We’re designing a better market for innovation; one that matches those with ideas that can revolutionise markets and sectors with those who have the means to do so. With a fascination for market design, we draw our inspiration from the likes of Alvin Roth. Today we want to share some of his work as it continues to influence us here at WiderPool.A market for saving lives
Most people would, if given the opportunity, do anything to save the life of a loved one. But, as Alvin E. Roth and his collaborators (Gale and Shapley) noted, sometimes it is simply out of our hands. In the case of kidney transplants they didn’t feel it needed to be. Designing a solution for this, for which he would later win the Nobel Prize, his kidney exchange model not only saves lives, but does so in a sustainable way.
In his research he noted many spouses were willing to donate a kidney to their other half but couldn’t do so. For one reason or another they were incompatible donors. These people, scattered across the whole country, were sent home by hospitals, their family member added to the bottom of a never-ending list of people awaiting kidney donors. Some found them eventually, others did not. But not because there was a shortage of kidneys; as demonstrated, most patients had someone desperate to help, but who couldn’t. Rather, the problem was people had no way of finding each other.
Why so? Well, except for Iran, no country allows the trade of kidneys. That means that the concept of a marketplace for organs cannot be considered. (A marketplace not considered? In the USA?) And yet there were so many potential participants – over 100,000 people in the US alone are waiting a kidney transplant. Many more are willing to donate to save a loved one but unable to. Enough participants, they thought, to provide the thickness needed for an efficient market.
And it did, albeit with momentous effort on the part of the hospitals. They had to re-register willing donors and collect all the information that was needed to ascertain compatibility. Information that was otherwise not recorded permanently. Even more challenging, they had to perform all transplants involved in an exchange simultaneously; US law could not sanction the future promise of a kidney donation. Four operating theatres and four teams were required at the same time to allow the exchange between two couples. Six theatres if the chain required three couples, and so on. It was a gargantuan effort. But it worked. Legislation is now catching up, allowing the market to perform more efficiently.
With perseverance and the help of the medical profession, Alvin E. Roth was able to design and establish a market for the exchange of kidneys between donor pairs – one couple who were not compatible could find and exchange with another in the same situation. He showed us, in an era of popular mistrust in free-market capitalism, that markets, when designed correctly, can improve the lives of everyone not just the few.
Matching innovators with big businesses
We’ve been hugely inspired by Alvin E. Roth’s thinking, and this has influenced how we think about our own model. We don’t claim to be saving lives at WiderPool, but we do believe there are plenty of people who have innovations that could. We are trying to match them with businesses that are compatible. There’s already a market for investment – countless start-ups, and countless people willing to invest – but the market lacks design. There are far too many incompatible matches and that means too many great ideas fail to fulfil their potential. We, like the hospitals, gather the information, assess the compatibility, and make the connections. We seek to create symbiotic relationships that allow both big businesses and smaller innovators to flourish together.
We’re matching donors of capital with donors of disruptive ideas.
We’re designing a better market for innovation.
UBS Nobel Perspectives – an excellent series of interviews with Nobel Laureates by UBS. This website allows you explore engaging content from Alvin E. Roth and a host of other incredible brains.
Who gets what – and why: The hidden world of matchmaking and market design. – Alvin E Roth’s own book. Well worth a read if you love problem solving…or maths!