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

34 Pages Posted: 8 Jun 2006 Last revised: 29 Sep 2008

Swapnendu Banerjee

Jadavpur University, Department of Economics; Jadavpur University, Calcutta

Multiple version iconThere are 2 versions of this paper

Date Written: July 1, 2008

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 explore alternative model specifications and find a case where commercial surrogacy is always optimal irrespective of altruism, outside option and social ignominy.

Keywords: Commercial surrogacy contracts, Altruistic surrogacy contracts, Surrogate, Intended parents, Social Ingominy

JEL Classification: I11, J13, L14, L24

Suggested Citation

Banerjee, Swapnendu, Gestational Surrogacy Contracts: Altruistic or Commercial? A Contract Theoretic Approach (July 1, 2008). Available at SSRN: https://ssrn.com/abstract=907271 or http://dx.doi.org/10.2139/ssrn.907271

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)

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