Market Design & Policy Impact

Last Updated: February 2026

Impact on the 2012 Economics Prize in Memory of Alfred Nobel


The Economics Prize in Memory of Alfred Nobel was awarded in 2012 to Alvin E. Roth and Lloyd Shapley for their contributions to the “Theory of Stable Allocations and the Practice of Market Design.” I am grateful to the Nobel Committee, which extensively cited my research in the scientific background document among the main contributions that led to this prize.

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Organization of Liver-Paired Exchanges and World-first Large Exchanges

Liver-Paired Exchange vs Kidney-Paired Exchange

  • Living-donor liver transplantation differs from kidney transplantation in three major ways.
    • It is more invasive to the donor as a part of the liver is taken out instead of the whole kidney in kidney transplantation. Either the right lobe, which is substantially larger, the left lobe, or smaller segments of the left lobe numbered 2 and 3 can be used as grafts. It is generally riskier for the donor to donate the right lobe.
    • Tissue-type incompatibility does not play a role, while blood-type compatibility is still vital.
    • Size compatibility becomes an issue, as a patient should not receive a graft that is less than 0.8% of her body weight, and a substantially large graft that would not fit in the cavity. Thus, for adult patients, on average, a right-lobe graft fits better, although it is five times more likely to be fatal for the donor, according to earlier data.
  • My first paper on the subject, with Haluk Ergin and Tayfun Sönmez, “Efficient and Incentive-Compatible Liver Exchange,” Econometrica (2020), modeled the problem from the angle of incentives of patient-donor pairs due to the higher risks associated with right-lobe donation and proposed an incentive-compatible 2-way exchange mechanism that could manage such a system, as all exchanges reported in the medical literature were 2-way exchanges up to that point.

The BBS Liver-Paired Exchange System at İnönü University, Malatya, Türkiye

The logo of BBS-LPE System at İnönü University
  • I, together with Tayfun Sönmez and the Liver Transplantation Institute team at İnönü University in Malatya, Türkiye, under the direction of Dr. Sezai Yılmaz, launched a living-donor liver exchange program —one of the very few in the world— in 2022. As with all the policy work I have done, this is also a pro bonoinitiative.
  • Banu Bedestenci Sönmez Liver-Paired Exchange (BBS-LPE) System, which we named after Tayfun’s late wife, was announced to the public in July 2023. During the 1.5-year pilot period, 15 liver exchange transplants were performed in the system, including the world’s first 4-way liver exchange and the third 3-way liver exchange. By the end of 2025, 353 transplants were conducted through the system (155 in 2025, 48.5% of all living-donor liver transplants conducted in the Institute), including
    • 2 world-first 7-way exchanges,
    • 8 world-first 6-way exchanges,
    • 5 world-first 5-way exchanges,
    • 14 world-first 4-way exchanges,
    • 30 (and the world’s 3rd-30th) 3-way exchanges, and
    • 60 2-way exchanges.
      BBS-LPE Liver Exchange Numbers as of December 31, 2026
      (Last Updated: December 31, 2025. For more up-to-date numbers, see the BBS-LPE System webpage.)
  • The following paper is about the pilot period and the first 4-way liver exchange experience:
    “The First 4-Way Liver Paired Exchange from an Interdisciplinary Collaboration between Healthcare Professionals and Design Economists,” American Journal of Transplantation (2023) with Sezai Yılmaz, Tayfun Sönmez, Volkan İnce, Sami Akbulut, Burak Işık, Şükrü Emre.
  • Malatya Team has performed more than 4,000 liver transplants over the years and is one of the most experienced centers in the world, ranking second globally on an annual basis. Their attitude toward left-lobe vs. right-lobe transplants is such that they prefer right-lobe transplants to adult patients, and left-lobe transplants are mostly reserved for pediatric patients. The risks associated with their hospital’s experience with right-lobe vs left-lobe transplants are very similar. Thus, we had to change our approach from our Econometrica paper to establish this system.
  • A large number of compatible pairs also enter the system, enabling patients to receive better matches than their paired donor, a better size match, or an ABO-identical match rather than just an ABO-compatible match.
  • The following paper discusses the first 5- and 6-way exchanges and the significant role multi-way exchanges play in mediating size-incompatibility in living-donor liver transplantation.
    “Enhanced Role of Multi-Pair Donor Swaps in Response to Size Incompatibility: The First Two 5-Way and the First 6-Way Liver Paired Exchanges,” American Journal of Transplantation (2024) with Sezai Yılmaz, Tayfun Sönmez, Volkan İnce, Sami Akbulut, Kemal Barış Sarıcı, Burak Işık.
  • My contributions were recognized by İnönü University in 2024 with an Honorary Ph.D.

