Vic Fuchs considers healthcare organization going forward, in JAMA

Vic Fuchs has a lot of insight into American healthcare. Here are his proposals for after the pandemic (or perhaps for a new administration in Washington). It is worth reading it all (I'm just excerpting some lines...)

Health Care Policy After the COVID-19 Pandemic
Victor R. Fuchs, JAMA.  June 12, 2020. doi:10.1001/jama.2020.10777

"This is a time to think more boldly about the future of the US health care system. The health care system is dysfunctional for many individuals in the US; it is too costly, too unequal, and too uncertain in its eligibility and coverage, with an increasing number of uninsured. ... In exploring the challenges and difficulties ahead, it is useful to distinguish between those that are primarily technical issues (although these are not exempt from politics) and those that are political obstacles to significant reform

...[Technical issues:]

"how to raise the nearly $4 trillion each year to pay for US health care; and how to organize and deliver the care and compensate those who provide it. The experience of other high-income countries indicates that the most efficient and equitable method to finance universal coverage is through a flat tax on consumption, such as a value-added tax, collected from businesses but passed on to consumers via higher prices.1 An alternative is a retail sales tax, which is more cumbersome and costly to collect than a value-added tax, but makes the connection between the tax and health insurance more apparent to the public.

"Those who object to a flat tax (the same rate for everyone) because they think it is not progressive are mistaken. High-income individuals pay more because they consume more, but everyone gets similar health insurance regardless of income. The combination of the tax and the insurance is quite progressive. If it were not, left of center governments in the Organization for Economic Cooperation and Development would not eagerly embrace a value-added tax. In contrast, employment-based insurance sets essentially the same price for any given policy regardless of income. High-income individuals only pay more if they choose a more expensive policy, but that does not help pay for care for low-income or unemployed individuals.

...[Political issues:]

"Distrust of the government is difficult to dispel, but it is possible to do so as President Roosevelt proved with his New Deal reforms in the 1930s. Even though it has seemed that major reform of health care would only occur in the wake of a major war, a depression, or large-scale civil unrest that changed the political balance, it now appears that the COVID-19 pandemic may provide the dynamic for major political change.8 If that occurs, major health care reform will be more attainable."

Paul Milgrom corrects the record on spectrum auctions and market design

Paul Milgrom responds in detail to some scurrilous online criticisms and innuendos about market designers in general and spectrum auctions in particular.

 The Market Design Community and the Broadcast Incentive Auction: 
Fact-Checking Glen Weyl’s and Stefano Feltri’s False Claims
By Paul Milgrom*  June 3, 2020 (and republished on Digitopoly on June 14)

"In a recent Twitter rant and a pair of subsequent articles in Promarket, Glen Weyl [1] and Stefano
Feltri [2] invent a conspiratorial narrative according to which the academic market design community is secretive and corrupt, my own actions benefitted my former business associates and the hedge funds they advised in the 2017 broadcast incentive auction, and the result was that far too little TV spectrum was reassigned for broadband at far too little value for taxpayers.
The facts bear out none of these allegations. In fact, there were:

• No secrets: all of Auctionomics’ communications are on the public record,
• No benefits for hedge funds: the funds vigorously opposed Auctionomics’ proposals, which reduced their auction profits,
• No spectrum shortfalls: the number of TV channels reassigned was unaffected by the hedge funds’ bidding, and
• No taxpayer losses: the money value created for the public by the broadband spectrum auction was more than one hundred times larger than the alleged revenue shortfall.
...
[read the rest to get the facts...]

[1] “It Is Such a Small World: The Market-Design Academic Community Evolved in a Business Network.” Stefano Feltri, Promarket, May 28, 2020.
[2] “How Market Design Economists Helped to Engineer a Mass Privatization of Public Resources.” Glen Weyl, Promarket, May 28, 2020.

Economics and Computation 2020: virtual, early and often (from June 15 to July 22)

The EC conference will be virtual this year, and the organizers have given that some thought.  Here's an announcement (via Jason Hartline, Nicole Immorlica and Scott Kominers) of events spread out over several weeks and  time zones. A lot of market design is included (as well as incorporated:)

Economics and Computation 2020

EC 2020 will be held virtually with events from June 15 to July 22 (details of virtual format).  Participation by members of related fields is strongly encouraged.  

Since 1999 the ACM Special Interest Group on Economics and Computation (SIGecom) has sponsored the leading scientific conference on advances in theory, empirics, and applications at the interface of economics and computation. The 21st ACM Conference on Economics and Computation (Virtual EC 2020) will feature invited speakers, a highlight of papers from other conferences and journals, a technical program of submitted paper presentations and posters, workshops, and tutorials.  

Registration is mandatory (register here) but complimentary with SIGecom membership of $10 ($5 for students).  Details on joining EC events will be emailed to registered participants.

An overview of the schedule:

June 15 - 19: Mentoring Workshop and Live Tutorial Pre-recording Sessions.

June 22 - July 3: Live EC Paper Pre-recording Plenary Sessions.

July 13: Tutorial Watch Parties, Business Meeting, and Poster Session

July 14 - 16: EC Conference (Paper Watch Parties, Paper Poster Sessions, and Plenaries).

July 17 - 22: Workshops.

Areas of interest include, but are not limited to:

Design of economic mechanisms: algorithmic mechanism design; market design; matching; auctions; revenue maximization; pricing; fair division; computational social choice; privacy and ethics.

