Showing posts with label incentives. Show all posts
Showing posts with label incentives. Show all posts

Tuesday, February 13, 2024

Incentives to take tests and get vaccinated

 As the pandemic phase of Covid-19 recedes, we can reflect on what we've learned about demand for tests and for vaccines.   Here's a paper from a year ago that I missed at the time  that discusses incentives and defaults.

Incentives and Defaults Can Increase COVID-19 Vaccine Intentions and Test Demand, by Marta Serra-Garcia and Nora Szech, Management Science, Vol. 69, No. 2, February 2023, Pages 723-1322, iii-iv

Abstract: Willingness to vaccinate and test are critical in the COVID-19 pandemic. We study the effects of two measures to increase the support of vaccination and testing: defaults and monetary compensations. Some organizations, such as restaurants, fire departments, hospitals, or governments in some countries, have used these measures. Yet there is the concern that compensations could erode intrinsic motivation and decrease vaccination intentions. We show that, in the early stages of the pandemic, both approaches, compensations and defaults, significantly increased COVID-19 test demand and vaccine intentions. Compensations for vaccines, however, need to be large enough because low compensations can backfire. We estimate heterogeneous treatment effects to document which groups are more likely to respond to these measures. The results show that defaults and avoidance of small compensations are especially important for individuals who are more skeptical of the vaccine, measured by their trust in the vaccine and their political views. Hence, both measures could be used in a targeted manner to achieve stronger results.

Monday, January 22, 2024

Reporting and misreporting from Organ Procurement Organizations (OPOs)

 Because there are shortages of organs for transplant, it is important to measure how successful Organ Procurement Organizations (OPOs) are at recovering and transplanting organs.  But sometimes definitions can get in the way, and this was the case in islet transplants from deceased donors, into patients with diabetes.  Pancreatic islets are the cells that produce insulin, and it was (and I think still is) regarded as an experimental procedure to transplant islets from a deceased donor's pancreas, rather than the whole pancreas.  So islet transplantation was classified as a research activity.

To encourage this use of deceased donor pancreases, recovery of a pancreas "for research" was counted as a transplant. But some OPO's have heavily gamed this, reporting that they recovered a pancreas when the "research" wasn't connected to transplantation.  That loophole is now being closed.

Here's a January 18 memo from HHS, CMS, Center for Clinical Standards and Quality

Organ Procurement Organization (OPO) Conditions for Coverage – Definition Clarification 



"Background:

"The OPO CfCs are intended to drive improvements in organ procurement and transplantation through, among other provisions, the donor and transplantation outcome measures. OPOs are required to report data related to pancreata procured for research, and this data is incorporated into calculations used to assess compliance with the donor and transplant outcome measures and are used for re-certification purposes. To facilitate accurate reporting of data related to pancreata donors, the term “donor” is defined in CMS regulation to specify that, among other requirements, an individual would be considered a donor even if only the pancreas is procured and is used for research or islet cell transplantation.

"CMS has noted a significant increase in the number of pancreata procured since this definitionwas revised in 2020, raising questions about the interpretation of this definition by OPOs and how this definition is applied to reporting data related to donors of pancreata used for islet cell research. There is a concern that the increase in pancreata procured may not reflect a meaningful increase in pancreata being actually used for islet cell research, and instead may reflect pancreata procured for other purposes. This memo is clarifying that the pancreata must be used for islet cell research. 

...

"In summary, this memo is clarifying that consistent with the Pancreatic Islet Cell Transplantation Act of 2004, only pancreata procured by an OPO and used for islet cell transplantation or research shall be counted"

Friday, January 19, 2024

Incentives and mis-incentives in science (Freakonomics part II)

 Freakonomics has a second post on fraud in science, and you can listen or read the transcript here:

Can Academic Fraud Be Stopped?

Two quotes stood out for me:

1. VAZIRE: Oh, I don’t mind being wrong. I think journals should publish things that turn out to be wrong. It would be a bad thing to approach journal editing by saying we’re only going to publish true things or things that we’re 100 percent sure are true. The important thing is that the things that are more likely to be wrong are presented in a more uncertain way. And sometimes we’ll make mistakes even there. Sometimes we’ll present things with certainty that we shouldn’t have. What I would like to be involved in and what I plan to do is to encourage more post-publication critique and correction, reward the whistleblowers who identify errors that are valid and that need to be acted upon, and create more incentives for people to do that, and do that well.

...

2. BAZERMAN: Undoubtedly, I was naive. You know, not only did I trust my colleagues on the signing-first paper, but I think I’ve trusted my colleagues for decades, and hopefully with a good basis for trusting them. I do want to highlight that there are so many benefits of trust. So, the world has done a lot better because we trust science. And the fact that there’s an occasional scientist who we shouldn’t trust should not keep us from gaining the benefit that science creates. And so one of the harms created by the fraudsters is that they give credibility to the science-deniers who are so often keeping us from making progress in society.


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Earlier:

Sunday, January 14, 2024

Thursday, January 18, 2024

It's a dominant strategy for deferred acceptance proposers to state true preferences in the marriage problem: simple proof

This post is not entirely self-contained, it is in some sense a continuation of and addition to my talk last year at the Simons Institute, which you can see at this link: 

Simple Proofs of Important Results in Market Design-- (video of my talk at Berkeley's Simons Institute)

In that talk (based on work I'm doing with Mike Ostrovsky) I defined the marriage model of Gale and Shapley, gave necessary definitions,  and following the style of their original article, I showed simple, verbal proofs of a number of results, including the constant employment ("lone wolf") theorem:

Constant employment theorem: In a "marriage market"(M,W, P) with strict preferences, the set of people who are single is the same for all stable matchings.

Now based on that theorem, here's a simple proof of the dominant strategy theorem, inspired by a  very short proof (with attributions to Alex Teytelboym and Ravi Jagadeesan) in Nick Arnosti's recent blog post A Short Proof of the Truthfulness of DA by Nick Arnosti 2023/10/01 

Here's the theorem to be proved:

Dominant Strategy Theorem (Dubins and Freedman, Roth): In the M-optimal stable mechanism for the marriage problem (e.g. when the man-proposing deferred acceptance algorithm is used, which produces the most favorable stable matching for every man) it is a dominant strategy for each man i to state a preference list corresponding to his true preferences ≻.


