Intrinsically Motivated Agents in Teams
In: UB Economics Working Papers E15/326
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In: UB Economics Working Papers E15/326
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Working paper
Traditional economic theory assumes that individuals are self-interested. They only care about their own well-being and disregard the impact of their actions on the others. However, the assumption of selfish individuals is unable to explain a number of important phenomena and puzzles. Individuals frequently engage in actions that are costly to themselves with no apparent reward. Behavioural economics provides plausible explanations for these actions. Individuals can be "boundedly rational" (Simon, 1955, and Kahneman et al. 1982) and/or can be driven by altruistic, equity and reciprocity considerations (see for an overview Fehr and Schmidt, 2006). Over the past decade, researchers have applied behavioural economics models to the study of organisations and how contracts should be designed in the presence of non-standard preferences and asymmetric information or incomplete contracts (see for an overview of the literature Köszegi, 2014). In my current research, I try to be at the forefront of these new behavioural economics applications into traditional industrial organisation and contract theory themes. The usual prescriptions of standard models can be misleading if potential differences in the agents' preferences are overlooked. Behavioural economics can make great progress if it takes into proper accountmarket and organisational features. ; Doctorat en Sciences économiques et de gestion ; info:eu-repo/semantics/nonPublished
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In: The B.E. journal of economic analysis & policy, Band 18, Heft 1
ISSN: 1935-1682
Abstract
Heterogeneity in intrinsic motivation affects the optimal contract offered to employees in teams. Under individual incentives, the effort exerted by both motivated and selfish employees is distorted. This distortion is mitigated if employees receive a wage based on team performance. As a result, the principal prefers to use team incentives, while motivated employees are better off with individual incentives.
In: UBEconomics Working Papers E17/366
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According to the labor donation theory, workers adhering to their firms' mission are willing to donate a portion of their paid labor. In this paper, we study how workers' fairness concerns limit the firm's ability to extract labor donation from its employees. We find that, in sectors where the firm's mission is important, optimal contracts are such that high-ability employees perceive their wage as less fair than low-ability employees and they must be rewarded with an "envy rent". The opposite is true in sectors where the firm's mission does not play a relevant role. We empirically test the predictions of the model using the German Socio-Economic Panel finding support for our theoretical results.
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In: UB Economics Working Papers E19/390
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In: International review of law and economics, Band 68, S. 106022
ISSN: 0144-8188