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  5. Dynamic Incentives in Wait List Mechanisms

Dynamic Incentives in Wait List Mechanisms

  • Nikhil Agarwal
  • Itai Ashlagi
  • Paulo Somaini
  • Daniel Waldinger
AEA Papers and Proceedings
vol. 108, May 2018
(pp. 341-47)
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Abstract

Many scarce public resources are allocated through wait lists that use priorities for individual agents. A new priority system for allocating deceased donor kidneys was adopted in 2014. This redesign was guided by simulations that held decision-rules fixed. We synthesize recent theoretical results to show that the welfare effects of a mechanism depend on the interaction between dynamic incentives and heterogeneity in preferences. We show evidence suggesting that patient decisions on the deceased donor kidney wait list respond to dynamic incentives. Therefore, an empirical approach to dynamic mechanism design is an essential complement to mechanism design theory in dynamic environments.

Citation

Agarwal, Nikhil, Itai Ashlagi, Paulo Somaini, and Daniel Waldinger. 2018. "Dynamic Incentives in Wait List Mechanisms." AEA Papers and Proceedings, 108: 341-47. DOI: 10.1257/pandp.20181079

Additional Materials

JEL Classification

  • D82 Asymmetric and Private Information; Mechanism Design
  • I11 Analysis of Health Care Markets