Notation: for any preference ≻′ of player i, an outcome is ≻′-stable if it is stable when i reports ≻′ and everyone else's preferences remain constant.

Proof (following Arnosti)

Suppose that the theorem is false. That is, suppose there exist preferences for all other agents such that when i reports ≻, the resulting ≻-stable matching μ gives μ(i)=w, and when i reports ≻′ ≠ ≻, the resulting ≻′-stable matching μ′ gives μ′(i)=w′≻w. (Note that the final comparison is ≻, i.e. take ≻ to be i's true preference list.)

Consider the market in which i lists w′ as the only acceptable woman (and everyone else's preferences remain fixed). We'll see that this will lead to a contradiction with the constant employment theorem, by implying that there must exist a {w'}-stable matching in which i matches to w′, and another {w'}-stable matching in which i is unmatched. 

1. The matching μ′ assigns i to w′. Because it is ≻′-stable, it must also be {w′}-stable: the only difference between ≻′ and {w'} is that we have removed women from i’s list, which clearly does not create any new blocking pairs.

Note: this step uses only the definition of stability.

2. Let ≻′′ be the deviation in which i truncates ≻ below w′ (i leaves everyone below w′ off of his list), and let μ′′ be the resulting matching.

a. The matching μ′′ leaves i unassigned.  This follows from the fact that, if it matched i, then μ″ would be ≻-stable, since ≻ differs from ≻'' only in that it restores the truncated elements of i's preference, which would be below i's match and hence not introduce any new blocking pairs (since it wouldn't change i's match). But  μ″ can't be ≻-stable,  because w is i’s best ≻-stable partner by assumption, and is worse than all women listed in ≻′′.*

Note: this step uses the definition of stability and fact that μ is optimal for i.

b. Because μ′′  (which leaves i unassigned) is ≻′′-stable, it is also {w′}-stable: the only difference between ≻′′ and {w′} is that we have removed women from i’s list, which does not create any new blocking pairs).

Note: this step uses only the definition of stability.

To recap: μ′ and μ′′ must both be {w′}-stable, but i is matched to w′ by μ′ and unmatched by μ′′ (a contradiction).

This completes the proof.

*Note that the reason μ′′ isn't ≻-stable is that it leaves i unassigned, and so creates new blocking pairs involving i with respect to his true full preferences.


Sunday, January 7, 2024

Market Design for Surface Water , by Ferguson and Milgrom

 The potential market for surface water is a market in which any transfer of rights involves externalities affecting the water consumption of others.

Market Design for Surface Water  by Billy A. Ferguson & Paul Milgrom, NBER WORKING PAPER 32010, DOI 10.3386/w32010, December 2023

Abstract: Many proposed surface water transfers undergo a series of regulatory reviews designed to mitigate hydrological and economic externalities. While these reviews help limit externalities, they impose substantial transaction costs that also limit trade. To promote a well-functioning market for surface water in California, we describe how a new kind of water right and related regulatory practices can balance the trade-off between externalities and transaction costs, and how a Water Incentive Auction can incentivize a sufficient number of current rights holders to swap their old rights for the new ones. The Water Incentive Auction adapts lessons learned from the US government’s successful Broadcast Incentive Auction.

From the introduction:

"Why is there so little water trading in California despite the heterogeneous uses and huge price differences? The consensus among many economists studying water is that much of the problem lies in an archaic system of property rights, which was perhaps simple and clear enough to function well when California was first settled, but which is dysfunctional today. We will argue below that trading in traditional water rights creates externalities, so efficiency-enhancing changes in water allocations cannot be achieved by exhausting profitable bilateral trades. Rather, it requires a coordinated, multilateral effort. The next section on the Institutional Background provides a description of water rights and the externalities that can result from trade or from certain other decisions about uses. What is most novel in this paper comes after that: we analyze a mechanism that enacts a change in water rights that could lead to much more efficient trade.

Our analysis draws on lessons learned from the US Broadcast Incentive Auction in 2016-17, in which some rights to use radio spectrum for television broadcast were combined, converted, and subdivided into more flexible rights that were better suited for wireless broadband communications. This was accomplished using an auction procedure designed to provide an “incentive” for broadcasters to participate. As in that auction, participation in an analogous Water Rights Incentive Auction could be entirely voluntary, with current water users incentivized to participate because they could trade their existing rights for new, more flexible rights and possibly additional payments as determined by an auction. Just as the Broadcast Incentive Auction achieved its goals described in the National Broadband Plan even though many broadcasters chose not to sell their rights, a Water Incentive Auction could provide the substantial benefits of more flexible water rights even if many water users decline to participate. We describe some details of a possible Water Incentive Auctions in a later section of this paper."

Tuesday, September 19, 2023

Organ transplantation in China: in transition--and controversy about paying funeral costs

 I recently spoke at the CAST transplant conference in Hong Kong (see picture), and the underlying theme of my talk, and of many talks there, was the transition of transplantation in China, and what its future might hold.

Jie-Fu HUANG is the other speaker on Zoom (to my right and your left), and Haibo Wang is on the far left on stage.

Here are two of my opening slides (using 2021 data from the Global Observatory on Donation and Transplantation)


On the left, you see that, today, China and India already perform more kidney transplants than any country in the world except the U.S.  On the right, you see that, by virtue of their large populations, they accomplish this despite their quite low rates of transplants per million population, compared to the U.S. and countries in Europe.  So if China and India can raise their transplant rates to rates comparable to the U.S. and Europe, most of the transplants in the world will be done in Asia, and many many additional lives will be saved.

Note that China mostly transplants kidneys from deceased donors, while India mostly transplants kidneys from living donors. So they have different paths (and plenty of untapped potential) for raising donation and transplantation rates.  And their paths to their current positions have also been very different.

