Gestational Surrogacy Contracts: Altruistic or Commercial? A Contract Theoretic Approach

23 Pages Posted: 17 Apr 2013

See all articles by Swapnendu Banerjee

Swapnendu Banerjee

Jadavpur University, Department of Economics; Jadavpur University, Calcutta

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Date Written: June 2013

Abstract

We in this paper provide an analytical structure to endogenize the optimal gestational surrogacy contract in terms of a simple moral hazard framework. We show that altruistic surrogacy is optimal only if the surrogate has lower outside option and is sufficiently altruistic. Otherwise commercial surrogacy is optimal. We also show that for lower outside option greater social ignominy makes the surrogacy contract relatively more altruistic but the reverse happens when the surrogate has higher outside option. We also point to alternative model specifications and find situations where commercial surrogacy is always optimal irrespective of altruism, outside option and social ignominy.

Suggested Citation

Banerjee, Swapnendu, Gestational Surrogacy Contracts: Altruistic or Commercial? A Contract Theoretic Approach (June 2013). The Manchester School, Vol. 81, Issue 3, pp. 438-460, 2013, Available at SSRN: https://ssrn.com/abstract=2252377 or http://dx.doi.org/10.1111/j.1467-9957.2011.02287.x

Swapnendu Banerjee (Contact Author)

Jadavpur University, Department of Economics ( email )

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India
91-9330606340 (Phone)

Jadavpur University, Calcutta ( email )

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

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