Game theory: equilibrium computation; price of anarchy; learning in games.

Information elicitation and generation: prediction markets; recommender, reputation and trust systems; social learning; data markets.

Behavioral models: behavioral game theory and bounded rationality; decision theory; computational social science; agent-based modeling.

Online systems: online advertising; electronic commerce; economics of cloud computing; social networks; crowdsourcing; ridesharing and transportation; labor markets; cryptocurrencies; industrial organization.

Methodological developments: machine learning; econometrics; data mining.
*******

They have some very interesting ideas about organizing what are called "watch parties" in the program, but those are in flux, and they didn't give me permission to describe their current thoughts.

Update (embargo lifted): Jason Hartline sends these links to explain:
Philosophy: http://ec20.sigecom.org/participation/covid/

Tech details: http://ec20.sigecom.org/tech/

Earlier, Nicole Immorlica had explained this way:

"In the first hour of the watch party, we will have 3-5 parallel sessions of one hour each. In each of these, we will play three 20 min pre-recorded talks with the authors present to answer questions during the talk via chat. "In the second hour, all papers from all parallel sessions will enter a virtual poster room. Participants each control an avatar and will "walk around" the virtual room. When they get close to a poster, they can view it. When they get close to the poster presenter or another participant, that person's video enters their view and they can talk. There will also be a video steam of one minute lightening talks for the posters in one corner of the virtual room in case you want a quick recap of a talk you missed. "We're also trying to innovate around coffee breaks, having hosted conversations with a limited number of participants on a first come, first serve basis, and other activities (these are not fully formed ideas yet)." 

Kidney exchanges and Shapley values

Here's a paper aimed at thinking about kidney exchange cooperation among European national kidney exchange programs. The Shapley value here is applied to countries (not to patient-donor pairs as in some U.S. proposals), and the aim is to measure fairness of allocations with reference to Shapley values.


COMPENSATION SCHEME WITH SHAPLEY VALUE FOR MULTI-COUNTRY KIDNEY EXCHANGE PROGRAMMES
Peter Biro, Xenia Klimentova Joao Pedro Pedroso Marton Gyetvai  William Pettersson Ana Viana

ABSTRACT: Following up the proposal of (Klimentova, Viana, Pedroso and Santos 2019), we  consider the usage of a compensation scheme for multi-country kidney exchange programmes to balance out the benefits of cooperation.  The novelty of our study is to base the target solution
on the Shapley value of the corresponding TU-game, rather than on marginal contributions. We compare the long term performances of the above two fairness concepts by conducting simulations on realistically generated kidney exchange pools.

Tools to allocate medical supplies in a crisis: Cramton, Ockenfels, Roth and Wilson in Nature

Publishing a commentary in Nature is a dizzying process for anyone accustomed to the stately dance of publishing in Economics.  It's fast (in this case the commentary below appeared one month after submission), and the editors play an active role.

Borrow crisis tactics to get COVID-19 supplies to where they are needed
Emergency procedures that keep electricity running and food banks stocked can also keep health workers in protective equipment.
Peter Cramton, Axel Ockenfels, Alvin E. Roth and Robert B. Wilson
Nature 582, 334-336, 11 JUNE 2020 doi: 10.1038/d41586-020-01750-6

We began thinking about what market designers know about addressing shortages in an emergency.  We considered the experience in electricity markets and food banks as potentially relevant.
Here are some of our early notes:

• Selling to the highest bidder isn’t always acceptable in an emergency (repugnance)
• But prices matter, because they help generate new supply and reduce excessive  precautionary demand
• And prices can do some of their work even if just in specialized accounting money, so that we’re not just sending supplies to the wealthiest institutions
• Coordination is needed; centralized clearinghouses can help.
• It would have been useful to have had a sufficiently centralized clearinghouse operating as an ordinary market exchange in normal times, that could go into emergency mode when required (so that new suppliers and demanders would have had an address to go to to take part in newly formed supply chains...)
• Our experience in this regard now (after wave 1 of COVID-19) should inform how we think about these markets in the near future (wave 2, next winter, etc.) and the further future (future pandemic diseases...)
• In some respects Germany may be better poised to take steps towards a centralized clearinghouse than we are in the decentralized U.S., especially given our current political disarray. (But Germany has politics of its own...)
• It will be worthwhile to think more about the design of markets that are robust against emergencies –  so they can transition gracefully from normal to emergency states, and back.

The pandemic market for disinfectants (including Bourbon scented hand sanitizer)

Disinfectants, particularly those used in medical settings, are regulated, both to make sure that they are effective at disinfecting, and to make sure that they don't have negative (e.g. toxic) properties on people or animals or households.

The OECD summarizes the situation in a few countries from (in alphabetical order) Australia to the United States:

Emergency responses for the supply of disinfectants against Covid-19

Some further information is available on the website of the European Chemicals Agency (ECHA)

Some regulatory processes have been speeded up during the covid-19 pandemic, to allow new entrants into the market to relieve shortages.  One consequence of that is that, in the U.S. you can now buy bourbon-scented hand sanitizer, from bourbon distilleries in Kentucky and elsewhere:

See Public Sale of Hand Sanitizer – Kentucky Bourbon Trail

Laws and law enforcement for actions whose illegality is controversial (the case of 'honor killing')

Repugnant transactions and actions are sometimes banned with the full force of the law: consider  e.g. narcotics trafficking in the U.S., where our prisons are full of people convicted of drug crimes.   But sometimes, a legal ban comes with just a slap on the wrist: e.g., also in the U.S., prostitution is illegal almost everywhere, but mostly treated as a misdemeanor, not a serious crime. 

