Altruism and Career Concern

Shchetinin, Oleg (2008): Altruism and Career Concern.

Abstract

The paper studies the impact of altruism on Agent's motivation in the career concerns model. The main result is that higher altruism can decrease effort though conventional wisdom suggests the opposite should always the case. The key for the result is the distinction between current and anticipated altruism. The current altruism stimulates the Agent because it makes him partially internalize the Principal's benefit from output. More subtle, the anticipated altruism weakens effort because it lessens career concerns.

The paper contributes to the literature on interaction between intrinsic and extrinsic motivation. It gives an example when intrinsic motivator (altruism) lessens extrinsic motivation (career concerns).

The model has a number of other interesting features. It gives an example of winner's blessing. It shows that if the worker pushes himself too hard trying to pretend more skilled, it can hinder altruistic relationship. Whereas if the worker shirks, his laziness is safe for establishing altruistic relation in the future. The natural interpretation of the model is labor contract between friends, other applications are also discussed.

• Item Type: MPRA Paper
• Language: English
• Keywords: career concern, altruism, labor contract, intrinsic motivation
• Subjects: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D86 - Economics of Contract: Theory; D - Microeconomics > D6 - Welfare Economics > D64 - Altruism; Philanthropy; M - Business Administration and Business Economics; Marketing; Accounting > M5 - Personnel Economics > M50 - General

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