Pramanick, Amrita and Banerjee, Swapnendu (2014): Optimal organization of surrogacy contracts and underinvestment.
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We develop a model of commercial gestational surrogacy in which a childless couple approaches a prospective surrogate, who is willing to gestate for the couple. The surrogate’s care is non-contractible. We show that if the surrogate doesn’t have any wealth, at the optimum, she is always found to put in sub-optimal effort. Put differently, the surrogate cannot be made a residual claimant and therefore eliciting first best care is never optimal. Therefore the paper, in a hidden action framework, formalizes this ‘inefficiency’ inherent in the Indian ‘rent-a-womb’ market.
|Item Type:||MPRA Paper|
|Original Title:||Optimal organization of surrogacy contracts and underinvestment|
|Keywords:||Surrogate, intended-parents, surrogacy agency, monitoring, moral hazard|
|Subjects:||D - Microeconomics > D1 - Household Behavior and Family Economics > D10 - General|
|Depositing User:||Dr. Swapnendu Banerjee|
|Date Deposited:||29. Jun 2014 04:10|
|Last Modified:||16. Mar 2015 10:54|
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