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Competition and Incentives with Motivated Agents

  • Besley, Timothy J.
  • Ghatak, Maitreesh

A unifying theme in the literature on organizations such as public bureaucracies and private non-profits is the importance of missions, as opposed to profit, as an organizational goal. Such mission-oriented organizations are frequently staffed by motivated agents who subscribe to the mission. This Paper studies incentives in such contexts and emphasizes the role of matching principals’ and agents’ mission preferences in increasing organizational efficiency and reducing the need for high-powered incentives. The framework developed in this Paper is applied to non-profits, school competition, and incentives in the public sector.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4641.

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Date of creation: Sep 2004
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Handle: RePEc:cpr:ceprdp:4641
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  1. Alberto Alesina & Guido Tabellini, 2004. "Bureaucrats or Politicians?," NBER Working Papers 10241, National Bureau of Economic Research, Inc.
  2. Pieter Serneels, 2010. "Who Wants to Work in a Rural Health Post? The Role of Intrinsic Motivation, Rural Background and Faith-Based Institutions in Rwanda and Ethiopia," Economics Series Working Papers CSAE WPS/2010-10, University of Oxford, Department of Economics.
  3. Kaniska Dam, 2003. "The Principal-Agent Matching Market," CESifo Working Paper Series 945, CESifo Group Munich.
  4. Daniel A. Ackerberg & Maristella Botticini, 2002. "Endogenous Matching and the Empirical Determinants of Contract Form," Journal of Political Economy, University of Chicago Press, vol. 110(3), pages 564-591, June.
  5. Timothy Besley & Maitreesh Ghatak, 2001. "Government Versus Private Ownership Of Public Goods," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1343-1372, November.
  6. Daron Acemoglu & Michael Kremer & Atif Mian, 2003. "Incentives in Markets, Firms and Governments," NBER Working Papers 9802, National Bureau of Economic Research, Inc.
  7. Canice Prendergast, 2001. "Selection and Oversight in the Public Sector, With the Los Angeles Police Department as an Example," NBER Working Papers 8664, National Bureau of Economic Research, Inc.
  8. Edward P. Lazear, 1996. "Performance Pay and Productivity," NBER Working Papers 5672, National Bureau of Economic Research, Inc.
  9. George A. Akerlof & Rachel E. Kranton, 2005. "Identity and the Economics of Organizations," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 9-32, Winter.
  10. Ballou, Jeffrey P. & Weisbrod, Burton A., 2003. "Managerial rewards and the behavior of for-profit, governmental, and nonprofit organizations: evidence from the hospital industry," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1895-1920, September.
  11. Eric A. Hanushek, 2002. "Publicly Provided Education," NBER Working Papers 8799, National Bureau of Economic Research, Inc.
  12. Philippe Aghion & Jean Tirole, 1994. "Formal and Real Authority in Organizations," Working papers 95-8, Massachusetts Institute of Technology (MIT), Department of Economics.
  13. Patrick Legros & Andrew F. Newman, 2007. "Beauty Is a Beast, Frog Is a Prince: Assortative Matching with Nontransferabilities," Econometrica, Econometric Society, vol. 75(4), pages 1073-1102, 07.
  14. Richard Arnould & Marianne Bertrand & Kevin F. Hallock, 2000. "Does Managed Care Change the Mission of Nonprofit Hospitals? Evidence From the Managerial Labor Market," NBER Working Papers 7924, National Bureau of Economic Research, Inc.
  15. Francois, Patrick, 2000. "'Public service motivation' as an argument for government provision," Journal of Public Economics, Elsevier, vol. 78(3), pages 275-299, November.
  16. Dennis Epple & Richard Romano, 2008. "Educational Vouchers And Cream Skimming," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1395-1435, November.
  17. Schmidt, Klaus M., 1996. "Managerial Incentives and Product Market Competition," CEPR Discussion Papers 1382, C.E.P.R. Discussion Papers.
  18. 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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  25. Dewatripont, Mathias & Jewitt, Ian & Tirole, Jean, 1999. "The Economics of Career Concerns, Part II: Application to Missions and Accountability of Government Agencies," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 199-217, January.
  26. Caroline M. Hoxby, 2002. "School Choice and School Productivity (or Could School Choice be a Tide that Lifts All Boats?)," NBER Working Papers 8873, National Bureau of Economic Research, Inc.
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  30. repec:dgr:uvatin:2004060 is not listed on IDEAS
  31. Hoxby, Caroline M., 1999. "The productivity of schools and other local public goods producers," Journal of Public Economics, Elsevier, vol. 74(1), pages 1-30, October.
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