Institutional Affiliation: Stanford University
|An Empirical Framework for Sequential Assignment: The Allocation of Deceased Donor Kidneys|
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An organ transplant can improve a patient’s life while also realizing substantial savings in healthcare expenditures. Like many other scarce public resources, organs from deceased donors are rationed to patients on a waitlist via a sequential offer mechanism. The theoretical trade-offs in designing these rationing systems are not well understood and depend on agent preferences. This paper establishes an empirical framework for analyzing waitlist systems and applies it to study the allocation of deceased donor kidneys. We model the decision to accept an organ or wait for a more preferable organ as an optimal stopping problem, and develop techniques to compute equilibria of counterfactual mechanisms. Our estimates show that while some types of kidneys are desirable for all patients, there is...
|Market Failure in Kidney Exchange|
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We show that kidney exchange markets suffer from market failures whose remedy could increase transplants by 30%–63%. First, we document that the market is fragmented and inefficient: most transplants are arranged by hospitals instead of national platforms. Second, we propose a model to show two sources of inefficiency: hospitals only partly internalize their patients' benefits from exchange, and current platforms suboptimally reward hospitals for submitting patients and donors. Third, we calibrate a production function and show that individual hospitals operate below efficient scale. Eliminating this inefficiency requires either a mandate or a combination of new mechanisms and reimbursement reforms.
Published: Nikhil Agarwal & Itai Ashlagi & Eduardo Azevedo & Clayton R. Featherstone & Ömer Karaduman, 2019. "Market Failure in Kidney Exchange," American Economic Review, vol 109(11), pages 4026-4070.
|The Need for (long) Chains in Kidney Exchange|
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It has been previously shown that for sufficiently large pools of patient-donor pairs, (almost) efficient kidney exchange can be achieved by using at most 3-way cycles, i.e. by using cycles among no more than 3 patient-donor pairs. However, as kidney exchange has grown in practice, cycles among n>3 pairs have proved useful, and long chains initiated by non-directed, altruistic donors have proven to be very effective. We explore why this is the case, both empirically and theoretically. We provide an analytical model of exchange when there are many highly sensitized patients, and show that large cycles of exchange or long chains can significantly increase efficiency when the opportunities for exchange are sparse. As very large cycles of exchange cannot be used in practice, long non-simult...
|Individual Rationality and Participation in Large Scale, Multi-Hospital Kidney Exchange|
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As multi-hospital kidney exchange clearinghouses have grown, the set of players has grown from patients and surgeons to include hospitals. Hospitals have the option of enrolling only their hard-to-match patient-donor pairs, while conducting easily arranged exchanges internally. This behavior has already started to be observed. We show that the cost of making it individually rational for hospitals to participate fully is low in almost every large exchange pool (although the worst-case cost is very high), while the cost of failing to guarantee individually rational allocations could be large, in terms of lost transplants. We also identify an incentive compatible mechanism.