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Title: Market Failure in Kidney Exchange
We show that kidney exchange markets suffer from market failures whose remedy could increase transplants by 30 to 63 percent. First, we document that the market is fragmented and inefficient; most transplants are arranged by hospitals instead of national platforms. Second, we propose a model to show two sources of inefficiency: hospitals only partly internalize their patients’ benefits from exchange, and current platforms suboptimally reward hospitals for submitting patients and donors. Third, we calibrate a production function and show that individual hospitals operate below efficient scale. Eliminating this inefficiency requires either a mandate or a combination of new mechanisms and reimbursement reforms. (JEL D24, D47, I11)  more » « less
Award ID(s):
1729090
PAR ID:
10188997
Author(s) / Creator(s):
; ; ; ;
Date Published:
Journal Name:
American Economic Review
Volume:
109
Issue:
11
ISSN:
0002-8282
Page Range / eLocation ID:
4026 to 4070
Format(s):
Medium: X
Sponsoring Org:
National Science Foundation
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