Larry [R-IN-8] (Introduced 04/10/2023)
Committees:House - Energy and Commerce
Committee Meetings:05/24/23 10:00AM 05/17/23 10:00AM 04/19/23 10:00AM (All Meetings)
Committee Reports:H. Rept. 118-140
Latest Action:Senate - 07/28/2023 Message on Senate action sent to the House.  (All Actions)
Tracker: Tip

This bill has the status Passed Senate

Here are the steps for Status of Legislation:

  1. Introduced
  2. Passed House
  3. Passed Senate
  4. To President
  5. Became Law

(1) IN GENERAL.—The Organ Procurement and Transplantation Network shall—

**********
Here's a story in the Washington Post:
"Congress approved a thorough revamp of the troubled U.S. organ transplant system Thursday, providing health officials with the authority to break monopoly control of the way kidneys, livers, lungs and other organs are delivered to sick patients.

"For 37 years, one nonprofit organization, the United Network for Organ Sharing, has held the federal contract to run the system, relying on a 1984 law that blocked almost all competition. With a unanimous vote Thursday night, the Senate rewrote the law to let the federal Health Resources and Services Administration break that stranglehold and solicit bids from other for-profit and nonprofit groups.

"The House approved the same measure Tuesday. President Biden is expected to sign it.
...
"Exactly how HRSA plans to redesign organ transplantation is still being worked out. The agency announced its intention to overhaul the system in March and went to Congress for the authority it needed."
***********
HRSA earlier this month held an OPTN Industry Day to start surfacing their (still evolving) plans to put out bids for both a transitional period and then for a next generation deceased-donor organ transplant system.
Here's the relevant HRSA page:

Saturday, July 29, 2023

Drug markets: the replacement of agriculture by chemistry

Labs are replacing fields as the source of addictive drugs. Here are two stories, from National Affairs, and the Financial Times.

The current issue of National Affairs has this essay on drugs, drug use, and overdose deaths:

How to Think about the Drug Crisis by Charles Fain Lehman

"A reported 111,219 Americans died from a drug overdose in 2021. That figure has risen more or less unabated, and at an increasing pace, since the early 1990s. Back in 2011, 43,544 Americans died from a drug overdose — less than half the 2021 figure. Ten years earlier, in 2001, it was 21,705 — less than half as many again. And the problem keeps getting worse: The 2021 figure is nearly 50% higher than it was in 2019.

...

"The National Center for Health Statistics estimates that there were roughly 110,000 overdose deaths in the year ending December 2022 — essentially unchanged from a year earlier.

...

"Historically, illicit drugs — heroin, cocaine, marijuana, etc. — were derived from plants grown in fields or greenhouses. But licit pharmacology has long been able to use simple, widely available precursor chemicals to synthesize the active ingredients in these substances. This sidesteps the complex processes of farming altogether. At some point in the past several decades, drug-trafficking organizations learned to use the same techniques at scale. Using precursors sourced primarily from China, they now synthesize a variety of opioids — the class of drugs that includes heroin.

"The most widely known of these is fentanyl, a synthetic opioid conventionally used in anesthesia that is 50 times stronger than heroin. Some are stronger still — carfentanil, the most potent opioid known thus far, is roughly 100 times stronger than fentanyl. In 2021, synthetic opioids were involved in roughly two out of every three overdose deaths.

...

"Complicating the story further is the increasing purity and declining cost of methamphetamine, another synthetic drug with an exploding death rate. After synthetic opioids, methamphetamine is now the second most common cause of drug overdose death. It's also the only tracked drug where deaths not involving synthetic opioids are increasing. That these two lab-produced substances are replacing "organic" drugs at the same time is not a coincidence.

"Why have these drugs taken over the market? Because they're a much better value proposition for sellers. Synthetic drugs significantly reduce production costs, both because chemistry is less labor- and input-intensive per unit produced than farming and because lab production is much easier to obscure from interdiction efforts that drive up costs. Furthermore, because the potency per dose is higher, drug-smuggling operations can move a smaller amount of fentanyl than heroin for the same profit.

"Of course, the stronger the drug, the higher the risk of overdose. Drug-overdose death rates used to be low in part because for the first century or so of modern American drug use, the potency of illicit drugs was constrained by what traffickers could grow in a field. Synthetic drugs remove this limit."

********

And this from the FT:

How fentanyl changed the game for Mexico’s drug cartels.  by Christine Murray

"In the last decade, fentanyl has become the leading cause of death for young adults in the US. Mexico’s illegal drug trade has also adapted to the shift from plant-based drugs towards synthetics, creating a new, streamlined and highly profitable arm of the illicit business with fewer workers and lower costs — but just as much violence.

