Team incentives under moral and altruistic preferences: Wich team to choose?

Artikel

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Games ; ISSN: 2073-4336 ; Volume: 8 ; Year: 2017 ; Issue: 3 ; Pages: 1-24 ; Basel: MDPI

Classification and Topics

• Classification: Wirtschaft
• Subject: moral hazard in teams ; optimal contracts ; homo moralis preferences ; altruism

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sarkisian, Roberto
• Event: Veröffentlichung
• (who): MDPI
• (where): Basel
• (when): 2017

Further information

• DOI: doi:10.3390/g8030037
• Handle: http://hdl.handle.net/10419/179147
• Last update: 10.03.2025, 11:44 AM CET