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A model of employment relation is provided in which agents choose whether to seek self-esteem through work. When they do, they develop an intrinsic motivation to effort. Depending on non-wage characteristics of the job the employer wants to fill, she can encourage this intrinsic motivation by a well-designed contract. We show that the profitability as well as the efficiency of the employment relation may depend on non-wage gratification opportunities workers get.
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- Fehr, Ernst & Falk, Armin, 2002.
"Psychological foundations of incentives,"
European Economic Review,
Elsevier, vol. 46(4-5), pages 687-724, May.
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- repec:sae:ilrrev:v:52:y:1999:i:3:p:361-392 is not listed on IDEAS
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