"The change has caused friction in two of Washington’s most important relationships, with China and Mexico.

...

"Instead of employing tens of thousands of agricultural labourers, the entire fentanyl industry in Mexico could function with “cooks” estimated to number in the hundreds, who were mostly not qualified chemists, Reuter said. Fentanyl’s growth appears to have hit heroin production in particular, with poppy growing in Mexico still well below its peaks, according to the UN Office for Drugs and Crime."





Friday, July 28, 2023

David M. Kreps Symposium: Homo economicus, Evolving. November 17, 2023

Homo economicus, Evolving

The Stanford Graduate School of Business is hosting the inaugural David M. Kreps Symposium, entitled Homo economicus, Evolving.

Inaugural Symposium

David M. Kreps Symposia comprise a series of symposia on topics of broad interest to the faculty of the Stanford Graduate School of Business. The series was created through the generous support of friends and alumni of Stanford GSB, to honor the career of Prof. Kreps.

Date

November 17, 2023

Location

Stanford Graduate School of Business

In orthodox economic models, the individual agent, Homo economicus, is self-interested and rational, with fixed preferences and perfect foresight. However, economists are increasingly modeling individuals who are generous to others, who have preferences that depend on the context and that change, and who have cognitive limitations. This evolving vision of Homo economicus has profound implications for what we learn from economic analyses. The symposium will discuss this continuing evolution of economists’ representations of people’s motives and cognitive capabilities, and the implications of this evolution for specific contexts and public policy and, more broadly, for the discipline.

Featured Speakers

Research Professor and Director of the Behavioral Sciences Program, Santa Fe Institute
James B. Duke Professor of Economics, Duke University
Professor of Practical Philosophy, University of Helsinki; Director of TINT - Centre for Philosophy of Social Science
Class of 1987 Professor in Behavioral Science and Public Policy; Professor of Psychology and Public Affairs; Inaugural Director, Kahneman-Treisman Center for Behavioral Science & Public Policy, Princeton University

Thursday, July 27, 2023

Kidney brouhaha in Israel: is a good deed still good when performed by a shmuck?

 Recently a three way kidney exchange was performed in Israel. This would have been unremarkable under most circumstances: Israel has an active kidney exchange system.  But it caused a strong reaction in the Israeli press, because one of the donors, a  well-known rightwing activist who wanted to donate a kidney so that his brother could receive one, announced that he wanted his kidney to go only to a Jew.

Here's the Ynet story (you can click to render it in English):

 kidney in a transplant marathon: "The condition was - only for a Jew

Here's the Times of Israel (already in English):

Right-wing journalist causes stir by announcing his kidney would go only to a Jew

There were many more, but you get the idea.  Some of the stories point out that the Israeli National Transplantation Center uses an algorithm* that doesn't see the religion of the recipient, so it's not clear that this was a declaration with consequences.  It was meant to provoke, and it did.

But it's a complicated issue.  In the U.S. (and in Israel), donations can be made to a specific individual, but not to a class of individuals.  With living donation, it means that the donor can choose a specific person to donate to, and it isn't an issue how they choose: no one has to donate an organ to anyone, and every donation saves a life (and maybe more than one, particularly since  living donation reduces competition for scarce deceased-donor kidneys). So if this donor had been able to donate to his brother, no one would have thought twice that he was glad to be donating to a fellow Jew.  What made his announcement provocative was that his kidney wasn't going to his brother: his brother was getting a kidney from an anonymous other donor. [Update clarification/correction: this donation was apparently an undirected (except for the 'only' condition) altruistic donation, not part of an exchange involving the donor's brother.]

Among the people I corresponded with about this is Martha Gershun, a kidney donor who thinks and writes clearly, and has given me permission to quote some of what she said.

"I’m wondering if we find the presentation of the story troubling:  “Right-wing journalist and Temple Mount activist causes stir by announcing his kidney would go only to a Jew.”  We would react badly to a story that said:  “Right-wing Trump supporter says he will only give his kidney to a white man.”

"What if instead the stories were:  “Observant Jewish father of 8 wants to donate to a fellow Jew” and “Rural man from West Virginia seeks to help another in his community”?  Would we find those stories more acceptable?"

Part of the feeling that this is a bit complicated has to do with the fact that we don't (and maybe shouldn't) look gift horses in the mouth, i.e. we don't and maybe shouldn't delve deeply into the motivation of altruistic acts that do a lot of good. We should applaud good deeds even if they aren't performed by saints. (I blogged yesterday, about paying it forward, an umbrella term for doing good deeds in a spirit of gratitude for having ourselves benefited  from past good deeds performed by others. We generally don't find it necessary to condition our approval on precisely who receives the forward-paid gifts.)

