Econometrica: May, 2020, Volume 88, Issue 3

Efficient and Incentive-Compatible Liver Exchange

https://doi.org/10.3982/ECTA16400
p. 965-1005

Haluk Ergin, Tayfun Sönmez, M. Utku Ünver

Liver exchange has been practiced in small numbers, mainly to overcome blood‐type incompatibility between patients and their living donors. A donor can donate either his smaller left lobe or the larger right lobe, although the former option is safer. Despite its elevated risk, right‐lobe transplantation is often utilized due to size‐compatibility requirement with the patient. We model liver exchange as a market‐design problem, focusing on logistically simpler two‐way exchanges, and introduce an individually rational, Pareto‐efficient, and incentive‐compatible mechanism. Construction of this mechanism requires novel technical tools regarding bilateral exchanges under partial‐order‐induced preferences. Through simulations we show that not only can liver exchange increase the number of transplants by more than 30%, it can also increase the share of the safer left‐lobe transplants.

Supplemental Material