Here is a recent account reflecting China's recent progress:

Chen, Zhitao, Han, Ming, Dong, Yuqi, Zeng, Ping, Liao, Yuan, Wang, Tielong, et al. (2023). First Affiliated Hospital of Sun Yat-sen University, Guangzhou, People's Republic of China: 5-year Experience at a High-volume Donor and Recipient Liver Transplant Center. Transplantation, 107, 1855-1859. https://doi.org/10.1097/TP.0000000000004561

" In 1972, our center performed the first living donor kidney transplantation in China. Since then, kidney and liver transplant programs have evolved. By the beginning of the 21st century, organ transplantation had advanced, and clinical liver transplants have been performed successfully at the First Affiliated Hospital of Sun Yat-sen University.1

"Organ shortage has been a prominent feature at our institution as it has been around the world. Starting in the early 1980s, many organs had been procured from inmates on death rows. This unethical approach has been rightfully criticized by the worldwide community. As a consequence, the source of organs for transplants has solely been replaced by voluntary donations from Chinese citizens since January 1, 2015.

...

"Moreover, policies and methods for humanitarian aid to donor families were established. Those policies follow WHO guidelines while recognizing specific aspects of the Chinese culture. The State Ministry of Health and the Red Cross Society of China launched a pilot project on organ donation after the death of citizens in 2010 and established the China Organ Donation Committee. The principle of this pilot project was to learn from the experiences and standards in developed countries while recognizing national conditions and the social reality in China aiming to build an ethical and effective scientific organ donation and transplantation system.2

**********

In the same issue of Transplantation as the above article is this invited commentary by Ascher and Delmonico, both former Presidents of The Transplanation Society (of which Transplantation is the official journal). They largely approve of the effort China has made in transplants, but they have a big reservation.

Ascher, Nancy, MD, PhD & Delmonico, Francis. (2023). Organ Donation and Transplantation in China. Transplantation, 107, 1880-1882. https://doi.org/10.1097/TP.0000000000004562

"The date of 2015 is important for the review of any organ transplantation report from China because of the public proclamation in the media in 2015 prohibiting the use of organs from executed prisoners. Clinical transplantation articles antecedent to 2015 have been consistently rejected by Transplantation and the international community because the source of the transplanted organs was most often an incarcerated prisoner. China took a major step to condemn this practice publicly in 2015. However, because there is no law or regulation that prohibits this unethical practice, there has been ongoing concern that this practice may be continuing. Notwithstanding such a reality, there have been regulations that are citable and may be reflective of the changing experience of organ donation and transplantation in China that are consistent with the World Health Organization (WHO) Guiding Principles.

...

"WHAT CONTINUES TO BE OBJECTIONABLE

"The Chinese Red Cross is prominent in the organ donation process and a center of support for deceased donor families designated by the Red Cross as humanitarian aid to donor families.7 However, such humanitarian aid, although not limited to China, should not be misinterpreted to be an effort because it includes payment to elicit consent for donation. The Sun Yat-sen publication suggests that the Red Cross policies follow WHO guidelines while recognizing specific aspects of Chinese culture without elaboration as to the cultural details. A payment to donor families for funeral expenses or other monetary incentives should be recognized as a form of commercialization and would not comply with WHO guidelines."

**********

Some background may help put this objection in perspective. Doctors Delmonico and Ascher are prominent signatories of a declaration that payments to families of organ donors are crimes against humanity (as are payments to living donors, and both are declared comparable to transplanting organs from executed prisoners, and to be organ trafficking. See my 2017 post.)

So, they raise the question of whether saving many lives by increasing deceased donation in China will be justified if it involves paying funeral expenses of donors.  

My guess is that Chinese health authorities, thinking of the many lives to be saved, will think that this act of generosity to families of deceased donors will indeed be justified, taking account of (see above) "national conditions and the social reality in China aiming to build an ethical and effective scientific organ donation and transplantation system." 

Many people in China and elsewhere might even think that little if any justification is needed for generosity, particularly generosity to families of deceased donors, that is to families who are themselves generous.

Thursday, September 7, 2023

Navigating NYC school choice: advice for families

 Each year a new cohort of families has to navigate school choice in New York City.  The city offers lots of resources for gathering information.  One advantage of employing methods that make it safe to reveal true preference orders is that at least one aspect of the process is straightforward. (Of course, constructing a list of 12 schools out of the many available isn't easy.)

The NY Times offers a guide, which is full of information on how to go about gathering information with which to form preferences over schools:

Applying to N.Y.C. Public Schools Can Feel Daunting. Here’s What to Know. What matters when choosing a school? How should you compare options? And what’s the best strategy for getting your first choice?  By Troy Closson, Sept. 5, 2023,

"What’s the best strategy when applying?

"You should rank schools and programs in order of your true preference. There is no better approach. Students are considered for a lower choice only if a higher ranked school does not have space.

"Admissions experts suggest creating a complete list of 12 schools with a balance of programs, priorities and demand per seat, which you can find on MySchools. Apply by the deadline; there is also no benefit to applying earlier"


HT: Parag Pathak

*******

Another resource:

Abdulkadiroglu, Atila , Parag A. Pathak, and Alvin E. Roth, "Strategy-proofness versus Efficiency in Matching with Indifferences: Redesigning the NYC High School Match,'' American Economic Review, 99, 5, Dec. 2009, pp1954-1978. 

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."


Sunday, April 30, 2023

Statement of Policy Principles and Solutions: Living Organ Donation, from the American Association of Kidney Patients (AAKP), the American Society of Transplant Surgeons (ASTS), and the American Society of Transplantation (AST)

 Here's a joint statement about living-donor kidney transplantation from the American Association of Kidney Patients (AAKP), the American Society of Transplant Surgeons (ASTS), and the American Society of Transplantation (AST). The statement opposes rethinking the ban on compensation for donors, suggests that other policies should be evidence-based, and opposes increased bureaucratization and cumbersome regulation of the transplant process.

