Arbeitspapier

Altruism and Relational Incentives in the Workplace

This paper studies how altruism between managers and employees affects relational incentive contracts. To this end we develop a simple dynamic principal-agent model where both players may have feelings of altruism or spite toward each other. The con- tract may contain two types of incentives for the agent to work hard: a bonus and a threat of dismissal. We find that altruism undermines the credibility of a threat of dis- missal but strengthens the credibility of a bonus. Among others, these two mechanisms imply that higher altruism sometimes leads to higher bonuses, while lower altruism may increase productivity and players utility in equilibrium.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 7363

Klassifikation
Wirtschaft
Organizational Behavior; Transaction Costs; Property Rights
Compensation Packages; Payment Methods
Personnel Economics: Compensation and Compensation Methods and Their Effects
Personnel Economics: Labor Contracting Devices
Thema
altruism
spite
incentives
relational contracts
efficiency wages
subjective performance evaluation
Nash bargaining

Ereignis
Geistige Schöpfung
(wer)
Dur, Robert A. J.
Tichem, Jan
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
2013

Handle
Letzte Aktualisierung
20.09.2024, 08:20 MESZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Dur, Robert A. J.
  • Tichem, Jan
  • Institute for the Study of Labor (IZA)

Entstanden

  • 2013

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