Monday, December 21, 2009

Law and economics of repugnant markets

Kimberly Krawiec at The Faculty Lounge, some time ago followed up on one of my posts with an interesting one of her own: Selecting for Sex: US entrepreneurship in the baby market

She is a professor at Duke Law, and a scholar of repugnant markets, often analysing them with respect to rent seeking behavior. See e.g.

Altruism and Intermediation in the Market for Babies, 66 WASH. & LEE L. REV. 203 (2009).
Abstract: Central to every legal system is the principle that certain items are off-limits to commercial exchange. In theory, babies are one such sacred object. This supposed ban on baby selling has been lamented by those who view commercial markets as the most efficient means of allocating resources, and defended by those who contend that commercial markets in parental rights commodify human beings, compromise individual dignity, or jeopardize fundamental values. However, the supposed and much-discussed baby selling ban does not, and is not intended to, eliminate commercial transactions in children. Instead, it is an asymmetric legal restriction that limits the ability of baby market suppliers to share in the full profits generated by their reproductive labor, insisting instead that they derive a large portion of their compensation from the utility associated with altruistic donation. Meanwhile, a wide range of baby market intermediaries profit handsomely in the baby market, without similar restrictions on their market activities. Baby selling "bans" thus have more in common with the rent-seeking by powerful marketplace actors seen in other commercial markets than with normative statements about the sanctity of human life. The author concludes with a call for the removal of the last vestiges of the "ban" against baby selling and other laws that diminish the capacity of baby market suppliers to access the marketplace.

Price and Pretense in the Baby Market, in BABY MARKETS: MONEY, MORALS, AND THE NEOPOLITICS OF CHOICE (Cambridge University Press, forthcoming 2009).

Show Me the Money: Making Markets in Forbidden Exchange, 72 LAW & CONTEMP. PROBS. (2009).

Sunny Samaritans and Egomaniacs: Price-Fixing in the Gamete Market, 72 LAW & CONTEMP. PROBS._ (2009).
Abstract: This Article considers the market structure of the human egg (or “oocyte”) donation business, particularly the presence of anti-competitive behavior by the fertility industry, including horizontal price-fixing of the type long considered per se illegal in other industries. The Article explores why this attempted collusion has failed to generate the same public and regulatory concern prompted by similar behavior in other industries, arguing that the persistent dialogue of gift-giving and altruistic donation obscures both the highly commercial nature of egg “donation” and the benefits to the fertility industry of controlling the price of a necessary input into many fertility services – namely, eggs. A comparison to the egg market’s closest cousin – the sperm market – does not reveal similar collusive attempts to depress the price of sperm. A further analysis of the industry explores potential reasons for this difference.

The last two articles appear in an edited online journal volume by Professor Krawiec, called Show Me the Money: Making Markets in Forbidden Exchange, which has articles on the sale of blood, organs, eggs and sperm, labor, and surrogate wombs: here's her blog post summarizing them.

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