Statement of Policy Principles and Solutions:  Living Organ Donation

"We stand together in our conviction that any policy changes impacting living organ donation, including those aimed at improving access to living donor transplantation and increasing the survival of already transplanted patients, must begin with principled and transparent dialogue with patients and the expert transplant teams who care for them.  

...

"The United States ranks in the top tier of nations in terms of living donor transplant rates,[1] meaning the current system for living donation works. However, disparities in access to living donor transplantation remain, and we must continue to improve and expand living donor transplantation for those in need.  As such, we support policy changes that are patient-centric, fiscally realistic, and ethically and legally sound. 

"Over the past decade some well-intended organizations and advocates have advanced ideas to increase access to living donor transplantation, including direct payments for or large financial incentives for organ transplants, that may appear expedient but can result in serious adverse consequences for transplantation and for patients. Many of these proposals pose serious unintended negative consequences to both donors and to public trust in organ donation. We fundamentally reject efforts to model changes to the current US system based on research or organ transplant practices in nations such as China and Iran whose governments fail to meet or ignore high international and US standards for ethical medical research and basic human rights.

...

"AAKP, ASTS, and AST strongly support the elimination of disincentives to transplantation and adamantly oppose coercive financial incentives to donate.

...

"AAKP, ASTS, and AST believe that improvements to the transplant system can best be made through ethically and legally sound, evidence-based, data driven policies informed and guided by patients and transplant professionals rather than by overhauling the entire transplant system.

"The transplantation system is a public-private partnership between the federal government and the transplant community and is designed, in part, to prevent overt political influence or other governmental interference in shared patient-physician decision making and clinical judgement. The relationship between patients, including living organ donors, and the doctors and medical institutions they choose to care for them must be protected and respected, as should the ability of individual transplant professionals to make clinical decisions in the best interest of those patients.

"Transplantation is heavily regulated by multiple federal agencies, including the Centers for Medicare and Medicaid Services (CMS), the Health Resources Services Administration (HRSA), and two HRSA contractors (the Organ Procurement and Transplantation Network (OPTN) and the Scientific Registry of Transplant Recipients (SRTR)).  Transplant centers are subject to duplicative (and often conflicting) requirements and surveys imposed by CMS and the OPTN. Living donor transplant programs are subject to additional scrutiny to ensure that donors are not pressured, coerced, or intimidated into donating an organ.  All living donor transplant programs are required to have independent living donor advocates that ensure that donors’ full and informed consent is given with a full understanding of the procedure and its potential risks and consequences.

"Into this existing and complex regulatory framework, some organizations are proposing policy and legislative changes that would either expand federal control over transplant by inserting yet another federal agency into the process or overhauling the entire transplant system to give federal agencies, as well as political appointees and politicians, greater authority to regulate living donor transplantation. Exposing the living organ donation system to such political influence and putting decision-making in the hands of non-transplant experts is a mistake with dangerous consequences for patient health, public trust, and donor and patient confidence.

"These proposals raise the possibility that the federal government would mandate a “one-size fits all approach” to an incredibly complex set of clinical problems. Such an approach would likely result in fewer innovations and fewer opportunities to reduce barriers to transplantation, especially for historically underserved communities. There are many potential reforms to the transplant system that can be effective, have been suggested by the wider transplant community over the past decade, and should be adopted by Congress and federal agencies. However, any policy or legislative proposal that seeks to amend or replace the existing system with an even larger federal bureaucratic reach with the potential for federal interference in decisions made among organ donors and patients and the doctors and medical institutions they choose to receive care from should be viewed with skepticism.

"We oppose policy efforts that seek to place any governmental entity in the position of determining clinical criteria for living donor transplantation or otherwise interfering with the relationship between and among potential recipients, potential donors, and their caregivers.

*******

As a reader of many such joint statements, I wonder if the phrase  "coercive financial incentives" resulted from a compromise between those who believe that all financial incentives are coercive, and those who wish to leave the door open in the future to ordinary, non-coercive financial incentives, of the kinds that attach to so many human activities, and have done so much to relieve other kinds of shortages.

HT: Laurie Lee via Frank McCormick

Tuesday, January 24, 2023

"Financial incentives for vaccination do not have negative unintended consequences," in Nature

 Here's a recent article in Nature whose title effectively summarizes its conclusions, and brings some evidence from RCTs to bear on the issue of whether financial incentives corrupt innate values:

Florian H. Schneider, Pol Campos-Mercade, Stephan Meier, Devin Pope, Erik Wengström & Armando N. Meier, "Financial incentives for vaccination do not have negative unintended consequences. Nature (2023). https://doi.org/10.1038/s41586-022-05512-4

Abstract: Financial incentives to encourage healthy and prosocial behaviours often trigger initial behavioural change1,2,3,4,5,6,7,8,9,10,11, but a large academic literature warns against using them12,13,14,15,16. Critics warn that financial incentives can crowd out prosocial motivations and reduce perceived safety and trust, thereby reducing healthy behaviours when no payments are offered and eroding morals more generally17,18,19,20,21,22,23,24. Here we report findings from a large-scale, pre-registered study in Sweden that causally measures the unintended consequences of offering financial incentives for taking the first dose of a COVID-19 vaccine. We use a unique combination of random exposure to financial incentives, population-wide administrative vaccination records and rich survey data. We find no negative consequences of financial incentives; we can reject even small negative impacts of offering financial incentives on future vaccination uptake, morals, trust and perceived safety. In a complementary study, we find that informing US residents about the existence of state incentive programmes also has no negative consequences. Our findings inform not only the academic debate on financial incentives for behaviour change but also policy-makers who consider using financial incentives to change behaviour.


"We exploit a randomized controlled trial (RCT) in the context of financial incentives for COVID-19 vaccination (P.C.-M. et al., unpublished, and ref. 5). Participants were offered payments of 200 Swedish krona (SEK; about US $24 at the time) for taking a first dose of a COVID-19 vaccine, which increased first-dose uptake by 4 percentage points 30 days after the trial (uptake remained higher even 3 months later). The RCT setting is ideal in that it allows us to compare individuals who were randomly offered financial incentives for vaccination with individuals who were not offered any financial incentives. We combine the RCT data with new Swedish administrative records for second-dose uptake and with rich, individual-level survey data.

