Solving Shortage in a Priceless Market: Insights from Blood Donation / Tianshu Sun, Susan Feng Lu, Ginger Zhe Jin.

Format:

Book

Author/Creator:

Sun, Tianshu.

Contributor:

National Bureau of Economic Research.

Lu, Susan Feng.

Jin, Ginger Zhe.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21312.

NBER working paper series no. w21312

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Solving Shortage in a Priceless Market

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

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 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.

Notes:

Print version record

July 2015.