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Competition and incentives with motivated agents

  • Tim Besley
  • Maitreesh Ghatak

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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File URL: http://eprints.lse.ac.uk/928/
File Function: Open access version.
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Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 928.

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Date of creation: Jun 2005
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Publication status: Published in American Economic Review, June, 2005, 95(3), pp. 616-636. ISSN: 0002-8282
Handle: RePEc:ehl:lserod:928
Contact details of provider: Postal: LSE Library Portugal Street London, WC2A 2HD, U.K.
Phone: +44 (020) 7405 7686
Web page: http://www.lse.ac.uk/

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  5. Dennis Epple & Richard Romano, 2002. "Educational Vouchers and Cream Skimming," NBER Working Papers 9354, National Bureau of Economic Research, Inc.
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  19. George A. Akerlof & Rachel E. Kranton, 2002. "Identity and Schooling: Some Lessons for the Economics of Education," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1167-1201, December.
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