...

"We complement our evidence from Sweden with evidence on the effects of large-scale incentive programmes implemented by US state governments. In a pre-registered study in the USA (n = 3,062), participants randomly assigned to the incentives condition received detailed information about their state’s COVID-19 vaccine incentive programme, whereas participants in the control condition did not receive this information. Because most of the participants were unaware that their state offered incentives for vaccination, this experimental design overcomes the identification problems by creating random variation in perceived exposure to incentives. In line with the evidence from Sweden, we find no negative impacts of being informed about incentive programmes on the willingness of participants to take a further dose"

Saturday, November 12, 2022

Deceased donor organ discards on weekends, in the the Annals of Transplantation

 Hospital resources and physician incentives can be stressed on weekends, and there is historical evidence that organ discards are higher on weekends.  Here's a study suggesting that is still a thing.

Yamamoto, T., A. Shah, M. Fruscione, S. Kimura, N. Elias, H. Yeh, T. Kawai, and J. F. Markmann.  Revisiting the "Weekend Effect" on Adult and Pediatric Liver and Kidney Offer Acceptance. Annals of Transplantation. 2022 Nov;27:e937825. DOI: 10.12659/aot.937825. PMID: 36329622.

"BACKGROUND: Weekends can impose resource and manpower constraints on hospitals. Studies using data from prior allocation schemas showed increased adult organ discards on weekends. We examined the impact of day of the week on adult and pediatric organ acceptance using contemporary data.

"MATERIAL AND METHODS: Retrospective analysis of UNOS-PTR match-run data of all offers for potential kidney and liver transplant from 1/1/2016 to 7/1/2021 were examined to study the rate at which initial offers were declined depending on day of the week. Risk factors for decline were also evaluated.

"RESULTS: Of the total initial adult/pediatric liver and kidney offers, the fewest offers occurred on Mondays and Sundays. The decline rate for adult/pediatric kidneys was highest on Saturdays and lowest on Tuesdays. The decline rate for adult livers was highest on Saturday and lowest on Wednesday. In contrast, the decline rate for pediatric livers was highest on Tuesdays and lowest on Wednesdays. Independent risk factors from multivariate analysis of the adult/pediatric kidney and liver decline rate were analyzed. The weekend offer remains an independent risk factor for adult kidney and liver offer declines, but for pediatric offers, these were not significant independent risk factors.

"CONCLUSIONS: Although allocation systems have changed, and the availability of kidneys and livers have increased in the USA over the past 5 years, the weekend effect remains significant for adult liver and kidney offers for declines. Interestingly, the weekend effect was not seen for pediatric liver and kidney offers.

Monday, October 24, 2022

Informationally Simple Incentives by Simon Gleyze and Agathe Pernoud

 Agathe Pernoud is on the Economics job market from Stanford this year, and is interested in the properties of information in environments in which agents may need to learn their own preferences.

Here are two papers that advance the theory of those situations, and expand on the fragility of 'dominant strategies' as the strategy space is enlarged.

Informationally Simple Incentives by Simon Gleyze and Agathe Pernoud, Journal of Political Economy, forthcoming.

Abstract: We consider a mechanism design setting in which agents can acquire costly information on their preferences as well as others’. A mechanism is informationally simple if agents have no incentive to learn about others’ preferences. This property is of interest for two reasons: First, it is a necessary condition for the existence of dominant strategy equilibria in the extended game.  Second, this endogenizes an “independent private value” property of the interim information structure. We show that, generically, a mechanism is informationally simple if and only if it satisfies a separability condition which rules out most economically meaningful mechanisms."


See also Agathe's job market paper:

How Competition Shapes Information in Auctions by Simon Gleyze and Agathe Pernoud

We consider auctions where buyers can acquire costly information about their valuations and those of others, and investigate how competition between buyers shapes their learning incentives. In equilibrium, buyers find it cost-efficient to acquire some information about their competitors so as to only learn their valuations when they have a fair chance of winning. We show that such learning incentives make competition between buyers less effective: losing buyers often fail to learn their valuations precisely and, as a result, compete less aggressively for the good. This depresses revenue, which remains bounded away from the expected second-highest valuation even when information costs are small. It also undermines price discovery. Finally, we examine the implications for auction design. First, setting an optimal reserve price is more valuable than attracting an extra buyer. Second, the seller can incentivize buyers to learn their valuations, hence restoring effective competition, by maintaining uncertainty over the set of auction participants.


Monday, October 3, 2022

Choosing (as if) from a menu (by Gonczarowski, Heffetz and Thomas; and by Bó, and Hakimov)

What makes serial dictatorship so obviously strategy proof is that it gives each participant the opportunity to choose from a menu, and get what he/she picks.  So the dominant strategy is to pick what you want (and if you have to delegate the decision by submitting a list of preferences, it is a dominant strategy to state your true preferences.

Here are two papers differently inspired by that thought, which seek to reformulate matching mechanisms so that they look to each player like choice from a menu.

Strategyproofness-Exposing Mechanism Descriptions by Yannai A. Gonczarowski, Ori Heffetz, Clayton Thomas

Abstract: "A menu description defines a mechanism to player i in two steps. Step (1) uses the reports of other players to describe i's menu: the set of i's potential outcomes. Step (2) uses i's report to select i's favorite outcome from her menu. Can menu descriptions better expose strategyproofness, without sacrificing simplicity? We propose a new, simple menu description of Deferred Acceptance. We prove that -- in contrast with other common matching mechanisms -- this menu description must differ substantially from the corresponding traditional description. We demonstrate, with a lab experiment on two simple mechanisms, the promise and challenges of menu descriptions."

