We conduct a lab experiment that shows that current rules regulating transplant centers (TCs) and organ-procurement organizations (OPOs) create perverse incentives that inefficiently reduce both organ recovery and beneficial transplantations. We model the decision environment with a two-player multiround game between an OPO and a TC. In the condition that simulates current rules, OPOs recover only the highest-quality kidneys and forgo valuable recovery opportunities, and TCs decline some beneficial transplants. Alternative regulations that reward TCs and OPOs together for health outcomes in their entire patient pool lead to behaviors that increase organ recovery and appropriate transplants.

The entry‐level market for American gastroenterologists was organized by a centralized clearinghouse from 1986 to 1996. Before, and since, it has been conducted via a decentralized market in which appointment dates have unraveled to well over a year before the start of employment. We find that, both before and after the years in which the centralized clearinghouse was used, gastroenterologists are less mobile and more likely to be employed at the same hospital in which they were internal medicine residents than when the clearinghouse was in use. This suggests that the clearinghouse not only coordinates the timing of appointments but also increases the scope of the market, compared to a decentralized market with early appointments.

EMPIRICAL STUDIES OF TWO SIDED MATCHING have so far concentrated on markets in which certain kinds of market failures were addressed by resorting to centralized, deterministic matching procedures. Loosely speaking, the results of these studies are that those centralized procedures which achieved stable outcomes resolved the market failures, while those markets organized through procedures that yielded unstable outcomes continued to fail.2 So the market failures seem to be associated with instability of the outcomes. But many entry-level labor markets and other two-sided matching situations don't employ centralized matching procedures, and yet aren't observed to experience such failures. So we can conjecture that at least some of these markets may reach stable outcomes by means of decentralized decision making. And decentralized decision making in complex environments presumably introduces some randomness into what matchings are achieved. However, as far as we are aware, no nondeterministic models leading to stable outcomes have yet been studied. The present paper demonstrates that, starting from an arbitrary matching, the process of allowing randomly chosen blocking pairs to match will converge to a stable matching with probability one. (This resolves an open question raised by Knuth (1976), who showed that such a process may cycle.) Furthermore, every stable matching can arise

Organs for transplantation are a scarce resource. Paying to increase the supply of organs is illegal in much of the world. We review efforts to increase transplantation by increasing the supply of available organs from living and deceased donors. Progress has been made in increasing the availability of living donor kidneys through kidney exchange. Recent legislation in Israel aims at encouraging deceased donation by awarding priority for receiving organs to registered donors. We also explore the manner in which organ donation is solicited and present evidence to suggest that some recent movement towards 'mandated choice' may be counterproductive.

Organ donations from deceased donors provide the majority of transplanted organs in the United States, and one deceased donor can save numerous lives by providing multiple organs. Nevertheless, most Americans are not registered organ donors despite the relative ease of becoming one. We study in the laboratory an experimental game modeled on the decision to register as an organ donor and investigate how changes in the management of organ waiting lists might impact donations. We find that an organ allocation policy giving priority on waiting lists to those who previously registered as donors has a significant positive impact on registration.

