Julio J. Elias, Nicola Lacetera, Mario Macis have an interesting paper:
Alvin Roth stresses that “we need to understand better and engage more with the phenomenon of ‘repugnant transactions’, which often serves as an important constraint on markets and market design.” The prohibition on payments to kidney donors is one important example of this phenomenon. Our research suggests that individual choices based on repugnance considerations respond in a predictable ways to efficiency information, but also that ethical views play a crucial role in these preferences.
Supplying evidence and promoting studies on such sensitive topics might therefore lead to greater awareness and improved policy design based on the actual preferences of a population. In the case of introducing regulated payments for organ donors and their families in particular, the evidence is particularly strong that informing society about the potential benefits of economic incentives does impact the acceptability of this transaction.
Because individual preferences appear to depend on expected efficiency in addition to ethical considerations, pilot trials testing the outcomes of different arrangements may enhance the ability of a population to determine the preferred organ procurement and allocation system.
This topic of kidneys is really intriguing for this blog.
This post – Regulated market for kidneys in Iran – written in July 2010 continues to get comments till date. There is hardly a week when someone does not post a comment which is related to either demand or supply of kidneys. It currently says 60 responses but is much more as many have been deleted given the randomness of the comment.
So it seems this is one big missing market (if one can call it that) which is affecting a lot of people. How to make it work keeping sensibilities in mind is obviously a big issue to tackle..