The punishment may not always fit the crime, but it tells us something about how legislators view the seriousness of the crime. 

So I was struck by the first sentences of this NY Times story about an "honor killing" in Iran:

A Daughter Is Beheaded, and Iran Asks if Women Have a Right to Safety
The so-called honor killing of a 14-year-old girl in Iran has shaken the country and forced an examination of its failure to protect women and children.

"Before he beheaded his 14-year-old daughter with a farming sickle, Reza Ashrafi called a lawyer.

"His daughter, Romina, was going to dishonor the family by running off with her 29-year-old boyfriend, he said. What kind of punishment, he asked the lawyer, would he get for killing her?

"The lawyer assured him that as the girl’s guardian he would not face capital punishment but at most 3 to 10 years in jail, Mr. Ashrafi’s relatives told an Iranian newspaper.

"Three weeks later, Mr. Ashrafi, a 37-year-old farmer, marched into the bedroom where the girl was sleeping and decapitated her.

Cognomos--course allocation software by Eric Budish et al.

Cognomos is a site that will put school administrators in touch with the designers of  Wharton's Course Match, which I've blogged about here and here with links to the underlying academic papers.

You can hear Eric Budish talk about it in the videos below.

Policing in our decentralized American democracy

The current dismal news about how American minorities are often more endangered than protected by American police forces raises a market design problem.  How can police departments be reformed, in a vast, diverse democracy, where the responsibility for policing falls largely on the smallest government units, namely towns and cities and counties?

While many responsibilities are local, government at the state and federal level (and the courts) have a role in regulating police work and in providing collective resources such as training that can't be provided effectively at the municipal level.

Here's the May 2015 (Obama era) report published by the Office of Community Oriented Policing Services (COPS):

 Final Report of the President’s Task Force on 21st Century Policing, Washington, DC: Office
of Community Oriented Policing Services. May 2015.

The overall thrust of the report is that policing is a community activity (the word "community appears 318 times), and should have a "guardian" rather than a "warrior" culture. The report has many chillingly timely recommendations. E.g.:

"2.7 RECOMMENDATION: Law enforcement agencies should create policies and procedures for policing mass demonstrations that employ a continuum of managed tactical resources that are designed to minimize the appearance of a military operation and avoid using provocative tactics and equipment that undermine civilian trust."

"6.1.3 Action Item: The Federal Government should support the continuing research into the efficacy of an annual mental health check for officers, as well as fitness, resilience, and nutrition."

"6.4 RECOMMENDATION: Every law enforcement officer should be provided with individual tactical first aid kits and training as well as anti-ballistic vests."
********

The 2016 presidential elections intervened, and this report was shelved.  Many of the authors have retreated into a private sector consulting organization named after the report on 21st Century Policing:

"21CP is an outgrowth of many of its consultant’s experiences on the President’s Task Force on 21st Century Policing. That Task Force produced a pioneering report on contemporary policing, creating a common-sense law enforcement agenda based on input from criminal justice experts, community leaders, law enforcement, and civil liberties advocates. The recommendations have been endorsed by the Major Cities Chief Association, embraced by the National League of Cities, and heralded by community organizations and civil rights activists.

"21CP Solution’s trusted police leaders and experts work on the ground in police departments across the country – leading large departments and assisting smaller agencies. Public safety in partnership with the community is not a theoretical enterprise for 21CP."

One imagines that some of these individuals could be recruited to government service if a different administration takes office in Washington in 2021.

One of the principals in 21CP, who was the director of the Office of Community Oriented Policing Services  at the time the above report was issued, is Ronald L. Davis, who came to COPS from East Palo Alto (where I lived briefly in 1978 while visiting Stanford, and near where I now live), where he was chief of police.  Here's an excerpt from the announcement of his appointment to COPS in 2013:

"Attorney General Eric Holder today announced Ronald L. Davis as the director of the Office of Community Oriented Policing Services (COPS).  Davis comes to COPS from the East Palo Alto Police Department, where he served as Chief of Police since 2005.
...
"In East Palo Alto, Davis led an organizational reform and community-policing effort that increased public trust and confidence and achieved dramatic crime and violence reductions in a city once dubbed the murder capital of the United States.  Davis also partnered with the  Department of Corrections and Rehabilitation to implement a pilot parole-reentry program that provided programming and enforcement services and a job program with the California Department of Transportation.  The East Palo Alto Police Department was the first police agency in the state to operate a state-funded reentry program.  Return-to-custody rates dropped from more than 60 percent to less than 20 percent during this program."
**********

Under the current administration in Washington, the Federal government has stepped back from police reform in a number of ways.  Here's a story that ran yesterday in the Guardian:

Trump's scrapping of Obama-era reforms hinders police reform
Trump’s justice department has dropped the use of consent decrees to bring federal oversight of troubled police departments  by Ed Pilkington.

"Under Donald Trump, the US justice department has allowed federal mechanisms designed to impose change on racist police agencies to wither on the vine. As a result, law enforcement agencies that practice racial profiling, use excessive force and other forms of unconstitutional policing are now free from federal oversight.

