Altruism and Career Concern
AbstractThe 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.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 9414.
Date of creation: Jul 2008
Date of revision:
career concern; altruism; labor contract; intrinsic motivation;
Other versions of this item:
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- M50 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-07-05 (All new papers)
- NEP-BEC-2008-07-05 (Business Economics)
- NEP-CBE-2008-07-05 (Cognitive & Behavioural Economics)
- NEP-CTA-2008-07-05 (Contract Theory & Applications)
- NEP-EVO-2008-07-05 (Evolutionary Economics)
- NEP-LAB-2008-07-05 (Labour Economics)
- NEP-SOC-2008-07-05 (Social Norms & Social Capital)
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