Liver-Paired Exchange in the Rest of the World and the Importance of Multi-way Exchanges

  • The size-compatibility requirement substantially increases the scope of larger multi-way liver exchanges beyond what can be achieved via 2-way exchanges.
  • Besides two exceptions, all exchanges worldwide are 2-way exchanges outside our system.
  • As a result, the ratio of liver exchange transplants to all living-donor transplants is around 1.5% in the rest of the world, where liver exchange is practiced. UNOS had to shut down its pilot liver exchange program because it conducted no exchanges for over 1 year due to insufficient collaboration among centers.
  • In Malatya, this percentage has been an order of magnitude larger—more than 45% in 2024 and 2025.
  • See more on this:

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Allocation of Scarce Medical Resources Using Reserve Systems

  • Please visit https://covid19reservesystem.org for the policy and other impacts of my research on the allocation of scarce medical resources through reserve systems.

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The Organization of Living-Donor Kidney-Paired Exchanges and Innovations Introduced

The Meta-Level Contribution

Role in the Establishment of Kidney Exchange Programs

  • The New England Kidney Exchange Program (NEPKE): Dr. Frank Delmonico, Susan Saidman, Alvin E. Roth, Tayfun Sönmez, and I launched this program in 2004. This is the first program that uses optimization-based mechanisms to find kidney exchanges. NEPKE became the forerunner of the UNOS National Kidney Exchange Program and was absorbed into it in 2010. See on NEPKE our paper “A Kidney Exchange Clearinghouse in New England,” American Economic Review Papers and Proceedings (2005).
  • Alliance for Paired Kidney Donation (APKD): Alvin E. Roth, Tayfun Sönmez, and I also helped launch this program, founded by Dr. Michael Rees, with funding from the University of Toledo and the University of Cincinnati in Ohio. APKD is a cross-country kidney exchange registry. See more on APKD, our paper “Kidney Exchange and the Alliance for Paired Donation,” Interfaces—renamed as INFORMS Journal on Applied Analytics (2015), for which I was elected an INFORMS Edelman Laureate in 20214.
  • The UNOS National Kidney Exchange Program uses principles similar to those of the APKD exchange system. I served on the advisory board for the program’s development and co-authored the OPTN/UNOS policy proposal outlining the principles of the national kidney-paired exchange program. NEPKE was absorbed into it, becoming a de facto national program in the United States: Ruthanne Hanto, NEPKE’s director, became the director of the UNOS National Program.

Adopted Key Contributions
(in Reverse Chronological Order)

  • Non-simultaneous, non-directed altruistic donor chains: At APKD, we began implementing never-ending-altruistic-donor (NEAD) chains, an idea we developed with Michael Rees and Jon Kopke. Here is the CNN story of the longest NEAD chain until March 2009, documented in our 2009 New England Journal of Medicine paper “A Non-simultaneous Extended Altruistic Donor Chain.” Also, a 30-way non-simultaneous non-directed altruistic donor chain was reported. The National Kidney Registry (not to be confused with the US National Program) is currently the leading organization facilitating kidney exchanges and primarily uses NEAD chains.
  • The NEAD-chain idea is based on the fact that chain transplants initiated by non-directed altruistic donors need not be done simultaneously. This idea was proposed in our 2006 American Journal of Transplantation paper “Utilizing List Exchange and Non-directed Donation through ‘Chain’ Paired Kidney Donations.”
  • Gains from larger exchanges: In our 2007 American Economic Review paper, “Efficient Kidney Exchange: Coincidence of Wants in Markets with Compatibility-Based Preferences,“ we showed that using at most 4-way exchanges, almost all gains from kidney exchange can be exploited. Based on this, we implemented priority mechanisms using at most 4-way kidney exchanges in NEPKE and APKD (see a related news story). The national program also uses 3-way exchanges.
  • Optimization and software: We have also authored the optimization software used in NEPKE and APKD.
  • Earlier optimization and two-way exchanges: In our 2005 Journal of Economic Theory paper “Pairwise Kidney Exchange,” we, in addition to our mechanism design approach, propose using combinatorial optimization and graph-theoretic techniques developed by Edmonds (1965) to organize kidney exchanges. After we published “Pairwise Kidney Exchange” as an NBER working paper in the summer of 2004, the Johns Hopkins team published a paper in 2005 in the Journal of the American Medical Association that used simulations of the generalized version of Edmonds’ (1965) algorithm that we proposed in ‘Pairwise Kidney Exchange.’ Consequently, in 2005, the Johns Hopkins University Transplant Center adopted a pairwise kidney exchange scheme based on Edmonds’ algorithm.
  • Simultaneous non-directed altruistic and deceased donor chains: In our 2004 Quarterly Journal of Economics paper “Kidney Exchange,” we propose the idea of a “w-chain exchange.” Non-directed altruistic donor chain exchanges are based on the same idea, and Johns Hopkins developed this second idea. Johns Hopkins University conducted the first 5-way non-directed donor chain exchange, in which a non-directed altruistic donor donates a kidney to the patient of the first pair, the donor of the first pair donates a kidney to the patient of the second pair, the donor of the second pair donates a kidney to the patient of the third pair, the donor of the third pair donates a kidney to the patient of the fourth pair. Finally, the donor of the fourth pair donates a kidney to a waiting list patient without a donor.

