1. How Economists Save Lives
Andrei Bremzen, New Economic School
February 15, 2014

2. What Is Economics?
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Many believe it is boring
Compared to other social sciences (history,
psychology, etc.)
That those who study economics do so
exclusively for earning prospects
That economics is all about accounting,
securities trading, business planning…
BUT THIS IS BIASED AND MISLEADING!

3. What is Economics?
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In fact, economists do much more than that
In (academic) economics there is beautiful
and fancy math, intriguing history, even
quantum physics, and more
Not least, huge potential for self realization,
including serving people with your talent
Including by directly saving people’s lives

4. What is Market Design?
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Relatively new field
Builds on progress in mathematics
(mostly game theory) to design rules to
trade items never traded before
Trading may or may not involve money!
Because of liquidity or repugnancy
constraints monetary exchange may not
work

5. Theory: two-sided matchings
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Gale-Shapley (1962) paper
Deferred acceptance algorithm
Outcome in the core
Unique for two sidedness
With desirable strategic properties
What is better: to be a man or a woman?

6. Application: Kidney Exchange
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First successful transplant 1954
Need blood and tissue types to match
95-98% success rate
First three-pair exchange: 2003
NEPKE, founded 2005 (nepke.org)
Six-pair exchange: 2008
60 people in Non-directed chain: 2011

7. Alvin Roth at a Hospital

8. Conclusions
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Buying and selling donor organs is illegal
(why?), and we do not advocate this.
But there is still scope for trading to
mutual advantage
Economists help design markets, even
under unusual constraints
ECONOMICS IS FUN!

9. References
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Nobel.se for releases on 2012 Nobel in
economics (to Lloyd Shapley and Al Roth)
Marketdesigner.blogspot.com for Al’s blog
Gregmankiw.blogspot.com for blogging
on economics an links to other resources