Game Theory and the Blood Market
This article talks about how game theory has recently infiltrated into the health care market and is being used for blood donations to ensure patients have the proper amount of blood when they need it. The author, Anna Nagurney, talks about how the blood supply chain is a rather complicated network, especially since blood cannot be created, only donated. There are other intricacies in the blood market as well, namely perishability and delivery, that make the supply chain inefficient in times of great need. One example is a hospital that may have regulations requiring it to have a certain amount of blood reserves, even if they may never be needed. Meanwhile, different altruistic groups may be competing for the 10% of blood donors to meet the market demand.
This study is particularly relevant to the idea of matching markets introduced in class. It is very similar to the bipartite matching problem because blood only has a shelf life of 42 days and some people may need blood sooner than others. Suppliers of blood must quickly allot the blood that will expire the earliest to the people who need it the most. Using game theory behind her analysis, Nagurney captured both competitions for suppliers and demanders to recommend the optimal pricing scheme. As a result of many game theorists studying healthcare, professional are starting to create synergies for blood service organizations to maximize the supply to patients. It would both cover the hospitals’ needs to carry a certain capacity at all times and allow blood collectors to distribute as much blood as possible to those in need.