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Pick-an-object Mechanisms by Inácio Bó, Rustamdjan Hakimov

Abstract: "We introduce a new family of mechanisms for one-sided matching markets, denoted pick-an-object (PAO) mechanisms. When implementing an allocation rule via PAO, agents are asked to pick an object from individualized menus. These choices may be rejected later on, and these agents are presented with new menus. When the procedure ends, agents are assigned the last object they picked. We characterize the allocation rules that can be sequentialized by PAO mechanisms, as well as the ones that can be implemented in a robust truthful equilibrium. We justify the use of PAO as opposed to direct mechanisms by showing that its equilibrium behavior is closely related to the one in obviously strategy-proof (OSP) mechanisms, but implements commonly used rules, such as Gale-Shapley DA and top trading cycles, which are not OSP-implementable. We run laboratory experiments comparing truthful behavior when using PAO, OSP, and direct mechanisms to implement different rules. These indicate that agents are more likely to behave in line with the theoretical prediction under PAO and OSP implementations than their direct counterparts."

Monday, May 9, 2022

School choice with outside options , by Akbarpour, Kapor, Neilson, van Dijk, and Zimmerman in J.Pub.E.

 One of the differences between market design and the theoretical mechanism design literature is that in mechanism design, the theorist creates the whole universe of strategies available to participants, while in practical market design, the marketplace being designed is part of some larger economic environment, which gives the participants potentially bigger strategy sets.

Here's a paper that takes that point of view with respect to school choice. In the empirical part of the paper, a switch from a manipulable immediate acceptance algorithm to a strategy proof  deferred acceptance algorithm influences families with an outside option (a guaranteed continuation in the school where they are enrolled in pre-kindergarten) differently from families without that safe option.  When the manipulable algorithm is used, families without an outside option often find it too risky to compete for scarce spaces in the most desirable schools, which they can safely do when the strategy proof algorithm is employed.

Centralized School choice with unequal outside options by Mohammad Akbarpour, Adam Kapor, Christopher Neilson, Winnie van Dijk, Seth Zimmerman, Journal of Public EconomicsVolume 210, June 2022, 104644

Abstract: We study how market design choices exacerbate or mitigate pre-existing inequalities among participants. We introduce outside options in a well-known school choice model, and show that students always prefer manipulable over strategy-proof mechanisms if and only if they have an outside option. We test for the proposed relationship between outside options and manipulability in a setting where we can identify students’ outside options and observe applications under two mechanisms. Consistent with theory, students with an outside option are more likely to list popular, highly-rated schools under the Boston mechanism, and this gap disappears after switching to a Deferred Acceptance mechanism.

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Related earlier posts:

Monday, January 28, 2019

And here's a post about a paper that takes outside options seriously from a different point of view.

Monday, December 14, 2020

Tuesday, March 1, 2022

Targeting High Ability Entrepreneurs Using Community Information: Mechanism Design in the Field By Reshmaan Hussam, Natalia Rigol, and Benjamin N. Roth

 Mechanisms designed to elicit truthful reporting in the laboratory sometimes are cumbersome to administer and difficult to explain.  Here's a paper that finds that simple attempts to incentivize truthful reporting (including allowing other participants to hear each report, as well as small payments for reports that conform to community consensus) can help eliminate incentives to boost family and friends, when reports concern who could make most effective use of a cash grant.

Targeting High Ability Entrepreneurs Using Community Information: Mechanism Design in the Field By Reshmaan Hussam, Natalia Rigol, and Benjamin N. Roth   American Economic Review 2022, 112(3): 861–898   https://doi.org/10.1257/aer.20200751

Abstract: "Identifying high-growth microentrepreneurs in low-income countries remains a challenge due to a scarcity of verifiable information. With a cash grant experiment in India we demonstrate that community knowledge can help target high-growth microentrepreneurs; while the average marginal return to capital in our sample is 9.4 percent per month, microentrepreneurs reported in the top third of the community are estimated to have marginal returns to capital between 24 percent and 30 percent per month. Further we find evidence that community members distort their predictions when they can influence the distribution of resources. Finally, we demonstrate that simple mechanisms can realign incentives for truthful reporting."

"Not everyone has what it takes to be a successful entrepreneur. Numerous experimental studies of microentrepreneurs in the developing world find widely heterogeneous returns to cash and credit.1  Yet governments, lenders, and nongovernmental organizations often lack hard information with which to target resources to high-growth entrepreneurs.

...

"In this paper we argue that harnessing community information directly from a microentrepreneur’s peers may provide a viable approach to identifying high-growth microentrepreneurs.

"Our argument has three parts. First, we demonstrate that entrepreneurs in peri-urban Maharashtra have high quality information about one another along a variety of dimensions including marginal returns to capital. Their information is valuable for identifying high-growth microentrepreneurs even after controlling for a wide range of demographic and business characteristics. Second we demonstrate that entrepreneurs manipulate their reports to favor themselves, their friends, and their family when the distribution of resources is at stake. Finally we identify several simple techniques motivated by mechanism design that effectively realign incentives for accuracy.

...

"Our first main finding is that community members can identify high-return entrepreneurs. While the average marginal return to the grant was about 9.4 percent per month, our point estimates of the marginal returns to capital of entrepreneurs ranked in the top third range from 24 percent to 30 percent. Had we distributed our grants using community reports instead of random assignment, we would have roughly tripled the total return on our investment.

...

"Our second main finding is that strategic misreporting is a first-order concern when eliciting community information. By random assignment, half of respondents were told that their reports would be used only for research purposes (the “no stakes” treatment) and the other half were told that their reports would be used to allocate US$100 grants to members of their community (the “high stakes” treatment). The correlation between community reports and true outcomes is on average 27 percent to 35 percent lower when allocation of resources is at stake, which significantly lowers the value of peer elicitation.

...

"Our third main finding is that methods grounded in mechanism design theory can be used to design a peer-elicitation environment in which truth telling is incentive compatible. Monetary payments and public reporting do little to improve the accuracy of self-reports. But payments substantially increase the predictive power of reports that entrepreneurs make about other group members. We provide direct evidence that monetary payments reduce the likelihood that respondents favor their family members or their close friends. Finally, we find that public reporting increases the predictive accuracy of reports about others when there are no stakes, but has no effect in a high stakes setting. This nuanced finding may reflect a heterogeneous treatment effect, or a noisily estimated impact of observability on the quality of reports."