Other Key Contributions

  • Including compatible pairs in kidney exchange: The greatest gains from kidney exchange would come from including compatible pairs. Over the years, we have made some proposals in this direction. In our 2020 American Economic Review paper “Incentivized Kidney Exchange,” we proposed linking the deceased-donor list to the kidney-exchange pool by giving insurance to the compatible pairs who bring their compatible (and desirable) donors to the system: if their received transplant fails in the future, they will receive a guarantee on the deceased-donor list for a transplant. We estimate that the gains from kidney exchange can be substantial and make everyone, including future waitlist participants, better off. In a similar vein, we also explored the structure of two-way kidney exchanges when compatible pairs participate in this 2014 Journal of Economic Theory paper, “Altruistically Unbalanced Kidney Exchange.”
  • Unintended consequences: We looked into difficulties associated with establishing multi-center kidney exchange programs in the 2005 working paper, “Transplant Center Incentives in Kidney Exchange,” and into using other technological advances in conjunction with kidney exchange, such as overcoming certain types of blood incompatibilities in the 2018 Journal of Economic Theory paper, “How (Not) to Integrate Blood Subtyping Technology to Kidney Exchange.”
  • Dynamic market design: My 2010 Review of Economic Studies paper, “Dynamic Kidney Exchange,” is among the first dynamic market-design papers in matching and helped lead to a more applied literature.

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Recommendation Systems for Adoption of Children

Improving Pennsylvania State-wide Adoption Network

  • Together with Onur Kesten at Carnegie Mellon (now at the University of Sydney), his Operations Management colleague Mustafa Akan, and their then-student Vince Slaugh (now at Cornell, Ph.D. in Operations Management), we initiated a project on “adoption of kids” in connection with State-wide Adoption Network (SWAN) of Pennsylvania to improve recommendation systems suggesting families for children up for adoption.
  • Previous recommendation tools have been unsuccessful in being used by social workers distributed to different parts of the state, who are looking for the best fits for the children up for adoption in the state network. They often bypassed the tools’ recommendations and used their limited networks to find families. We have made some improvements to their system to increase social workers’ usage rates.
  • Here is the 2015 paper that explains those improvements (published in Interfaces, now the INFORMS Journal on Applied Analytics): “The Pennsylvania Adoption Exchange Improves Its Matching Process” with Vincent W. Slaugh, Mustafa Akan, and Onur Kesten.

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Priority-based Assignment of Students to Schools

School Choice in Türkiye

The Ministry of Education of Türkiye planned to implement a centralized school allocation scheme for public high schools, starting in 2018, based on student-school addresses and other idiosyncratic priority determinants (e.g., student GPA), as well as exam scores for national exam schools.

  • I, together with Tayfun Sönmez and Umut Dur, presented to the Minister in January 2018 how a school-choice scheme can be implemented in Türkiye. Bahçeşehir University, with the help of our Boston College colleague, Can Erbil, organized and sponsored this meeting.
  • The slides of this presentation are here (in Turkish).
  • After our interactions in 2018, the Ministry’s Allocation Unit used the student-proposing deferred-acceptance (DA) algorithm.
    • For 2018, students’ priorities at national exam schools were largely based on exam scores, while at local schools, they were based on street addresses, GPA, etc.
    • Despite our objections, the school’s ranking in a student’s preference list was used as a tie-breaker ahead of other factors. For example, a student who ranked a school 2nd on her list would get higher priority than a student who ranked it 3rd on his list if the higher-order priority criteria for the two students were the same.
    • If the priorities were purely lexicographic — based on how students ranked the schools and then other factors — DA would have become the old ‘Boston’ algorithm, aka the immediate acceptance (IA) algorithm, which is known to be inferior to the textbook DA based on its manipulability and unfairness. Although the problems with the 2018 Ministry algorithm were less severe, it was still not strategy-proof.
  • After our further interactions in 2019, along with ITU economist Sinan Ertemel and Umut Dur’s presentation to the new Ministry administration, the new Ministry Administration began implementing a system in which priorities are not determined by how students ranked the schools, as per its new rulebook.

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Research & Policy Impact Coverage in Media Outlets

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