Download this Paper Open PDF in Browser

Rent a Womb: Surrogate Selection, Investment Incentives and Contracting

41 Pages Posted: 2 Apr 2006  

Swapnendu Banerjee

Jadavpur University, Department of Economics; Jadavpur University, Calcutta

Sanjay Basu

National Institute of Bank Management

Date Written: March 29, 2006

Abstract

We develop a model of gestational surrogacy, in which a childless couple faces heterogeneous prospective surrogates. High-type surrogates add more value but also have higher outside options. Surrogates can make specific investments for the overall well-being (care) of the unborn child. We show that, under noncontractibility, surrogates invest less (take less care) than the first-best. Couples are also more likely to choose low-type surrogates, who need less compensation for foregoing cheaper outside options. Hence the popular practice of making surrogacy contracts unenforceable might put the unborn child at risk. It might also lead to exploitation of needy women by couples.

Keywords: Surrogate, Intended parents, Noncontractibility, Under-investment

JEL Classification: I11, J13, L14, L24

Suggested Citation

Banerjee, Swapnendu and Basu, Sanjay, Rent a Womb: Surrogate Selection, Investment Incentives and Contracting (March 29, 2006). Available at SSRN: https://ssrn.com/abstract=894022 or http://dx.doi.org/10.2139/ssrn.894022

Swapnendu Banerjee (Contact Author)

Jadavpur University, Department of Economics ( email )

Kolkata, 700032
India
91-9330606340 (Phone)

Jadavpur University, Calcutta ( email )

Department of Economics
Calcutta 700032, West Bengal 700032
India
91-9330606340 (Phone)

Sanjay Basu

National Institute of Bank Management ( email )

Kondhwe Khurd, NIBM P.O.
Pune, WY Maharashtra 411048
India

Paper statistics

Downloads
282
Rank
89,760
Abstract Views
2,481