"The most important of those tools, known as consent decrees, were deployed extensively by the Barack Obama administration in the wake of previous high-profile police killings of unarmed black men. They included the death of Michael Brown in Ferguson, Missouri, in 2014; 12-year-old Tamir Rice in Cleveland, Ohio, that same year; and the 2015 death of Freddie Gray in Baltimore, Maryland.

"Under Obama, 14 consent decrees were enforced upon troubled and discriminatory police agencies. By contrast, none have been issued in the more than three years of the Trump administration.
...
"Consent decrees fall under the 1994 Law Enforcement Misconduct Act that was passed by Congress in the wake of the brutal beating of Rodney King by Los Angeles police three years earlier. The statute allows the US government to sue local police agencies that engage in “patterns and practices” of unconstitutional policing and fail to comply with essential reforms."
**********

For the record, here is the Law Enforcement Misconduct Statute, 42 U.S.C. § 14141, which is part of U.S. civil rights legislation:

§ 14141. Cause of action (re-codified at 34 U.S.C. 12601)

(a) Unlawful conduct

 It shall be unlawful for any governmental authority, or any agent thereof, or any person acting on behalf of a governmental authority, to engage in a pattern or practice of conduct by law enforcement officers or by officials or employees of any governmental agency with responsibility for the administration of juvenile justice or the incarceration of juveniles that deprives persons of rights, privileges, or immunities secured or protected by the Constitution or laws of the United States.

(b) Civil action by Attorney General

Whenever the Attorney General has reasonable cause to believe that a violation of paragraph (1) has occurred, the Attorney General, for or in the name of the United States, may in a civil action obtain appropriate equitable and declaratory relief to eliminate the pattern or practice.

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

Two stories in the Washington Post together frame the current political moment:

Here's the first:
‘Defund the police’ gains traction as cities seek to respond to demands for a major law enforcement shift  By Derek Hawkins, Katie Mettler and Perry Stein   June 7, 2020

"Though long a concept floated among left-leaning activists and academics, officials from Washington to Los Angeles are now seriously considering ways to scale back their police departments and redirect funding to social programs. The moves would be a strong show of solidarity with protesters, who are clamoring for social justice and to strike back at what they see as an oppressive force across the country."

And here's the second:
Protesters hope this is a moment of reckoning for American policing. Experts say not so fast.  By
Kimberly Kindy and Michael Brice-Saddler   June 7, 2020

"Charles H. Ramsey, a former chief in the District and Philadelphia and co-chair of President Barack Obama’s Task Force on 21st Century Policing, said perhaps the biggest obstacle to nationwide change is the unwieldy way in which police departments are organized. With every city, town, state and county fielding its own force, he said, it’s hard to standardize training and policies.

“Regionalizing them would be a solid first step,” Ramsey said. “But then you get into the politics. Every county and every mayor; they want their own police force, they want their own chief.”

"For that reason, a coalition of nearly 400 disparate organizations is focusing on securing federal reforms. Last week, the group — including the NAACP, the Center for Reproductive Rights and the American Music Therapy Association — sent a joint letter to congressional leaders calling for legislation to combat police violence.

“With so many police departments, it is important that there is federal action,” said Vanita Gupta, a former head of the U.S. Department of Justice’s Civil Rights Division and CEO of the Leadership Conference on Civil and Human Rights.

"Although past efforts at policing reforms stalled in Congress, Booker expressed optimism, noting that civil rights legislation has always traveled a bumpy road. "

How will the pandemic affect the medical Match?

Some thoughts on the medical match in JAMA:

Potential Implications of COVID-19 for the 2020-2021 Residency Application Cycle
Maya M. Hammoud, MD, MBA1; Taylor Standiford, BS1; J. Bryan Carmody, MD, MPH2
JAMA. Published online June 03, 2020. doi:10.1001/jama.2020.8911

"Even before COVID-19, calls to reform the residency selection process were becoming more frequent.1,2 Many issues are related to the increasing number of programs to which applicants apply. In 2019-2020, applicants from US medical schools applied to an average of 65 programs, and international medical graduates (IMGs) applied to an average of 137 programs.3 This number of applications likely does not improve match rates and imposes a substantial cost on applicants and a potentially unmanageable load on program directors.

"It is possible that the disruptions caused by COVID-19 may result in an increase in the number of applications and further stress this already challenged system. Due to testing center closures, many applicants have been unable to take portions of the United States Medical Licensing Examination (USMLE). This is especially critical for IMGs, who must pass the Step 2 Clinical Skills Examination to obtain certification from the Educational Commission for Foreign Medical Graduates and apply to US residency programs. Additionally, medical schools have shortened clerkships, shifted to virtual rotations, and canceled away electives, all of which may reduce student opportunities to obtain meaningful faculty evaluations, letters of recommendation, and signal their interest to programs. Students will encounter significant uncertainty regarding how their applications will be evaluated and may respond by applying to even more programs.

Program directors may have difficulty identifying applicants to interview without use of traditional screening metrics. Yet, challenges will persist even after interviews are offered; if travel disruptions and social distancing persist into the interview season, programs may be unable to offer in-person interviews. Temporary solutions, such as conducting virtual interviews or waiving requirements for USMLE scores and letters of recommendation, will be necessary for the selection process to function. But these stopgap solutions may exacerbate existing problems with residency selection and lead to undesirable consequences. For instance, the use of virtual interviews could result in applicants participating in more interviews. Currently, the number of interviews an applicant attends is limited by time and travel expense, but these constraints will be less relevant with virtual interviews. Yet because many programs rely on the same screening metrics, many programs already overinvite the same pool of highly-qualified applicants, with just 7% to 21% of the applicant pool filling half of all interview slots in some specialties.4 The result of those applicants accepting more interview invitations could be an increase in both the number of unmatched applicants and unfilled programs.

