From the article "The Market for Blood" by Robert Slonim, Carmen Wang, and Ellen Garbarino.
With no market price for whole blood donations and with limited storage length for whole blood, coordinating demand and volunteer supply has been subject to episodes of both excess supply and shortages. Supply spikes often occur after disasters, due to suppliers’ altruistic responses and inadequate market signals that would have revealed little or no shift in demand. Spikes in donations, combined with six week shelf life for whole blood, along with technical constraints and collection agency policies, have led to destroying blood supply after national disasters. (p. 189-190)
It is also common for volunteer supply to fall below demand, especially during the winter (when suppliers are less able to donate due to higher rates of colds and the flflu) and holiday periods (when people travel). (p. 190).
In the current volunteer blood donation context, the absence of a market price means that donors may donate when blood is not needed and not donate when it is needed. (p. 191).
We have presented evidence that incentives offered at blood drives significantly increase the number of donors presenting and units of blood collected, and do not increase the proportion of deferrals. We also found that, when incentives are offered at a given drive, turnout is significantly reduced at (geographically and temporally) neighboring drives, especially when these drives do not offer incentives. This indicates that some donors switch the timing and location of their donations to take advantage of material incentives. Ignoring displacement effects could thus lead to a substantial over-estimate of the total effect of incentives depending on the presence of neighboring drives and whether they offer incentives.
That is from the conslusion of the paper "Will There Be Blood? Incentives and Displacement Effects in Pro-Social Behavior" by Lacetera, Macis, and Slonim (American Economic Journal: Economic Policy, February 2012). An early draft is here (March 2011).The abstract:
We present evidence from nearly 14,000 American Red Cross blood drives and from a natural field experiment showing that economic incentives have a positive effect on blood donations without increasing the fraction of donors who are ineligible to donate. The effect increases with the incentive’s economic value. However, a substantial proportion of the increase in donations is explained by donors leaving neighboring drives without incentives to attend drives with incentives; this displacement also increases with the economic value of the incentive. We conclude that extrinsic incentives stimulate pro-social behavior, but unless displacement effects are considered, the effect may be overestimated.
