Power Dynamics In Iranian Organ Markets
The dire Iranian economy has fueled the growth of the body parts market: people in desperate need of money put their well-functioning organs on sale. The performance of organ markets and an analysis of buyers and sellers in these markets are fascinating because they tie to concepts of auctions and strategic interaction.
The market witnesses an increase in organ sellers because of the poor economy. Many put their announcements on the wall in the hope that potential buyers directly contact them. This is a good thing for patients in need of organs now that they have more outside options and enjoy more power. A seller competes with other sellers for a lower price by decreasing their charges until a patient is willing to make the purchase. This form of transaction can be seen as a descending bid auction; a deal is made when the price is low enough that both the buyer and the seller agree. However, in the organ market, there seems to be asymmetrical information: sellers have little information about potential buyers out there or their preferences for price. As the news mentions, besides the Internet or announcements on walls, where transactions take place directly between two parties, sellers also turn to brokers to help them find a good buyer because brokers have more information about and connections with potential buyers. Middlemen help sellers by saving time and effort for them and by increasing the rate of successful transactions. On the patients’ side, patients with no access to the Internet may find it better to ask brokers for potential sellers. In a network, a broker may be considered an “ego” that has the richest connections, while among the people he connects to there may be no or very few connections. Therefore, brokers seem to have many outside options compared to either the sellers or the buyers; they have more power in a relation, too. For example, if one seller refuses to pay the commission fee the broker charges, the broker can turn to another seller that offers a more favorable price. This might explain the high commission, 50% on the resulting sales as is mentioned in the news, that brokers receive on average.
The textbook mentions that to gain more power in a relation, one can pretend to have many outside options. However, in the presence of the poor economy, it is doubtful whether the Iranian organ sellers can put on such pretense to gain more negotiating power.