In his recent paper in this Review, Glenn Harrison (1989) argues that the conclusions of James Cox et al. (1982, 1983, 1985, 1988) in their studies of first-price private-value auctions are not well supported, because of shortcomings in the way their experimental investigations were designed, analyzed, and reported. Harrison argues that the expected cost of deviations from risk-neutral Nash equilibrium (RNNE) bidding in these auctions was quite small (less than $0.05 at the median), so that in terms of expected monetary payoffs (payoff space) many subjects had little to lose from deviating from the RNNE strategy. Harrison suggests that the significance of the differences Cox, Vernon Smith, and James Walker (hereafter CSW) report between subjects' bids and the RNNE bids (deviations in the message space) may therefore need to be reexamined. In discussing Harrison versus CSW we have three primary points to make.' First, in arguing that it is more natural to evaluate subject behavior in expected payoff space (Harrison, 1989 p. 749), we think Harrison has overstated his case. However, we agree with his more important point that looking at the cost of deviations is a useful diagnostic tool for determining when experimenters are likely to have lost control over subjects' incentives. Further, as we will show in Section I, this part of Harrison's critique applies with special force to CSW's studies of bidding. Second, a broader examination of the results of private-value auction experiments indicates that risk aversion cannot be the only factor and may well not be the most important factor behind bidding above the RNNE found so often in first-price privatevalue auctions. The most telling evidence here is bidding above the dominant bid price found in second-price auctions (Kagel et al., 1987; Kagel and Levin, 1990) and the risk-loving found under several treatment conditions in CSW's (1984) own multipleunit discriminative auctions (auctions in which the high bidders pay their bid price). These and other data inconsistent with risk-averse bidding are largely ignored in CSW (1988) but are nevertheless relevant to the substantive issue of risk aversion in private-value auctions. They are discussed in Section II. Third, there are data gathered in other investigations which provide strong support for the view that the deviations from RNNE bidding reported in first-price auctions are not the results of the low expected cost of such deviations. However, these data, unlike the higher-stakes payoff data that CSW offer in response to Harrison, are not consistent with CSW's subsidiary conclusions that the data can be well accounted for by a narrow class of risk-aversion parameters for the bidders, together with the assumption that all agents are playing a Nash equilibrium of the resulting game of incomplete information. A key difference between these experiments and CSW's is that if subjects do not respond to CSW's treatment condition (increasing the payoffs from experimental to U.S. dollars) their behavior will be consistent with CSW's theory. In contrast, * Department of Economics, University of Pittsburgh, Pittsburgh, PA 15260. We thank Jack Ochs and Emilie Roth for thoughtful discussions on earlier drafts of the paper, Jim Cox and Glenn Harrison for helpful comments on the initial draft of the paper, Susan Garvin for research assistance, and Ray Battalio, Carl Kogut, and Don Meyer for providing us with access to their data. Research support was provided by the Information Science and Technology and Economics divisions of the National Science Foundation, the Alfred P. Sloan Foundation, and the Russell Sage Foundation. The usual caveat applies with special force. IWe do not respond to specific comments that CSW (1992) make in response to our comment as, in order to avoid indefinite regress, the ground rules for this debate required us to comment on CSW's criticism of Harrison, after which they would be given the opportunity to respond to our comment.

The Collapse of a Medical Labor Clearinghouse (and Why Such Failures Are Rare) by C. Nicholas McKinney, Muriel Niederle and Alvin E. Roth. Published in volume 95, issue 3, pages 878-889 of American Economic Review, June 2005

Accommodating couples has been a long-standing issue in the design of centralized labor market clearinghouses for doctors and psychologists, because couples view pairs of jobs as complements. A stable matching may not exist when couples are present. This article’s main result is that a stable matching exists when there are relatively few couples and preference lists are sufficiently short relative to market size. We also discuss incentives in markets with couples. We relate these theoretical results to the job market for psychologists, in which stable matchings exist for all years of the data, despite the presence of couples.

IRBs can disallow high incentives they deem coercive. A vignette study on MTurk concerning participation in medical trials shows that a substantial minority of subjects concurs. They think high incentives cause more regret, and that more people would be better off without the opportunity to participate. We model observers as judging the ethicality of incentives by partially using their own utility. The model predicts that payments are repugnant only to the extent that they affect the participation decision, and more so for larger transactions. Incentivizing poorer participants is more repugnant, and in-kind incentives are less repugnant than monetary incentives.

The design of the New York City (NYC) high school match involved trade-offs among efficiency, stability, and strategy-proofness that raise new theoretical questions. We analyze a model with indifferences—ties—in school preferences. Simulations with field data and the theory favor breaking indifferences the same way at every school—single tiebreaking—in a student-proposing deferred acceptance mechanism. Any inefficiency associated with a realized tiebreaking cannot be removed without harming student incentives. Finally, we empirically document the extent of potential efficiency loss associated with strategy-proofness and stability, and direct attention to some open questions.