Shchetinin, Oleg (2008): Altruism and Career Concern.Full text not available from this repository.
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|
|Original Title:||Altruism and Career Concern|
|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
|Depositing User:||Oleg Shchetinin|
|Date Deposited:||02. Jul 2008 00:45|
|Last Modified:||11. Feb 2013 10:11|
 J. Andreoni. Philanthropy, in Handbook of the Economics of Giving, Altruism and Reciprocity, volume 2. Amsterdam, North Holland, 2006.
 B. Bartling and F. von Siemens. The Intensity of Incentives in Firms and Markets: Moral Hazard with Envious Agents. LMU Discussion Papers in Economics, 14, 2006.
 R. B´enabou and J. Tirole. Incentives and prosocial behavior. American Economic Review, 96(5):1652–1678, 2006.
 P. Bolton and M. Dewatripont. Contract Theory. MIT Press, 2005.
 AJ Dur and A. Glazer. Optimal Incentive Contracts when Workers envy their Boss. 2004.
 A. Falk and M. Kosfeld. The Hidden Costs of Control. American Economic Review, 96(5):1611–1630, 2006.
 E. Fehr and A. Falk. Handbook of the Economics of Giving, Altruism and Reciprocity, volume 2, chapter ”Psychological foundations of incentives”. Elseiver, 2006.
 E. Fehr and K.M. Schmidt. Advances in Economics and econometrics, volume 1, chapter Theories of Fairness and Reciprocity: Evidence and Economic Application, pages 208–257. Cambridge University Press, 2003.
 A.M. Goel and A.V. Thakor. Optimal Contracts When Agents Envy Each Other. manuscript, Olin School of Business, 2003.
 C. Grund and D. Sliwka. Envy and Compassion in Tournaments. Journal of Economics & Management Strategy, 14(1):187–207, 2005.
 B. Holmstrom. Managerial Incentive Problems: A Dynamic Perspective. Review of Economic Studies, 66(1):169–182, 1999.
 H. Itoh. Moral Hazard and Other-Regarding Preferences. The Japanese Economic Review, 55(1):18–45, 2004.
 J.J. Laﬀont and D. Martimort. The Theory of Incentives: The Principal- Agent Model. Princeton University Press, 2002.
 J.J. Rotemberg. Human Relations in the Workplace. The Journal of Political Economy, 102(4):684–717, 1994.
 Julio Rotemberg. Handbook of the Economics of Giving, Altruism and Reciprocity, volume 2, chapter ”Altruism, Reciprocity and Cooperation in the Workplace”. Elseiver, 2006.
 Dirk Sliwka. On the Hidden Costs of Incentive Schemes.