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Gestational Surrogacy Contracts: Altruistic or Commercial ?

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  • Swapnendu Banerjee

Abstract

The paper provides an analytical structure to endogenize the optimal gestational surrogacy contract in terms of a simple moral hazard framework. The study shows 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. The author explores alternative model specifications and find a case where commercial surrogacy is always optimal irrespective of altruism, outside option and social ignominy.

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Bibliographic Info

Paper provided by eSocialSciences in its series Working Papers with number id:1811.

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Date of creation: Dec 2008
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Handle: RePEc:ess:wpaper:id:1811

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Web page: http://www.esocialsciences.org

Related research

Keywords: Intended parents; reproduction; parenthood; child; children; India; altruism; cultural; traditional; ethical; legal; economic; mother; wife; sociological Social ignominy.Commercial surrogacy contracts; Altruistic surrogacy contracts; Surrogate;

References

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  1. Patrick Bolton & Mathias Dewatripont, 2005. "Contract Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262025760.
  2. Roland Benabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," Review of Economic Studies, Wiley Blackwell, vol. 70(3), pages 489-520, 07.
  3. Besley, Tim & Ghatak, Maitreesh, 2005. "Competition and incentives with motivated agents," Open Access publications from London School of Economics and Political Science http://eprints.lse.ac.uk/, London School of Economics and Political Science.
  4. Kevin Murdock, 2002. "Intrinsic Motivation and Optimal Incentive Contracts," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 650-671, Winter.
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