[savanaly]

There's a concept in economics whereby the gains from trade tend to accumulate to the owners of "fixed resources" in a system. In this case that would be the people selling the blood. So I would expect that in the long run the market would stabilize with people selling their blood getting paid the full worth of their blood (decreased by transaction costs of all the middlemen involved in getting the blood to other people, of course).

The reasoning is that if a blood bank is trying to grab a bigger slice of the pie than just its operating costs, a second blood bank can open and compete with the first one on price, and the only equilibrium is to have blood banks charging exactly at cost and no more.

Since you say that the business is predatory on the blood donors, do you think it's just that the market hasn't had time to settle, or that there's some funny business in this market maybe?

[joe_the_user]

I think the problem of the sale of blood isn't people not getting paid fairly for their blood in the purely economic sense. There's no reason to think that the "full worth" of blood is that high since producing blood is pretty common "skill".

The problem is abetting those desperate to sell their blood and body parts are going to be abetting the downward spiral such people tend to be on. The most blood donors are homeless and drug addicts. Donating blood doesn't make someone more able to find a job, housing etc because it's a literal drain on their vitality.

[savanaly]

That is a good point and I am somewhat concerned about that. If the decision were put to me I would personally have to think long and hard about whether it's actually good for society to let people sell their body parts. But it's still helpful to have a clear economic picture of what is going to be affecting the market price of these things and that's fun to think about so I try to focus on that.

[frgtpsswrdlame]

But do we want to allow rich vampires to drive the price of blood up? It seems to me that maybe blood shouldn't be treated like a commodity which is driven by the market. Most people receiving blood are not exactly in a position to turn it down or shop around and so some technologists driving the price up to $8,000 is going to hurt you.

[savanaly]

To the extent it's a competitive market (and it seems like it would be-- a lot of potential buyers and sellers), the price should be determined by the minimum average cost, not by the willingness/ability of the buyer to pay. This outcome is not dependent on the ability of the buyer to walk away (as you note, their life might depend on it so some of them can't), but on the sellers pursuing their self interest which we can probably count on them to do.

[frgtpsswrdlame]

It may turn out to be a competitive market, I just don't think it should be. In a truly competitive market Peter Thiel could just outbid a sick person for a particularly choice pint. In this market system whether a person gets blood or not will depend on their ability to pay for it not their need of it.