USP celebrates Marilda Sotomayor: “It was like a good dream, in the middle of this nightmare that we are living in”

The JORNAL DA USP, the newspaper of the Universidade de São Paulo, celebrates Marilda Sotomayor on the occasion of her election to the American Academy of Arts and Sciences.

“Foi como um sonho bom, no meio desse pesadelo que estamos vivendo”
“It was like a good dream, in the middle of this nightmare that we are living in”
Retired FEA professor, mathematics Marilda Sotomayor tells how she was invited to join the American Academy of Arts and Sciences
06/05/2020

Google translate does a pretty good job on Marilda's story of her journey from mathematics to mathematical economics, and matching theory.

The design of the economics profession, in the Journal of Economic Literature

The current issue of the JEL actually includes several papers on market design. The one I blogged about yesterday concerns market design as an outward facing part of economics--economists help others design the markets they need.  The two I'll mention today are about the design of the academic profession of Economics itself, chiefly through the design of our system of publications (which in turn determines professional rewards like tenure and prestige).  Both papers argue that the norms of publishing in well-regarded journals may inhibit economists (particularly young economists) from tackling important problems in unconventional ways.


Sins of Omission and the Practice of Economics†
George A. Akerlof
Journal of Economic Literature 2020, 58(2), 405–418   https://doi.org/10.1257/jel.20191573

Abstract: "This paper advances the proposition that economics, as a discipline, gives rewards that favor the “hard” and disfavor the “soft.” Such bias leads economic research to ignore important topics and problems that are difficult to approach in a “hard” way— thereby resulting in “sins of omission.” This paper argues for reexamination of current institutions for publication and promotion in economics—as it also argues for greatly increased tolerance in norms for publication and promotion as one way of alleviating narrow methodological biases."


Publishing and Promotion in Economics: The Tyranny of the Top Five†
James J. Heckman and Sidharth Moktan*
Journal of Economic Literature 2020, 58(2), 419–470  https://doi.org/10.1257/jel.20191574

Abstract: "This paper examines the relationship between placement of publications in top five (T5) journals and receipt of tenure in academic economics departments. Analyzing the job histories of tenure-track economists hired by the top 35 US economics departments, we find that T5 publications have a powerful influence on tenure decisions and rates of transition to tenure. A survey of the perceptions of young economists supports the formal statistical analysis. Pursuit of T5 publications has become the obsession of the next generation of economists. However, the T5 screen is far from reliable. A substantial share of influential publications appear in non-T5 outlets. Reliance on the T5 to screen talent incentivizes careerism over creativity."

David Levine on market design, in the Journal of Economic Literature

David Levine uses a book review in the JEL as an opportunity to think about what distinguishes real market design from imitations.

Radical Markets by Eric Posner and E. Glen Weyl: A Review Essay†
David K. Levine
Journal of Economic Literature 2020, 58(2), 471–487   https://doi.org/10.1257/jel.20191533

Abstract: "At a time when standards of living have improved more than any time in history, this
book makes a proposal for radical change. It is based—loosely—on market design principles. The plan for attacking overlapping ownership is reasonably well thought out. Most of the book, however, proposes to use mechanisms designed for a narrow purpose; to attack real or imagined problems that they are ill-suited to solve. I conclude that while market design has a lot to offer when properly applied, the proposals here are not sufficiently well thought out to constitute a serious plan of action."

And here are his concluding paragraphs:

"The authors have a message. Market design is great and it is easy. Markets are sloppy affairs: sometimes buyers post prices, sometimes sellers, some goods are sold at auction, others on exchanges … some are even sold (sniff, sniff) through bargaining. We can fix this: we’ll replace all of these nasty old markets with a simple clean government run auction. The poor will become rich and the rich will have to work for a living!

"I have a message. Market design is great and it is hard. Allocating oil leases is not the same as allocating the radio spectrum. Thick markets are not the same as thin markets. Auctions are complicated. Private information may lie on the buyer side, on the seller side, or both. Real market designers know this. They tailor solutions to problems: having designed an algorithm for allocating residents to hospitals and faced with the problem of matching kidney donors to patients they did not blindly claim to have solved that problem, but instead dug into the details and designed an algorithm for the kidney matching problem. Real market designers sweat the details: they improve lives and prosperity. Listen to real market designers."

Kidney Exchange: an Operations Perspective by Ashlagi and Roth

Here's a survey that puts some emphasis on the many changes in the design of kidney exchange operations and processes that have moved it from its small beginnings to its current situation facilitating annual transplants in the thousands, and might help to scale it up further, since the supply of transplants is still far short of the need. 

Kidney Exchange: an Operations Perspective
Itai Ashlagi and Alvin E. Roth
May 2020

Abstract: Many patients in need of a kidney transplant have a willing but incompatible living donor. Kidney exchange programs arrange exchanges among such incompatible patient-donor pairs, in cycles and chains of exchange, so each patient receives a compatible kidney. Kidney exchange has become a standard form of transplantation in the United States and a few other countries, in large part because of continued attention to the operational details that arose as obstacles were overcome and new obstacles became relevant. We review some of the key operational issues in the design of successful kidney exchange programs. Kidney exchange has yet to reach its full potential, and the paper further describes some open questions that we hope will continue to attract attention from researchers interested in the operational aspects of dynamic exchange.


