Why Doing the “Right Thing” Can Make Everything Worse (#316)

3 Takeaways™

Alvin Roth, Nobel laureate and Stanford professor, discusses how redesigning systems—rather than changing human behavior—can lead to life-sa

Key takeaways

Changing systems through better rules is more effective than trying to change human nature.

Main topics

Kidney exchange systems
Market design and game theory

Notable quotes

To work well, markets need social support.

Conclusion

The episode underscores that effective solutions often come from rethinking systems rather

Transcript preview

Speaker 1 (0:01) What if one small change could save thousands of lives? Hi, everyone. I'm Lynn Thoman, and this is Three Takeaways. On Three Takeaways, I talk with some of the world's best thinkers, business leaders, writers, politicians, newsmakers, and scientists. Each episode ends with three key takeaways to help us understand the world and maybe even ourselves a little better. Speaker 1 (0:30) Today, I'm delighted to be with Alvin Roth. Al received the Nobel Prize for work that has helped save thousands of lives through kidney exchange. He's a professor at Stanford, and his latest work and new book, Moral Economics, explores some of society's hardest questions. When should we ban something? When should we regulate it? And when do the rules themselves become the problem? Al, welcome to Three Takeaways. Speaker 2 (1:01) Thank you. Speaker 1 (1:02) It is my pleasure to have you as a guest. There were two families, each desperately wanted to save someone they loved. Each had a willing kidney donor, and yet neither transplant could happen. And then you realize something that changed thousands of lives. Tell us that story. Speaker 2 (1:23) If someone you know has kidney failure, which is fatal, it's possible to give someone you love a kidney because healthy people have two kidneys and can remain healthy with one. But kidneys have to be well-matched to the patient. So you might be healthy enough to give someone a kidney and willing and ready to do so, but you can't give a kidney to the person you love because your kidney doesn't match them. Kidney exchange, in its simplest form, would have me give a kidney to your patient and you give a kidney to my patient so that each patient can get a compatible kidney, a well-matched kidney from another patient's intended donor. And that's a simple idea that was floating around for a while. But only in the year 2000 did an American hospital do the first United States kidney exchange. And after that, my colleagues and I helped figure out ways to scale that up so it could involved lots of hospitals all around the country and big chains of exchanges. Speaker 1 (2:21) So phenomenal. So you didn't invent a new way of treating patients with kidney failure. You essentially redesigned the system. Speaker 2 (2:31) Yes. Speaker 1 (2:32) Close to a million Americans and even more around the world suffer from kidney failure. Many are waiting for a kidney transplant and thousands or tens of thousands die every year. Why aren't there enough kidneys for transplant? Speaker 2 (2:48) Well, that's Speaker 1 (2:49) a Speaker 2 (2:49) good question. There are 130,000 new cases of kidney failure each year in the United States, but we only do 30,000 transplants. And in the US, that's due to the real shortage of kidneys. And when economists see long lines of people, you know, there's almost 100,000 people on the waiting list to receive a deceased donor kidney. When we see long lines of people waiting for scarce resources, we suspect that Prices aren't being used to increase the supply. And indeed, that's the case. It's against the law almost everywhere in the world to pay a kidney donor for a kidney. So there aren't as many as there could be. Speaker 1 (3:27) One thing that strikes me about your work is that you don't try to change people. You change the rules. Is that the real lesson? Well, Speaker 2 (3:37) rules are important. I'm a market designer. That's the name that's been attached to the kind of... economics, my colleagues and I do now. But market design grows out of game theory, the mathematics of rules and how they affect behavior and how they determine