Optimal Contracting with Endogenous Project Mission
In: CESifo Working Paper Series No. 6181
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In: CESifo Working Paper Series No. 6181
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Working paper
In: University of Zurich, Department of Economics, Working Paper No. 177
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In: The economic journal: the journal of the Royal Economic Society
ISSN: 1468-0297
Abstract
Many firms consider prosocial initiatives to be an effective tool to motivate workers. However, despite some initial supportive evidence, little is known about when and how prosocial incentives work. Our field experiment shows that the instrumental use of prosocial incentives to increase effort can backfire. The negative effect is particularly strong for performance-based prosocial incentives, which are, by construction, more instrumental than unconditional incentives, and for the workers who do not care about the charitable cause. These findings highlight some serious limitations of prosocial incentives: firms' perceived intentions and the pool of employees will be crucial for their effectiveness.
In: NBER Working Paper No. w24109
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In: CESifo Working Paper Series No. 6302
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In: IZA Discussion Paper No. 11203
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In: CEPR Discussion Paper No. DP15723
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In: NBER Working Paper No. w19987
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In: IZA Discussion Paper No. 13123
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