Paolo Somaini, Stanford
Kalai Family Workshop in Econometrics
Nov 2 2017
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"An Empirical Framework for Sequential Assignment: The Allocation of Deceased Donor Kidneys"
A transplant can improve a patient's life while saving several hundred thousand dollars in healthcare expenditures. Organs from deceased donors, like many other scarce public resources (e.g. public housing, child-care slots, publicly funded long-term care), are rationed via a sequential offer waiting list. The theoretical trade-offs in designing these mechanisms are not well understood and depend on agent preferences. This paper establishes an empirical framework for analyzing the trade-offs involved in designing sequential offer waiting lists and applies it to study the allocation of deceased donor kidneys. We model the decision to accept an organ while on the waiting list as an optimal stopping problem and use it to estimate the value of accepting various kidneys. Our estimates show that while some types of donors are preferable for all patients (e.g. young donors), there is substantial match-specific heterogeneity in values. We show how to use these estimates to solve for the equilibria of counterfactual mechanisms. These techniques are then used to find mechanisms that improve on design goals such as increasing expected life-years from transplantation and reducing organ waste.