Jumping the Line, Charitably: Analysis and Remedy of Donor-Priority Rule

Management Science, Forthcoming

50 Pages Posted: 6 Dec 2018

See all articles by Tinglong Dai

Tinglong Dai

Johns Hopkins University - Carey Business School

Ronghuo Zheng

University of Texas at Austin - McCombs School of Business

Katia Sycara

Carnegie Mellon University - School of Computer Science

Date Written: November 25, 2018

Abstract

The ongoing shortage of organs for transplantation has generated an expanding literature on efficient and equitable allocation of the donated cadaveric organs. By contrast, organ donation has been little explored. In this paper, we develop a parsimonious model of organ donation to analyze the welfare consequences of introducing the donor-priority rule, which grants registered organ donors priority in receiving organs, should they need transplants in the future. We model an individual’s decision to join the donor registry, which entails a tradeoff between abundance of supply, exclusivity of priority, and cost of donating (e.g., psychological burden). Assuming heterogeneity in the cost of donating only, we find the introduction of the donor-priority rule leads to improved social welfare. By incorporating heterogeneity in the likelihood of requiring an organ transplant and in organ quality, we show that, in contrast to the literature, introducing the donor-priority rule can lower social welfare due to unbalanced incentives across different types of individuals. In view of the potentially undesirable social-welfare consequences, we consider a freeze-period remedy, under which an individual is not entitled to a higher queueing priority until after having been on the organ-donor registry for a specified period of time. We show this additional market friction helps rebalance the incentive structure, and in conjunction with the donor-priority rule, can guarantee an increase in social welfare by boosting organ supply without compromising organ quality or inducing excessively high costs of donating.

Keywords: organ donation, donor-priority rule, health policy, queueing games, organ transplantation

JEL Classification: C61, D64, I11

Suggested Citation

Dai, Tinglong and Zheng, Ronghuo and Sycara, Katia, Jumping the Line, Charitably: Analysis and Remedy of Donor-Priority Rule (November 25, 2018). Management Science, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3292284

Tinglong Dai (Contact Author)

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

HOME PAGE: http://carey.jhu.edu/faculty/tinglong-dai-phd

Ronghuo Zheng

University of Texas at Austin - McCombs School of Business ( email )

Austin, TX 78712
United States

Katia Sycara

Carnegie Mellon University - School of Computer Science ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213
United States

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