Market Design for Altruistic Supply: Evidence from the Lab

46 Pages Posted: 18 Jan 2016

See all articles by Robert Slonim

Robert Slonim

The University of Sydney; IZA Institute of Labor Economics

Carmen Wang

Harvard University - Department of Economics; HBS Negotiations, Organizations and Markets Unit

Multiple version iconThere are 2 versions of this paper

Abstract

Volunteer supply is widespread, yet without a price inefficiencies occur due to suppliers' inability to coordinate with each other and with demand. For these contexts, we propose a market clearinghouse mechanism that improves efficiency if supply is altruistically provided. The mechanism, a registry, combines aggregate demand information with supplier's willingness to help, and invites volunteers to help only when excess demand occurs. We experimentally study three registries that include stochastic high-stakes demand and heterogeneous supplier costs. We find that all three registries improve efficiency dramatically; they eliminate unneeded costly help when demand is unexpectedly low and significantly increase supply (reduce shortages) otherwise. Further, two registries that invite exactly one registry member to help for each person needing help, rather than the third registry that continues asking members to help until someone helps, result in fewer people joining the registry, but those who join are more likely to help.

Keywords: market design, laboratory experiments, volunteering, public goods provision

JEL Classification: D47, D64, C93

Suggested Citation

Slonim, Robert and Wang, Carmen, Market Design for Altruistic Supply: Evidence from the Lab. IZA Discussion Paper No. 9650. Available at SSRN: https://ssrn.com/abstract=2716591

Robert Slonim (Contact Author)

The University of Sydney ( email )

University of Sydney
Sydney, NC NSW 2006
Australia

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Carmen Wang

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

HBS Negotiations, Organizations and Markets Unit ( email )

Soldiers Field
Boston, MA 02163
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
25
Abstract Views
260
PlumX Metrics