Here's the concluding paragraph:

"Looking back, kidney exchange has accomplished a lot, but not nearly enough. The number of people waiting for a kidney transplant is growing, despite the growth of exchange. But there is room for kidney exchange to continue to grow and to increase the availability of transplants further, by designing international kidney exchanges, by starting chains with deceased donor kidneys, and by introducing other market design innovations that have yet to be explored or even conceived."

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

Now online in Management Science, Ahead of Print

Kidney Exchange: An Operations Perspective

Itai Ashlagi , Alvin E. Roth 

Published Online: 

2 Jul 2021 https://doi.org/10.1287/mnsc.2020.3954

Market Design, Human Behavior, and Management, by Chen, Cramton, List and Ockenfels

Here is a sweeping review of some of the highlights of market design, notable for its attention to the role of experiments.

Market Design, Human Behavior, and Management
Yan Chen, Peter Cramton, John A. List, Axel Ockenfels
NBER Working Paper No. 26873
Issued in March 2020

Abstract: We review past research and discuss future directions on how the vibrant research areas of market design and behavioral economics have influenced and will continue to impact the science and practice of management in both the private and public sectors. Using examples from various auction markets, reputation and feedback systems in online markets, matching markets in education, and labor markets, we demonstrate that combining market design theory, behavioral insights, and experimental methods can lead to fruitful implementation of superior market designs in practice.

And here's their concluding paragraph:

Many opportunities and challenges in market design have to do with recent advances in computer and communication technology, which often allow for radical innovation in market design. Indeed, smart markets are popping up everywhere, from new kidney exchanges, dating, job and ride hailing markets, ad and spectrum auctions, to innovative climate, electricity and financial markets. The development of these markets not only creates new business opportunities to benefit our social and economic lives, but also improve our scientific understanding of engineering incentives and markets.There is probably no other field in economics and management science, where researchers and practitioners gain so much by carefully listening to and working with one another. In this spirit, perhaps the most foundational change for generation of knowledge is that researchers will increasingly have to use the carpool lane in their own work, for riding alone will soon be an  inefficient choice in the knowledge production game

Interview congestion in the Ophthalmology Residency Match

An ophthalmology residency program surveyed all its applicants on their experience in the match:

Current Applicant Perceptions of the Ophthalmology Residency Match
Michael J. Venincasa, MD; Louis Z. Cai, MD; Steven J. Gedde, MD; Tara Uhler, MD; Jayanth Sridhar, MD

JAMA Ophthalmology May 2020 Volume 138, Number 5 

"Hundreds of individuals apply for ophthalmology residency positions each year using the Centralized Application Services (CAS), administered by San Francisco Residency and Fellowship Matching Services (SF Match). Although the match rate remains relatively stable at approximately 75%, the mean number of applications submitted has risen from 48 in 2008 to 75 in 2019.1,2 In 2010, highly qualified applicants were advised to apply to between 10 and 20 residency programs,3 but more recent studies suggested a target of 45 applications for these applicants and more than 80 for applicants with less competitive qualification.2 The application process represents a considerable financial burden for applicants; in 2018-2019, the CAS application alone cost $685 to apply to 45 programs, which increased to $1910 for 80 programs. These high costs are not unique to ophthalmology. In emergency medicine, the cost of securing a residency position was estimated at $8312 in 2016.4

These trends also come with increasing administrative burden for residency programs tasked with reviewing rising numbers of applications. As a result, many programs have increasingly emphasized quantifiable cognitive measures, such as clinical grades and the US Medical Licensing Examination (USMLE) board scores.3 The USMLE Step 1 scores and Alpha Omega Alpha Honors Medical Society membership are factors with statistically significant associations with matching into an ophthalmology residency.5

...

"Respondents applied to a mean (SD) of 76.4 (23.5) ophthalmology residency programs, received 14.0 (9.0) invitations to interview (Figure 1), and attended 10.3 (4.4) interviews. 

...

"When respondents received an interview invitation without the involvement of a wait-list, they most commonly reported receiving the invitation between 3 and 4 weeks prior to the interview date (n = 87 [47.8%]). When instead receiving their invitation from a wait-list (n = 92 [49.7%]), the most common lead time was 1 to 2 weeks prior to the interview date (n = 43 [46.2%]), with 20 (21.5%) invitations arriving less than 1 week prior

...

"Many applicants struggled with scheduling conflicts with other residency programs, where interview dates overlapped or the desired date was filled at the time of invitation response. Certain dates were especially popular for residency programs, with 23 of 116 programs (19.8%) holding interviews on a single day during the 2018-2019 interview cycle.

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Note that the Ophtalmology residency match is run by SFMatch, not the larger NRMP, but the growing number of applications and interviews are common to both matching platforms.

What values do we bequeath to our grandchildren? Alberto Alesina et al. on the generations following the Cultural Revolution in China

In what is perhaps the last paper he completed before his recent untimely death on May 23 from a heart attack, Alberto Alesina (1957-2020) and colleagues consider how effectively the Cultural Revolution in China in disrupting the old pattern of elites, and of how it looks today in the grandchildren's generation.

