Blood Allocation with Replacement Donors: Theory and Application
80 Pages Posted: 3 Jun 2021 Last revised: 10 Oct 2022
Date Written: October 1, 2022
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 propose novel blood allocation mechanisms that accommodate fairness, efficiency, and various other allocation objectives, together with the possibility of endogenizing exchange rates between received and donated blood units beyond the classical one-for-one exchange. These mechanisms also provide correct incentives for the patients to bring forward as many replacement donors as possible. This framework and the class of mechanisms are applicable to general settings of multi-unit exchange of indivisible goods with compatibility-based preferences beyond blood allocation.
Keywords: Blood transfusion, market design, multi-unit exchange, dichotomous preferences, endogenous pricing
JEL Classification: D47, C78, D82, D78, I19
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