The Opposite of Repugnance

Al Roth is a truly interesting economic thinker, with an emphasis on what has come to be known as market design. He has created systems that help new doctors find an appropriate residency, that help students find an appropriate high school, and that help people dying of kidney failure find a new kidney.

None of these results would have been possible without a keen understanding of game theory; his solutions are market-based but also highly cognizant of strategic intent, psychology, and even mood.

We touched on Roth's work in a column we wrote a while back about the possibility of a market for human organs. One big hurdle in establishing such a market is what Roth calls the repugnance factor. For a variety of reasons, the idea of buying and selling human organs is one that people find repugnant -- at least at this point in time, and in our country but not in every country.

What is interesting about repugnance is how it shifts over time. My favorite example is life insurance. Until the mid-19th century, this concept was widely held to be repugnant -- it meant placing a bet, after all, on the untimely death of a loved one. As the sociologist Viviana Zelizer has written, people thought that life insurance "transformed the sacred event of death into a vulgar commodity."

That, of course, has changed. So have many other onetime repugnancies.

Now, on his Market Design blog, Al Roth writes about something that's perhaps even more interesting: the opposite of repugnance. Or, as he puts it, "transactions that, as a society, we often seek to promote, for reasons other than efficiency or pure political expediency."

Here are the items he lists:

+ Monogamous marriage between a man and a woman
+ Home ownership in the U.S.
+ Food production by small farmers
+ Fishing by small fishing boats
+ The right to purchase guns

His readers chime in with a few more ideas:

+ Donating to charity
+ Education
+ Hiring the disabled, veterans, ex-cons, and other members of "historically underrepresented groups."

I am surprised nobody claimed "universal health care."

I would encourage you to add Roth's blog to your reading list; if more people thought like Roth does the world would be a considerably more rational place.

More Good News

Just before Christmas, I reported that the CBOE

What to Do for an Encore? My Preakness Picks

There is likely no prediction I can make for the Preakness that will generate as much entertainment value as my ill-fated Kentucky Derby picks.

But here goes anyway.

More or less, my system says to just bet against the favorite, and only filly, in the race, Rachel Alexandra.


The horse my computer program likes best in terms of betting value, believe it or not, is longshot Flying Private. I also liked that horse in the Kentucky Derby, and he rewarded my faith by finishing dead last, more than 40 lengths behind the winner. Based on that disastrous run, he will likely go off at huge odds.

There are a handful of horses that my system more or less likes. These are the horses, along with Flying Private, I will build a superfecta ticket around: Musket Man, Papa Clem, General Quarters, PioneeroftheNile, Friesan Fire, and Mine that Bird.

Essentially, though, these are all the major contenders,
minus the favorite. So basically I am just betting against
the favorite.

The most important piece of information, however, given my
past history, is the fact that there is one horse that stands
out as by far the worst in the field: Luv Gov.

The Importance of Sample Size, Swine Flu Edition

What made swine flu so worrisome was the high death toll it wrought in Mexico. Most of us assumed that the virus would be at least as lethal wherever it spread. It wasn't. With the virus temporarily in retreat, current estimates show all but one of the swine flu deaths were confined to Mexico, and all but a few of those were in Mexico City. Why? Rampant poverty, for one, which kept many in Mexico who contracted swine flu from going to the doctor until it was too late. Swine flu isn't much more dangerous than seasonal flu, it just struck a particularly vulnerable population. That didn't prevent a public panic, of course: the Mexican economy could lose as much as $5 billion before tourism and economic activity recovers.