Persistence through Revolutions
Alberto F. Alesina, Marlon Seror, David Y. Yang, Yang You, Weihong Zeng
NBER Working Paper No. 27053, April 2020.

The Chinese Communist Revolution in the 1950s and Cultural Revolution from 1966 to 1976 aimed to eradicate inequality in wealth and education, to shut off intergenerational transmission, and to eliminate cultural differences in the population. Using newly digitized archival data and linked contemporary household surveys and census, we show that the revolutions were effective in homogenizing the population economically and culturally in the short run. However, the pattern of inequality that characterized the pre-revolution generation re-emerges today. Grandchildren of the pre-revolution elites earn 17 percent more than those from non-elite households. In addition, the grandchildren of pre-revolution elites differ in their cultural values: they are less averse to inequality, more individualistic, more pro-market, more pro-education, and more likely to see hard work as critical to success. Through intergenerational transmission, socioeconomic conditions and cultural traits thus survived one of the most aggressive attempts to eliminate differences in the population and to foster mobility.

Discussiong the pandemic with the Indian magazine Open

The Indian magazine Open published a brief interview with me, conducted by email:

‘Not only is wealth inequality rising, but the consequences of wealth inequality are also growing’

Here is the most interesting Q&A exchange:

"How concerned are you about the loss of jobs, especially in countries such as India where people in very low-income (informal) jobs are bearing the brunt of the lockdown? Is wealth inequality set to rise rapidly? ...

"In the near term I am very concerned by the loss of jobs. Not only is wealth inequality rising as a consequence, but also the consequences of wealth inequality are growing. Prosperous office workers can work remotely and be paid, but many manual workers can’t work remotely, and aren’t being paid."

Human Challenge Trials for COVID-19 vaccines

Yesterday I blogged about trying to speed up vaccine development and distribution by taking some of the risk out of it for pharma companies via an advanced market commitment, and today let's consider again one of the proposals being discussed  for speeding up the testing process.

Here's a white paper proposing some steps to further consider and prepare for human challenge trials (aka controlled human infection studies)  to speed up the testing of potential Covid-19 vaccines.It is put out by the organization 1 Day Sooner, which seeks to promote such trials, and has started assembling a list of volunteers in case challenge trials should become practical, to help vaccines become available sooner.

Evaluating use cases for human challenge trials in accelerating COVID-19 vaccine development
Linh Chi Nguyen , Christopher W Bakerlee, T. Greg McKelvey, Sophie M Rose, Alexander J Norman, Nicholas Joseph, David Manheim,, Michael R McLaren, Steven Jiang, Conor F Barnes, Megan Kinniment, Derek Foster, Thomas C Darton, Josh Morrison; for the 1Day Sooner Research Team

Abstract: Recently, human challenge trials (HCTs) have been proposed as a means to accelerate the development of an effective SARS-CoV-2 vaccine. In this paper, we discuss the potential role forsuch studies in the current COVID-19 pandemic. First, we present three scenarios in which HCTs could be useful: evaluating efficacy, converging on correlates of protection, and improving understanding of pathogenesis and the human immune response. We go on to outline the practical limitations of HCTs in these scenarios. We conclude that, while currently limited in their application, there are scenarios in which HCTs would be vastly beneficial and, thus, the option of using HCTs to accelerate COVID-19 vaccine development should be preserved. To this end, we recommend an immediate, coordinated effort by all stakeholders to (1) establish ethical and practical guidelines for the use of HCTs for COVID-19; (2) take the first steps toward an HCT, including preparing challenge virus under GMP and making preliminary logistical arrangements; and (3) commit to periodically re-evaluating the utility of HCTs amid the evolving pandemic.

Here's the main experimental design element:

"In HCTs, a relatively small number of healthy volunteer participants are administered a vaccine candidate or a placebo. However, unlike in conventional trials, consenting HCT participants are then administered an infectious dose of pathogen, and the outcomes of this infection is tracked. By challenging participants with pathogens under close observation in a clinical setting, HCTs can provide a unique opportunity to assess efficacy of a vaccine candidate."

And here are their concluding recommendations:

"To preserve the option to implement HCTs in scenarios such as this, we recommend an immediate, coordinated effort by all stakeholders to address the considerations outlined in this manuscript and make the necessary preparations. These include:
 1. Convening experts to discuss the ethical and practical considerations associated with HCTs for COVID-19, concluding in a set of  recommendations and guidelines for their use in the present pandemic and their role in the licensure process (which, notably, could provide guidance that is broadly useful in the event of future pandemics, too),
2. Taking the first practical steps toward an HCT, including preparing challenge virus under GMP and making preliminary arrangements with volunteers, vaccine developers, regulators, academic institutions, and clinical researchers to run HCTs in situations where they are expected to be highly useful,
3. Keeping informed of the evolving situation, periodically conducting a systematic reevaluation, and adjusting course based on the progress of the pandemic and the outcomes of the first drug and vaccine trials.

"HCTs have the potential to considerably shorten the COVID-19 pandemic, saving many lives and enabling economies and societies to return to normality. But we must act now to ensure this opportunity is not missed."
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It's an admirably careful and balanced paper for one with a policy recommendation, and it sets the stage for a useful and timely debate.

