Pricing in vitro fertilization procedures.
This paper examines the economics of pricing practices at artificial reproductive clinics, which have introduced money-back guarantees (MBGs) for in vitro fertilization. We identify incentives for clinics to offer MBGs and evaluate the impact on couples' choices and on social welfare. Introducing MBGs allows a clinic to (i) segment couples simultaneously on their relative fertility and on risk preferences; (ii) offer quantity discounts to relatively infertile couples; and (iii) offer some risk-sharing to couples for this costly procedure, whose outcome is uncertain. Our results also show how the addition of MBGs can affect the overall social welfare.
Dukes
Anthony J
AJ
Marshall School of Business, University of Southern California, Los Angeles, CA 90089, USA. dukes@marshall.usc.edu
Tyagi
Rajeev K
RK
D000554:Ambulatory Care Facilities; D002755:Choice Behavior; D032982:Contracts / Q000191:economics*; D005249:Fees and Charges; D005260:Female; D005307:Fertilization in Vitro / Q000191:economics*; D006801:Humans; D008389:Marketing of Health Services; D015233:Models, Statistical; D012309:Risk-Taking