Monday, October 25, 2021

Crime and punishment (or not): Shoplifting in San Francisco

 In a criminal justice system in which incarceration sometimes seems to be the treatment of choice, it makes some sense to pay less attention to small crimes. But incentives matter, and so do small crimes (particularly small crimes that can be aggregated by organized gangs into profitable businesses...).

The WSJ has the story:

San Francisco Has Become a Shoplifter’s Paradise. Walgreens has closed 22 stores in the city, where thefts under $950 are effectively decriminalized. By Jason L. Riley

"The recent closings bring to 22 the number of stores that Walgreens has shut in the city since 2016. “Theft in Walgreens’ San Francisco stores is four times the average for stores elsewhere in the country, and the chain spends 35 times more on security guards in the city than elsewhere,” reported the San Francisco Chronicle.

...

"Much of this lawlessness can be linked to Proposition 47, a California ballot initiative passed in 2014, under which theft of less than $950 in goods is treated as a nonviolent misdemeanor and rarely prosecuted. Out of concern for safety and potential lawsuits, stores tell employees and security guards not to intervene when they witness a crime. Most suspects, if they are pursued at all by police, are soon released. Californians effectively decriminalized shoplifting. Not surprisingly, they have more of it."

Tuesday, July 20, 2021

Are incentives for vaccination coercive, exploitative, or otherwise unethical? Persad and Emanuel think not, in JAMA

 Many jurisdictions and venues are now offering incentives for people to be vaccinated against Covid-19.  It will not surprise the readers of this blog to learn that some people have found incentives for vaccination to be repugnant, and perhaps to be immoral and unethical coercion or exploitation.  Here's an article rebutting those concerns, in JAMA

Ethical Considerations of Offering Benefits to COVID-19 Vaccine Recipients  by Govind Persad, JD, PhD1; Ezekiel J. Emanuel, MD, PhD, JAMA. Published online July 1, 2021. doi:10.1001/jama.2021.11045

"Entry into a million-dollar lottery for getting vaccinated against COVID-19 is Ohio’s offer to adults. Teens who get vaccinated receive a lottery ticket for state college tuition, room, board, and more. Other states are offering gift cards. Now many employers are offering rewards for COVID-19 vaccination. Businesses ranging from Krispy Kreme and Sam Adams beer to the Cincinnati Reds have announced discounts or prizes for vaccinated individuals. Are these benefit programs ethical? Are they useful? Are they better than mandates?

...

"The ethical case for instituting vaccine benefit programs is justified by 2 widely recognized values: (1) reducing overall harm from COVID-19 and (2) protecting disadvantaged individuals.1 If benefit programs increase vaccine uptake, they directly protect recipients. By reducing transmission, increased uptake also protects the population, including ineligible children and adults, unvaccinated adults, and individuals with conditions reducing vaccine efficacy (Table). Because transmission has been higher and outcomes worse in less-advantaged communities, stemming transmission especially protects those in disadvantaged communities. In addition, costs, such as time off work for getting a vaccine or dealing with vaccine-related adverse effects, finding daycare for children, and transportation to a vaccine site, hamper access for poorer and marginalized people. Benefit programs, especially in the form of guaranteed cash payments, could improve access and increase uptake by offsetting these costs."





Sunday, July 18, 2021

Experiments touching on market design in the July AER

 The July AER has a number of experiments that speak to market design:

 Online,

How to Avoid Black Markets for Appointments with Online Booking Systems  By Rustamdjan Hakimov, C.-Philipp Heller, Dorothea Kübler, and Morimitsu Kurino*

Abstract: Allocating appointment slots is presented as a new application for market design. Online booking systems are commonly used by public authorities to allocate appointments for visa interviews, driver’s licenses, passport renewals, etc. We document that black markets for appointments have developed in many parts of the world. Scalpers book the appointments that are offered for free and sell the slots to appointment seekers. We model the existing first-come-first-served booking system and propose an alternative batch system. The batch system collects applications for slots over a certain time period and then randomly allocates slots to applicants. The theory predicts and lab experiments confirm that scalpers profitably book and sell slots under the current system with sufficiently high demand, but that they are not active in the proposed batch system. We discuss practical issues for the implementation of the batch system and its applicability to other markets with scalping.

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In rural Malawi,

Pay Me Later: Savings Constraints and the Demand for Deferred Payments  By Lasse Brune, Eric Chyn, and Jason Kerwin*

Abrstract: We study a simple savings scheme that allows workers to defer receipt of part of their wages for three months at zero interest. The scheme significantly increases savings during the deferral period, leading to higher postdisbursement spending on lumpy goods. Two years later, after two additional rounds of the savings scheme, we find that treated workers have made permanent improvements to their homes. The popularity of the scheme implies a lack of good alternative savings options. The results of a follow-up experiment suggest that demand for the scheme is partly due to its ability to address self-control issues.

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In Rwanda,

Recruitment, Effort, and Retention Effects of Performance Contracts for Civil Servants: Experimental Evidence from Rwandan Primary Schools  by Clare Leaver, Owen Ozier, Pieter Serneels and Andrew Zeitlin

Abstract: This paper reports on a two-tiered experiment designed to separately identify the selection and effort margins of pay for performance (P4P). At the recruitment stage, teacher labor markets were randomly assigned to a "pay-for-percentile" or fixed-wage contract. Once recruits were placed, an unexpected, incentive-compatible, school-level re-randomization was performed so that some teachers who applied for a fixed-wage contract ended up being paid by P4P, and vice versa. By the second year of the study, the within-year effort effect of P4P was 0.16 standard deviations of pupil learning, with the total effect rising to 0.20 standard deviations after allowing for selection. 

