Market Design for Altruistic Supply: Evidence from the Lab

Robert Slonim and Carmen Wang

No 9650, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Volunteer supply is widespread, yet without a price inefficiencies occur due to suppliers' inability to coordinate with each other and with demand. For these contexts, we propose a market clearinghouse mechanism that improves efficiency if supply is altruistically provided. The mechanism, a registry, combines aggregate demand information with supplier's willingness to help, and invites volunteers to help only when excess demand occurs. We experimentally study three registries that include stochastic high-stakes demand and heterogeneous supplier costs. We find that all three registries improve efficiency dramatically; they eliminate unneeded costly help when demand is unexpectedly low and significantly increase supply (reduce shortages) otherwise. Further, two registries that invite exactly one registry member to help for each person needing help, rather than the third registry that continues asking members to help until someone helps, result in fewer people joining the registry, but those who join are more likely to help.

Keywords: market design; laboratory experiments; volunteering; public goods provision (search for similar items in EconPapers)
JEL-codes: C93 D47 D64 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2016-01
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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