Remedying adverse selection in donor-priority rule using freeze period: Theory and experiment

Improving the deceased organ donation is the key to alleviate organ shortages. We compare the aggregate donation incentive and social welfare under different organ allocation mechanisms theoretically and test the predictions in the laboratory. While boosting the aggregate donation rate, the donor-priority rule brings an unwanted impact by attracting more donations from agents with a higher risk of organ failure. This compromises the average quality of organ supply and decreases social welfare. We show that by augmenting the donor-priority rule with a freeze period, which delays the effective starting time of the priority benefit, it improves the aggregate donation rate without reducing social welfare.