So, while I'm not sorry to see that this statement by a kidney donor is a much discussed provocation, I'm inclined to think that a good deed remains a mitzvah even if not performed by a tzadik, as we might have said in our New York English when I was growing up.

I'll give the last word to a Haaretz op-ed, also in English:

 Is It Kosher to Donate Kidneys Only to Other Jews?  A well-known religious journalist in Israel declared the " -only" donation of his kidney. His act is imperfect, but not immoral by Robby Berman

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*On the algorithm used in Israel and elsewhere, see e.g.

Wednesday, January 15, 2020 Kidney Exchange in Israel (supported by Itai Ashlagi)


and


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Update: related subsequent post 


Wednesday, July 26, 2023

Paying it forward

 Scott Cunningham, an economist who devotes a lot of his efforts to providing public goods, recently had a post on the phrase "paying it forward." He writes that he connected it with a movie with a similar name, but has recently come to view it differently (for reasons I find too embarrassing to quote, but related to the fact that I use the phrase now and then.)

Wikipedia says "Pay it forward is an expression for describing the beneficiary of a good deed repaying the kindness to others instead of to the original benefactor."  It goes on to say "Robert Heinlein's 1951 novel Between Planets helped popularize the phrase."  I could have first seen it there, as I read much of Heinlein's science fiction when I was a boy.

My associations with the phrase now mostly come from the motivations and actions of some living kidney donors, particularly in kidney exchange chains.

The phrase is certainly is evocative of what we do so much of in academia (when we're doing academia well): it describes the relationship between studying and teaching, and between teachers and students.

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Scott's post announced that, as part of paying things forward, he's funding a prize for young economists.



Tuesday, July 25, 2023

Incentives in matching markets: Counting and comparing manipulating agents by Bonkoungou and Nesterov

 Here's a paper that caught my eye in the current issue of Theoretical Economics, Volume 18, Issue 3 (July 2023)

Incentives in matching markets: Counting and comparing manipulating agents by Somouaoga Bonkoungou and Alexander Nesterov

Abstract: Manipulability is a threat to the successful design of centralized matching markets. However, in many applications some manipulation is inevitable and the designer wants to compare manipulable mechanisms to select the best among them.  We count the number of agents with an incentive to manipulate and rank mechanisms by their level of manipulability. This ranking sheds a new light on practical design decisions such as the design of the entry-level medical labor market in the United States, and school admissions systems in New York, Chicago, Denver, and many cities in Ghana and the United Kingdom.

"First, we consider the college admissions problem where both students and schools are strategic agents (Gale and Shapley (1962)) and schools can misreport their preferences as well as their capacities. We show that when all manipulations (by students as well as by schools) are considered, the student-proposing Gale–Shapley (GS) mechanism has the smallest number of manipulating agents among all stable matching mechanisms (Theorem 1). Dubins and Freedman (1981) and Roth (1982) show that this mechanism is not manipulable by students. This result was one of the main arguments in favor of its choice for the NRMP. However, it also has the largest number of manipulating schools among all stable mechanisms (Pathak and Sönmez (2013)). Our result still supports its choice when all strategic agents are considered. What is more, it is still the best choice even when schools can only misreport their capacities, but not their preferences. All these conclusions carry over to the general model where, in addition, students face ranking constraints: although the student-proposing GS mechanism is now manipulable by students, it is still the least manipulable mechanism.

"Second, we consider the school choice problem (Abdulkadiroglu and Sönmez ˘ (2003)) where students are the only strategic agents and also face ranking constraints. Historically, many school choice systems have used the constrained immediate acceptance (Boston) mechanism, but over time shifted toward the constrained student proposing GS mechanisms and relaxing the constraint. We demonstrate that the number of manipulating students (Theorem 2) weakly decreased as a result of these changes."


