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- Title
Team Incentives under Moral and Altruistic Preferences: Which Team to Choose?
- Authors
Sarkisian, Roberto
- Abstract
This paper studies incentives provision when agents are characterized either by homo moralis preferences, i.e., their utility is represented by a convex combination of selfish preferences and Kantian morality, or by altruism. In a moral hazard in a team setting with two agents whose efforts affect output stochastically, I demonstrate that the power of extrinsic incentives decreases with the degrees of morality and altruism displayed by the agents, thus leading to increased profits for the principal. I also show that a team of moral agents will only be preferred if the production technology exhibits decreasing returns to efforts; the probability of a high realization of output conditional on both agents exerting effort is sufficiently high; and either the outside option for the agents is zero or the degree of morality is sufficiently low.
- Subjects
LABOR incentives; ALTRUISM; MORAL hazard; KANTIAN ethics; EMPLOYEE psychology; PSYCHOLOGY
- Publication
Games (20734336), 2017, Vol 8, Issue 3, p37
- ISSN
2073-4336
- Publication type
Article
- DOI
10.3390/g8030037