Individual Rationality and Participation in Large Scale, Multi-Hospital Kidney Exchange
As multi-hospital kidney exchange clearinghouses have grown, the set of players has grown from patients and surgeons to include hospitals. Hospitals have the option of enrolling only their hard-to-match patient-donor pairs, while conducting easily arranged exchanges internally. This behavior has already started to be observed.
We show that the cost of making it individually rational for hospitals to participate fully is low in almost every large exchange pool (although the worst-case cost is very high), while the cost of failing to guarantee individually rational allocations could be large, in terms of lost transplants. We also identify an incentive compatible mechanism.
We have had valuable conversations about this paper with Itay Fainmesser, Duncan Gilchrist, Jacob Leshno, and Mike Rees, and have benefited from
comments by participants at the NBER Market Design conference and the Harvard-MIT Economic Theory seminar. This work has been partially funded by the NSF. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.