Moral hazard and moral motivation: Corporate social responsibility as labor market screening

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Moral hazard and moral motivation: Corporate social responsibility as labor market screening

Author Info

Brekke, Kjell Arne () (The Ragnar Frisch Centre for Economic Research)
Nyborg, Karine () (The Ragnar Frisch Centre for Economic Research)

Additional information is available for the following registered author(s):

Karine Nyborg

Abstract

Morally motivated individuals behave more cooperatively than predicted by standard theory. Hence,if a firm can attract workers who are strongly motivated by ethical concerns, moral hazard problems like shirking can be reduced. We show that employers may be able to use the firm’s corporate social responsibility profile as a screening device to attract more productive workers. Both pooling and separating equilibria are possible. Even when a substantial share of the workers have no moral motivation whatsoever, such screening may in fact drive every firm with a low social responsibility profile out of business.

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Publisher Info
Paper provided by Oslo University, Department of Economics in its series Memorandum with number 25/2004.

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Length: 32 pages
Date of creation: 06 Apr 2005
Date of revision:
Publication status: Published in Resource and Energy Economics, 2008, pages 509-526.
Handle: RePEc:hhs:osloec:2004_025

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Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
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Web page: http://www.oekonomi.uio.no/indexe.html
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Find related papers by JEL classification:
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
D62 - Microeconomics - - Welfare Economics - - - Externalities
D64 - Microeconomics - - Welfare Economics - - - Altruism
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

This paper has been announced in the following NEP Reports:

NEP-ACC-2005-04-16 (Accounting & Auditing)
NEP-ALL-2005-04-16 (All new papers)
NEP-LTV-2005-04-16 (Unemployment, Inequality & Poverty)
NEP-MIC-2005-04-16 (Microeconomics)

References listed on IDEAS
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Kjetil Telle, 2006. "“It Pays to be Green” – A Premature Conclusion?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 35(3), pages 195-220, November. [Downloadable!] (restricted)
Other versions:
- Kjetil Telle, Iulie Aslaksen and Terje Synnestvedt, 2004. ""It pays to be green" - a premature conclusion?," Discussion Papers 394, Research Department of Statistics Norway. [Downloadable!]
Thomas P. Lyon & John W. Maxwell, 2007. "Corporate Social Responsibility and the Environment: A Theoretical Perspective," Working Papers 2007-16, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy. [Downloadable!]
Other versions:
- Thomas P. Lyon & John W. Maxwell, 2008. "Corporate Social Responsibility and the Environment: A Theoretical Perspective," Review of Environmental Economics and Policy, Oxford University Press for Association of Environmental and Resource Economists, vol. 2(2), pages 240-260, Summer. [Downloadable!] (restricted)
Martin Daniel Siyaranamual, 2007. "The Economics of Corporate Social Responsibility (CSR): Selling to Someone who Has Personal Valuation," Working Papers in Economics and Development Studies (WoPEDS) 200706, Department of Economics, Padjadjaran University, revised Jun 2007. [Downloadable!]
Jérôme Ballet & Damien Bazin & Abraham Lioui & David Touahri, 2006. "Taxation and The Crowding-Out Effect of Corporate Social Responsibility," Post-Print halshs-00113856_v1, HAL. [Downloadable!]
Markus Kitzmueller, 2008. "Economics and Corporate Social Responsibility," Economics Working Papers ECO2008/37, European University Institute. [Downloadable!]

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