Gestational Surrogacy Contracts: Altruistic or Commercial? A Contract Theoretic Approach
Jadavpur University, Department of Economics; Jadavpur University, Calcutta
July 1, 2008
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.
Number of Pages in PDF File: 34
Keywords: Commercial surrogacy contracts, Altruistic surrogacy contracts, Surrogate, Intended parents, Social Ingominy
JEL Classification: I11, J13, L14, L24
Date posted: June 8, 2006 ; Last revised: September 29, 2008