Market Design for Altruistic Supply: Evidence from the Lab

50 Pages Posted: 27 Mar 2016

See all articles by Robert Slonim

Robert Slonim

The University of Sydney; IZA Institute of Labor Economics

Carmen Wang

Harvard Business School

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Date Written: March 25, 2016

Abstract

Volunteer supply is widespread. Yet without a price, inefficiencies occur due to suppliers’ inability to coordinate with each other and with demand. In 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 suppliers’ willingness to help, and invites volunteers to help only when excess demand occurs. We experimentally study three registries with stochastic high-stake 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 during shortages.

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 (March 25, 2016). Harvard Business School Research Paper Series No. 16-112. Available at SSRN: https://ssrn.com/abstract=2754735 or http://dx.doi.org/10.2139/ssrn.2754735

Robert Slonim

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 (Contact Author)

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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