A. H. Barnett

An economic analysis of transplant organs: A comment and extension

ConclusionThe recent paper by B-R should be applauded for bringing to light an extremely important and controversial public policy issue. The authors of this note have been students of antitrust, regulation, and related microeconomic policy issues for over fifteen years. Yet, they can safely say that they have never encountered a single policy that is more at odds with the public welfare than is the current organ procurement policy.As economists, it is easy to describe and analyze the tremendous inefficiencies, waste, and market distortions created by the current altruistic system. But as human beings, they authors are incensed at the unnecessary suffering and loss of life that is caused by the current policy and is so poorly revealed in formal diagrams. Hopefully, B-Rs paper, along with this corrective note, will help to spawn a more rational public policy toward cadaveric organ procurement.

The medical community's opposition to organ markets: Ethics or economics?

A severe shortage of cadaveric human organs for transplantation exists in the U.S. The obvious cause of this shortage is our current public policy which proscribes payment for such organs. Support for this policy and opposition to the formation of organ markets has been quite strong among transplant suppliers (both hospital and physician groups). This paper critically evaluates the ethical arguments advanced to buttress this policy position and presents an alternative economic explanation based upon profit-maximizing behavior. The model we develop is based upon monopsony in organ procurement with a kinked (and possibly discontinuous) organ supply function.

The Simple Welfare Economics of Network Externalities and the Uneasy Case for Subscribership Subsidies

The goal of universal service has dominated the telecommunications policy landscape for at least the past half century. This policy objective has been promoted with cross subsidies from long-distance telecommunications services to subscribers to local telecommunications service. The economic rationale for these cross subsidies is network externalities. In this paper, we show that: (1) the presence of network externalities, even if substantial in overall magnitude, does not generally justify a subscribership subsidy, even a well-designed one; and (2) the empirical realities of telecommunications markets make it unlikely that subscribership subsidies of any kind will increase social welfare.