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Dynamic Incentives in Wait List Mechanisms

Author

Listed:
  • Nikhil Agarwal
  • Itai Ashlagi
  • Paulo Somaini
  • Daniel Waldinger

Abstract

Many scarce public resources are allocated through wait lists that use priorities for individual agents. A new priority system for allocating deceased donor kidneys was adopted in 2014. This redesign was guided by simulations that held decision-rules fixed. We synthesize recent theoretical results to show that the welfare effects of a mechanism depend on the interaction between dynamic incentives and heterogeneity in preferences. We show evidence suggesting that patient decisions on the deceased donor kidney wait list respond to dynamic incentives. Therefore, an empirical approach to dynamic mechanism design is an essential complement to mechanism design theory in dynamic environments.

Suggested Citation

  • Nikhil Agarwal & Itai Ashlagi & Paulo Somaini & Daniel Waldinger, 2018. "Dynamic Incentives in Wait List Mechanisms," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 341-347, May.
    • Handle: RePEc:aea:apandp:v:108:y:2018:p:341-47
    Note: DOI: 10.1257/pandp.20181079
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    Cited by:

    1. Nikhil Agarwal & Itai Ashlagi & Michael A. Rees & Paulo Somaini & Daniel Waldinger, 2021. "Equilibrium Allocations Under Alternative Waitlist Designs: Evidence From Deceased Donor Kidneys," Econometrica, Econometric Society, vol. 89(1), pages 37-76, January.
    2. Nikhil Agarwal & Itai Ashlagi & Michael A. Rees & Paulo J. Somaini & Daniel C. Waldinger, 2019. "Equilibrium Allocations under Alternative Waitlist Designs: Evidence from Deceased Donor Kidneys," NBER Working Papers 25607, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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