Monday, July 24, 2023

Algorithms, Approximation, and Learning in Market and Mechanism Design" November 6-9, 2023 in Berkeley (register for funding)

 Here's the announcement

Register for SLMath (MSRI) Workshop: "Algorithms, Approximation, and Learning in Market and Mechanism Design"  November 6-9, 2023 in Berkeley, California, Simons Laufer Mathematical Sciences Institute (SLMath)

Priority Funding Application Deadline: August 31, 2023

Speakers:

Monday, November 6, 2023: Matching Markets without Money

  • Jiehua Chen (Technische Universität Wien)
  • Federico Echenique (University of California, Berkeley)
  • David Manlove (University of Glasgow)
  • Alvin E. Roth (Stanford University)
  • Jaychandran Sethuraman (Columbia University)

Tuesday, November 7, 2023: Non-Convex Auction Markets

  • Elizabeth Baldwin (Merton College, University of Oxford)
  • Paul Milgrom (Stanford University)
  • Shmuel Oren (University of California, Berkeley)
  • Rakesh Vohra (University of Pennsylvania)
  • Yinyu Ye (Stanford University)

(Attendee reception follows Tuesday's events)

Wednesday, November 8, 2023: Algorithmic Mechanism Design

  • Dirk Bergemann (Yale University)
  • Michal Feldman (Tel-Aviv University)
  • Jason Hartline (Northwestern University)
  • Roger Myerson (University of Illinois, Chicago)
  • Sigal Oren (Ben Gurion University of the Negev)

Thursday, November 9, 2023: Learning in Games and Markets

  • Michael Jordan (University of California)
  • David Parkes (Harvard University)
  • Lillian Ratliff (University of California, Berkeley)
  • Tuomas Sandholm (Carnegie Mellon University)
  • Eva Tardos (Cornell University)

Sunday, July 23, 2023

Organ trafficking, and how to reduce it -- Frederike Ambagtsheer in Conversation

Frederike Ambagtsheer, who studies illegal markets for organs and transplants,  has some sensible thoughts on how to combat organ trafficking, not least by increasing the availability of legal, ethical transplantation conducted in high quality hospitals.

Here she is in The Conversation:

Illegal organ trade is more sophisticated than one might think - who’s behind it and how it could be controlled  by Frederike Ambagtsheer

"The organ trade involves a variety of practices which range from excessive exploitation (trafficking) to voluntary, mutually agreed benefits (trade).

"These varieties warrant different, data-driven responses.

"For example, organ sellers are reluctant to report abuses because organ sales are criminalised and sellers will be held liable. Although many can be considered human trafficking victims and be offered protection, this rarely occurs. Law- and policymakers should therefore consider decriminalising organ sales (removing penalties in the law) and offer organ sellers protection, regardless of whether they agree to provide evidence that helps to dismantle criminal networks.

"Countries should also allow medical professionals to safely and anonymously report dubious transplant activity. This information can support the police and judiciary to investigate, disrupt and prosecute those who facilitate illegal organ transplants. Portugal and the UK already have successful organ trafficking reporting mechanisms in place.

"Finally, a contested example of a possible solution to reduce organ scarcity and avoid black market abuses is to allow payments or other types of rewards for deceased and living organ donation to increase organ donation rates. To test the efficacy and morality of these schemes, strictly controlled experiments would be needed.

...

" In short, rather than exclusively focusing on stricter laws, a broader range of responses is needed that both address the root causes of the problem and that help to disrupt organ trading networks."

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Here are all my posts that mention Dr. Ambagtsheer's work, which I've followed for more than a decade.

Saturday, July 22, 2023

Modify NOTA: a new effort

 Ned Brooks, who has been a force in promoting living kidney donation, is turning his efforts towards a new organization, dedicated to modifying the National Organ Transplant Act (NOTA) of 1984, to allow some compensation of kidney donors.

Here's the organization's website:  Join the Coalition to Modify NOTA

The website starts off with a quote with which I'm in full agreement:

“It’s long past time to modify the 1984 National Organ Transplant Act.”   - Al Roth

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Recent related post:

Monday, July 10, 2023

Friday, July 21, 2023

The Cost of Inaction and the Urgent Need to Reform the U.S. Transplant System: participant statements

 Yesterday's Senate Finance committee hearings on The Cost of Inaction and the Urgent Need to Reform the U.S. Transplant System are on video, and the following witness statements (delivered beforehand) are now also available.

If you only have time to read one, I'd recommend clicking on the testimony of Matthew Wadsworth, the President And CEO of the OPO, Life Connection of Ohio.

Witnesses 


  1. LaQuayia Goldring
    Patient
    Louisville , KY
  2. Molly J. McCarthy
    Vice Chair & Region 6 Patient Affairs Committee Representative
    Organ Procurement and Transplantation Network (OPTN)
    Redmond , WA
  3. Matthew Wadsworth
    President And CEO
    Life Connection of Ohio
    Kettering , OH
  4. Raymond J. Lynch, MD, MS, FACS
    Professor Of Surgery And Director Of Transplantation Quality And Outcomes
    Penn State Health Milton S. Hershey Medical Center
    Hershey , PA
  5. Donna R. Cryer, JD
    Founder And CEO
    Global Liver Institute
    Washington , DC
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