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and in India,

On Her Own Account: How Strengthening Women's Financial Control Impacts Labor Supply and Gender Norms  By Erica Field, Rohini Pande, Natalia Rigol, Simone Schaner and Charity Troyer Moore

Abstract: Can increasing control over earnings incentivize a woman to work, and thereby influence norms around gender roles? We randomly varied whether rural Indian women received bank accounts, training in account use, and direct deposit of public sector wages into their own (versus husbands') accounts. Relative to the accounts only group, women who also received direct deposit and training worked more in public and private sector jobs. The private sector result suggests gender norms initially constrained female employment. Three years later, direct deposit and training broadly liberalized women's own work-related norms, and shifted perceptions of community norms. 

Saturday, June 26, 2021

Covid and COVAX, lessons being learned for the next pandemic

 From the Lancet:

A beautiful idea: how COVAX has fallen short by Ann Danaiya Usher, June 19, 2021DOI:https://doi.org/10.1016/S0140-6736(21)01367-2

"At the pledging summit for COVAX on June 2, 2021, hosted by Japan, Gavi finally reached its US$8·3 billion ask for the procurement and delivery of vaccines for the 92 eligible low-income and middle-income countries (LMICs) this year. However, even with full financing, the COVAX roll-out has moved much more slowly than that in high-income countries (HICs). Speaker after speaker at the summit lamented the gross inequity in access to vaccines. “Today, ten countries have administered 75% of all COVID-19 vaccines, but, in poor countries, health workers and people with underlying conditions cannot access them. This is not only manifestly unjust, it is also self-defeating”, UN secretary general António Guterres told the gathering. “COVAX has delivered over 72 million doses to 125 countries. But that is far less than 172 million it should have delivered by now.” Of the 2·1 billion COVID-19 vaccine doses administered worldwide so far, COVAX has been responsible for less than 4%.

...

"COVAX, managed by Gavi, along with the Coalition for Epidemic Preparedness Innovations and WHO, was designed to stand on two legs: one for HICs, which would pay for their own vaccines, and the other for 92 lower-income countries, whose doses would be financed by donor aid.

"In the so-called self-financing leg of COVAX, HICs were asked to pay upfront by mid-September, 2020, for the option to buy vaccines for their own populations. The UK, for example, paid £71 million for 27 million doses from COVAX, and Canada paid CA$220 million for 15 million doses. Australia, New Zealand, Norway, and South Korea also bought vaccine options from COVAX as self-financing countries.

"In the other leg of COVAX, vaccines for lower-income countries would be financed with donor grants through an Advance Market Commitment (AMC). The poorest of the 92 countries would receive them at no cost. Team Europe (led by Germany) and the USA have together provided US$5 billion to the COVAX AMC, Japan has given US$1 billion, and the UK, US$735 million. Most of these funds have been pledged only in the past few months.

"The grand idea of COVAX was that the combination of these two funding streams—the self-financed part and the aid-financed AMC—would give the facility the means to invest in research and development of several promising vaccine candidates. Additionally, as a pooled procurement mechanism, COVAX would have the financial muscle as a buyer to drive down prices for all participants. Once any of the COVAX portfolio vaccines had successfully undergone clinical trials and proved themselves to be both safe and effective, both self-financing and AMC countries would be allocated vaccines at the same rate, proportional to their total population size.

...

"Everyone knew that rich countries would enter into bilateral vaccine deals, Yamey said. But it was hoped that they would also buy into COVAX as insurance in case some vaccine candidates did not prove successful. Most of them did not. In the end, “three dozen countries bypassed COVAX and made huge deals directly with manufacturers. They were very lucky that the vaccines worked out. And since they cleared the shelves, there were not enough doses left for COVAX”, he said.

...

"The report of the Independent Panel for Pandemic Preparedness and Response also pointed to the harm caused by the slow mobilisation of resources for COVAX: “Had COVAX had sufficient and readily available early funding it would have been better able to secure enough immediate supply to meet its aims”, it states.

...

"The original notion of a global vaccine hub more or less collapsed, and COVAX ended up using a traditional aid-financed approach, which has left lower-income countries wholly at the mercy of wealthy nations and profit-driven companies.

“It is still this model of seeing how much money you can bring in and then seeing what you can negotiate with industry based on that money”, said Elder. “The promise of COVAX from the beginning that it would be the most attractive buyer for industry because it represented the ‘global need’ obviously did not pan out.” For any future iterations of COVAX, Taylor has argued that since national leaders have a responsibility to protect their own populations, vaccine nationalism is inevitable and this should be integrated into the design from the start.

"Several global health experts point to the failure to recognise supply constraints as a major obstacle to global vaccination and emphasise diversifying and scaling up manufacturing from the beginning. This lack of recognition was a serious flaw in the COVAX design, said Gostin. “Supply shortages should have been anticipated and ramping up supplies should have been baked into the design of COVAX from the start.

Monday, June 14, 2021

Repugnance to high incentives, by Robert Stüber

Here's a paper that seeks to understand why some transactions are permitted when only low incentives are offered, but banned when high incentives are offered. (Donation of human eggs is one example; high payments to participate in experiments is another...)

WHY HIGH INCENTIVES CAUSE REPUGNANCE: A FRAMED FIELD EXPERIMENT* by Robert Stüber

WZB Berlin March 2021

Abstract: A key feature of markets for repugnant transactions is that certain transactions seem to raise moral concerns only when they involve high monetary incentives. Using a framed field experiment with a representative sample, I show that these preferences exist, and I investigate why people display it. Participants can permit or prevent a third party from being financially compensated for registering as a stem cell and bone marrow donor. I find that a substantial fraction of individuals permit a low payment but prevent high monetary incentives. With the help of experimental treatment variation, I show that their preference to prevent high incentive offers is caused by the desire to protect individuals with high reservation prices. Evidence from a survey experiment with ethic committees emphasizes the practical importance of this finding. These results imply that shortages in the supply of controversial goods are unlikely to be solvable by providing higher incentives. 

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Here's a short video presentation of (an early version of) the paper by Dr Stüber.  I understand that he will be moving from the WZP to NYU Abu Dhabi in September.