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Remedying adverse selection in donor-priority rule using freeze period: Theory and experiment

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  • Li, Mengling
  • Riyanto, Yohanes E.
  • Xu, Menghan

Abstract

Improving the deceased organ donation is the key to alleviate organ shortages. We compare the aggregate donation incentive and social welfare under different organ allocation mechanisms theoretically and test the predictions in the laboratory. While boosting the aggregate donation rate, the donor-priority rule brings an unwanted impact by attracting more donations from agents with a higher risk of organ failure. This compromises the average quality of organ supply and decreases social welfare. We show that by augmenting the donor-priority rule with a freeze period, which delays the effective starting time of the priority benefit, it improves the aggregate donation rate without reducing social welfare.

Suggested Citation

  • Li, Mengling & Riyanto, Yohanes E. & Xu, Menghan, 2022. "Remedying adverse selection in donor-priority rule using freeze period: Theory and experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 384-407.
    • Handle: RePEc:eee:jeborg:v:194:y:2022:i:c:p:384-407
    DOI: 10.1016/j.jebo.2021.12.021
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    More about this item

    Keywords

    Organ donation; Priority rule; Laboratory experiment; Public policy; Health economics;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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