Working Paper: NBER ID: w31941
Authors: Tayfun Sönmez; M. Utku Ünver
Abstract: Kidney exchange emerges as a pioneering application in the early stages of market design. In contrast to most other successful applications in the field, where design economists primarily serve as consultants to decision-makers, in the context of kidney exchange, they assumed the role of outsider critics, ultimately succeeding in shaping real-life practices and institutions. This paper delves into the strategies that facilitated this influential role. Drawing on our two-decade involvement in shaping kidney and liver exchange clearinghouses in the United States and Turkey, we provide insights into factors pivotal for the effectiveness of market design research in shaping policy. Building upon these experiences and incorporating lessons from school choice reforms in the 2000s, Sönmez (2023) introduces a novel institutional design paradigm termed "minimalist market design." Recent years have witnessed tangible outcomes resulting from integrated research and policy efforts employing this framework, notably contributing to the 2021 reform of the US Army's cadet branching system and the establishment of reserve systems during the Covid-19 pandemic for vaccine and therapy allocation across multiple states.
Keywords: Market Design; Kidney Exchange; Liver Exchange; Policy Influence
JEL Codes: C78; D47
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Integration of market design principles (D47) | Influence on policy and institutional practices (D78) |
| Application of market design strategies (D47) | Success of kidney exchange programs (C71) |
| Need for market design expertise (D47) | Failures of US liver exchange pilot program (I19) |
| Introduction of new continuous distribution system (D39) | Improvement of organ allocation fairness (D63) |
| Introduction of new continuous distribution system (D39) | Concerns about implications for living donors (D64) |
| Effective market design must consider ethical implications (D47) | Alignment of research with institutional missions (I23) |
| Alignment of market design expertise with stakeholders' goals (D47) | Successful implementation of policies (D78) |