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Blood Allocation with Replacement Donors: A Theory of Multi-unit Exchange with Compatibility-based Preferences

Author

Listed:
  • Xiang Han

    (Shanghai University of Finance and Economics)

  • Onur Kesten

    (University of Sydney)

  • M. Utku Ünver

    (Boston College)

Abstract

In 56 developing and developed countries, blood component donations by volunteer non-remunerated donors can only meet less than 50% of the demand. In these countries, blood banks rely on replacement donor programs that provide blood to patients in return for donations made by their relatives or friends. These programs appear to be disorganized, non-transparent, and inefficient. We introduce the design of replacement donor programs and blood allocation schemes as a new application of market design. We introduce optimal blood allocation mechanisms that accommodate fairness, efficiency, and other allocation objectives, together with endogenous exchange rates between received and donated blood units beyond the classical one-for-one exchange. Additionally, the mechanisms provide correct incentives for the patients to bring forward as many replacement donors as possible. This framework and the mechanism class also apply to general applications of multi-unit exchange of indivisible goods with compatibility-based preferences beyond blood allocation with different information problems.

Suggested Citation

  • Xiang Han & Onur Kesten & M. Utku Ünver, 2021. "Blood Allocation with Replacement Donors: A Theory of Multi-unit Exchange with Compatibility-based Preferences," Boston College Working Papers in Economics 1038, Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:1038
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    References listed on IDEAS

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    More about this item

    Keywords

    Blood transfusion; market design; multi-unit exchange; dichotomous preferences; endogenous pricing;
    All these keywords.

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • I19 - Health, Education, and Welfare - - Health - - - Other
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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