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Solving shortage in a priceless market : insights from blood donation

Author: Tianshu Sun; Susan Feng Lu; Ginger Zhe Jin; National Bureau of Economic Research,
Publisher: Cambridge, Mass. : National Bureau of Economic Research, 2015.
Series: Working paper series (National Bureau of Economic Research), no. 21312.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
Shortage is common in many markets, such as those for human organs or blood, but the problem is often difficult to solve through price adjustment, given safety and ethical concerns. In this paper, we investigate whether market designers can use non-price methods to address shortage. Specifically, we study two methods that are used to alleviate shortage in the market for human blood. The first method is informing  Read more...
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Details

Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Tianshu Sun; Susan Feng Lu; Ginger Zhe Jin; National Bureau of Economic Research,
OCLC Number: 913245311
Notes: "July 2015"
Description: 1 online resource (37 pages) : illustrations, map.
Series Title: Working paper series (National Bureau of Economic Research), no. 21312.
Responsibility: Tianshu Sun, Susan Feng Lu, Ginger Zhe Jin.

Abstract:

Shortage is common in many markets, such as those for human organs or blood, but the problem is often difficult to solve through price adjustment, given safety and ethical concerns. In this paper, we investigate whether market designers can use non-price methods to address shortage. Specifically, we study two methods that are used to alleviate shortage in the market for human blood. The first method is informing existing donors of a current shortage via a mobile message and encouraging them to donate voluntarily. The second method is asking the patient's family or friends to donate in a family replacement (FR) program at the time of shortage. We are interested in both the short-run and long-run effects of these methods on blood supply. Using 447,357 individual donation records across 8 years from a large Chinese blood bank, we show that both methods are effective in addressing blood shortage in the short run but have different implications for total blood supply in the long run. Specifically, we find that a shortage message leads to significantly more donations among existing donors within the first six months but has no effect afterwards. In comparison, a family replacement program has a small positive effect in encouraging existing donors (who donated before the FR) to donate more blood voluntarily after their FR donation, but discourages no-history donors (whose first donation is the FR) from donating in the long run. We compare the effect and efficiency of these methods and discuss their applications under different scenarios to alleviate shortage.

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