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Incentives, Pro-social Preferences and Discrimination

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  • Raphael Soubeyran

    (CEE-M)

Abstract

In this paper, I study how a principal can provide incentives, at minimal cost, to a group of agents who have pro-social preferences in order to induce successful coordination in the presence of network externalities. I show that agents’ pro-social preferences – specifically a preference for the sum of the agents payoffs and for the minimum payoff – lead to a decrease in the implementation cost for the principal, a decrease in the payoff of each agent, and an increase in discrimination. The model can be applied in various contexts and it delivers policy implications for designing policies that support the adoption of new technologies, for motivating a group of workers, or for inducing successful coordination of NGOs.

Suggested Citation

  • Raphael Soubeyran, 2019. "Incentives, Pro-social Preferences and Discrimination," Working Papers 2019.04, FAERE - French Association of Environmental and Resource Economists.
  • Handle: RePEc:fae:wpaper:2019.04
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    incentives; externality; principal; agents; pro-social;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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