Dynamic Incentives in Wait List Mechanisms
AbstractMany 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.
CitationAgarwal, 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
- D82 Asymmetric and Private Information; Mechanism Design
- I11 Analysis of Health Care Markets