Sunday, 18 December 2016

Kidneys and ultimatum game

Frequently in life there is some good available, which would be an increase in total welfare, if you and I can agree on some split of that good between us. If we cannot agree the good never comes into existence and there is no increase in total welfare. This fact can be modelled by what is called the ultimatum game. In the ultimatum game somebody offers us £100 to split between us just in case we agree on the split. The rule is that I get to propose to you a split and you can accept it or reject it. So if you reject it we both get nothing. Since you are better off whatever positive offer I make, it looks as if it is rational to accept even as little as £1. 

When the game has been run as an experiment it has been found that people prefer to get nothing rather than accept low offers. Furthermore, offers that are much less than £30 are widely thought to be unfair and making very low offers is thought to be morally wrong. So a principle that seems to be being applied is that in such situations I am morally required to make an offer that divides the good roughly equally—perhaps somewhat to my benefit, perhaps as much  £70 to me and £30 to you—and morally forbidden from offering you a very low proportion. Good. If that is right then kidney recipients are morally required to offer kidney donors roughly half the good of receiving a kidney, and the law against the market in kidneys is morally forbidden and must therefore be repealed.

OK, how do I get there. Very simply. Suppose I need a kidney and will die without it. Your spare kidney is more valuable in my body than in yours, and the difference in that is the good to divide between us. You have the veto, that is to say, I can propose a split of that good between us and if you are unhappy with it you can reject it. Here is my proposal: you undergo the pain and suffering of the operation to remove your kidney and I get the kidney. 

How does that look in the ultimatum game model? The extra value of the kidney in my body is the extra life I get, say £10,100,  less the cost in pain and suffering to you, say £1,00 = £10,000.  I propose that we split the £10,000 like this: you give me £100 and I take all £10,000 as well. Wait, come back! Only kidding. I’ll pay you £200. Surely that’s fair? Not if people are right about the ultimatum game. Paying you £200 is splitting the good £99 to me for each £1 for you. The principle that I must make an offer that divides the good roughly equally allows me only to favour myself to the exent of offering you £3,100. 

I am not proposing that these prices are realistic. The real prices would have to be discovered in a market and in a free market the surplus good gets divided in in a manner agreeable to both sides of a trade. My point is this: The law against the market in kidneys forces kidney recipients to make unfair offer to donors, offers that are morally forbidden by a principle we seem to accept. No surprise, then, that we have a shortage of kidneys. The law must be repealed.

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