The Welfare Consequences of the Donor Priority Rule

In the U.S., the growth of the organ transplantation waiting list significantly outpaces the supply of donated organs. Among the many initiatives aiming to boost the supply, the donor priority rule, under which a registered organ donor—in case of needing a transplant—is given priority to receive an organ over a nondonor, has been considered by policy makers in the U.S. In this paper, we model the U.S. organ donation and allocation system using the strategic queueing theoretic framework. To capture the tradeoff behind individuals’ donating behavior, we use quality-adjusted life expectancy (QALE) to measure their benefits from potential organ transplants, and use the cost of donating to measure their loss from becoming potential cadaveric organ donors. Then we characterize the equilibrium before and after introducing the donor priority rule. When individuals are homogeneous in their health status, introducing donor priority rule always leads to improved social welfare. When individuals possess heterogeneous health status, in contrast to the extant literature, we show that the social welfare can be worse off after introducing the donor priority rule due to the unbalanced incentive structure. Finally, we propose a simple freeze-period mechanism, and prove that in conjunction with the donor priority rule, it can increase the share of organ donors without distorting the average quality of the donated organs. Last updated: November 15, 2015