Pride and Prejudice: The Human Side of Incentive Theory
Year: 2008
Type: article
Abstract: Desire for social esteem is a source of prosocial behavior. We develop a model in which actors' utility of esteem depends on the audience. In a principal-agent setting, we show that the model can account for motivational crowding out. Control systems and pecuniary incentives erode morale by signaling to the agent that the principal is not worth impressing. The model also offers an explanation for why agents are motivated by unconditionally high pay and by mission-oriented principals. (JEL D01, D82)
Source: American Economic Review
DOI: 10.1257/aer.98.3.990
Authors: Tore Ellingsen, Magnus Johannesson
Institutions: Stockholm School of Economics, Norwegian School of Economics
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1980505859