As an experimenter,  I have one reservation about the proposed controls. In the passage I quoted above, they said " healthy volunteer participants are administered a vaccine candidate or a placebo," i.e. the control is a placebo.  That strikes me as potentially controversial given that the next step of the experiment is to infect the participants with Covid-19.  I might prefer a study in which the control for one vaccine was a different potential vaccine, so that no subjects were (relatively) sure to contract the disease.

But this doesn't detract from the usefulness of the preparations they recommend: conducting further discussions, and taking initial practical steps.
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Here is my earlier post on this subject:

Friday, May 8, 2020 

Human Challenge Trials (aka Controlled Human Infection studies) for corona virus vaccines

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Here's a similar in spirit paper, considering when and why human challenge trials might be appropriate, put out by the World Health Organization

Key criteria for the ethical acceptability of COVID-19 human challenge studies
WHO Working Group for Guidance on Human Challenge Studies in COVID-19
Authors:  WHO

"Overview: This document aims to provide guidance to scientists, research ethics committees, funders, policy-makers, and regulators in deliberations regarding SARS-CoV-2 challenge studies by outlining key criteria that would need to be satisfied in order for such studies to be ethically acceptable."
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Here's a news story from CNN, complete with some anecdotes about the sometimes sketchy history of human challenge trials:

Thousands of people want to be exposed to Covid-19 for science
By Robert Kuznia

"Human challenge studies date all the way back to the first vaccine, for the highly lethal smallpox disease. The vaccine was developed in the late 18th century by physician Edward Jenner, who aimed to put a piece of folklore to the test: that milkmaids seemed to contract a milder form of the disease, called cowpox.
"In an experiment that today would warrant steep criminal charges, Jenner took pus from the scab of a milkmaid and inserted it into an incision on the arm of an 8-year-old boy. The child, James Phipps, developed a headache, chills and other mild symptoms, but when directly exposed to smallpox -- again through incisions on the arm -- he proved impervious."
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Here's an op-ed from the Washington Post, by the philosophers Richard Yetter Chappell and Peter Singer:

Pandemic ethics: The case for experiments on human volunteers

They conclude:
"We are ethicists, not medical or biological scientists. When it comes to factual beliefs about the pandemic, we defer to expert scientific opinion, as everyone should. But what we ought to do with the facts we have, and how we should go about seeking facts we still lack, are ethical questions. Ethicists have a crucial role to play in this debate.

"There is too much that we don’t know about covid-19. The longer we take to find it out, the more lives will be lost. (That’s why the website asking for vaccine volunteers is called “1 Day Sooner.”) If healthy volunteers, fully informed about the risks, are willing to help fight the pandemic by aiding promising research, there are strong moral reasons to gratefully accept their help. To refuse it would implicitly subject others to still graver risks."
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And here's a  post  from the Volokh Conspiracy (pointed out to me by Frank McCormick) focusing on the question of paying volunteers for human challenge trials:

The Moral Case for Testing Coronavirus Vaccines through "Challenge Trials" on Paid Healthy Volunteers
Doing so can potentially save many thousands of lives. And moral objections to this practice are weak. The issues here are very similar to the longstanding debate over whether we legalize organ markets.  by ILYA SOMIN .

He concludes:
"Like others who risk their lives to benefit others, challenge trial volunteers deserve our gratitude, and proper compensation for their efforts. And there is no good moral justification for forbidding them to take those risks. To the contrary, we should move ahead with challenge trials as soon as feasible. Every day of delay could literally be a matter of life and death—a great many lives and deaths."

Advanced market commitment for a successful COVID-19 vaccine

Vaccines take a long time to develop and test, and so are risky for pharmaceutical firms to invest in. Here's a NY Times op-ed by several prominent economists suggesting that a market design solution, a government commitment in advance to support the market price of a successful vaccine, could be applied to speeding the development and widespread availability of a COVID-19 vaccine.


In the Race for a Coronavirus Vaccine, We Must Go Big. Really, Really Big.
We should commit tens of billions toward a program.
By Susan Athey, Michael Kremer, Christopher Snyder and Alex Tabarrok

"Vaccines often take 10 years to bring to market. We want a new vaccine as fast as possible, where each month matters.

The fact is that starting from the early stages of development, most vaccines fail. We cannot afford to fail, so we need to plan for success. To do that, we must think and invest as ambitiously as we can — and that means in a Covid vaccine advance market commitment.

The A.M.C. model was proposed in the early 2000s. And in 2007, the pneumococcus advance market commitment guaranteed vaccine manufacturers sales at a fixed price in return for an effective vaccine. It led to the successful development and distribution of hundreds of millions of doses of vaccine ...

"An advance market commitment for Covid-19 should combine “push” and “pull” incentives. The “pull” incentive is the commitment to buy 300 million courses of vaccine at a per-person price of $100, for vaccines produced within a specified time frame. If multiple vaccines are developed, the A.M.C. fund will have authority to choose products to purchase based on efficacy, the availability of sufficient vaccine for timely vaccination or suitability for different population groups. So firms compete to serve the first 300 million people with the most attractive vaccines, and the “pull” component provides strong incentives for both speed and quality.

"The “push” incentive guarantees firms partial reimbursement for production capacity built or repurposed at risk and partial reimbursement as they achieve milestones. The partial reimbursement ensures that manufacturers have “skin in the game,” while inducing them to build large-scale capacity before approval is certain."
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Earlier post: Monday, March 16, 2020

The Advance Market Commitment for pneumonia vaccine, by Kremer, Levin, and Snyder