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Altruism and Career Concerns

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  • Shchetinin, Oleg

Abstract

The paper studies the impact of altruism on Agent’s motivation in the career concerns model. The paper shows the new channel of interaction between intrinsic and extrinsic motivation. The common point in the literature is that intrinsic motivation can be crowded out by the extrinsic incentives. My paper shows that crowding effect can go in the opposite direction: extrinsic incentives can be lessened for the intrinsically motivated agent. The analysis shows that altruism can decrease effort, though conventional wisdom suggests that effort should always be higher for the more altruistic worker. The key for the result is the distinction between current and anticipated altruism. The paper also studies the effect of altruism on wage. The model has a number of other interesting features. It gives an example of winner’s blessing, it shows that ambitions can hinder altruistic relation. The model can be naturally applied to the workplace relation; another application is the local public good provision.

Suggested Citation

  • Shchetinin, Oleg, 2009. "Altruism and Career Concerns," TSE Working Papers 09-093, Toulouse School of Economics (TSE).
  • Handle: RePEc:tse:wpaper:22198
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    References listed on IDEAS

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    1. Fehr, Ernst & Falk, Armin, 2002. "Psychological foundations of incentives," European Economic Review, Elsevier, vol. 46(4-5), pages 687-724, May.
    2. Patrick Bolton & Mathias Dewatripont, 2005. "Contract Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262025760, January.
    3. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June.
    4. Bartling, Björn & von Siemens, Ferdinand A., 2010. "The intensity of incentives in firms and markets: Moral hazard with envious agents," Labour Economics, Elsevier, vol. 17(3), pages 598-607, June.
    5. Christian Grund & Dirk Sliwka, 2005. "Envy and Compassion in Tournaments," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(1), pages 187-207, March.
    6. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
    7. Amihai Glazer, 2008. "Optimal Contracts When a Worker Envies His Boss," Journal of Law, Economics, and Organization, Oxford University Press, vol. 24(1), pages 120-137, May.
    8. Bengt Holmström, 1999. "Managerial Incentive Problems: A Dynamic Perspective," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 169-182.
    9. Bengt Holmstrom, 1999. "Managerial Incentive Problems: A Dynamic Perspective," NBER Working Papers 6875, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Robert Dur & Jan Tichem, 2012. "Social Relations and Relational Incentives," Tinbergen Institute Discussion Papers 12-054/1, Tinbergen Institute.
    2. Robert Dur & Jan Tichem, 2015. "Altruism and Relational Incentives in the Workplace," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(3), pages 485-500, September.
    3. Bassi, Matteo & Pagnozzi, Marco & Piccolo, Salvatore, 2014. "Optimal contracting with altruism and reciprocity," Research in Economics, Elsevier, vol. 68(1), pages 27-38.

    More about this item

    Keywords

    extrinsic and intrinsic motivation; career concerns; altruism;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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