Team Incentives under Moral and Altruistic Preferences: Which Team to Choose?
AbstractThis 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. View Full-Text
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Sarkisian, R. Team Incentives under Moral and Altruistic Preferences: Which Team to Choose? Games 2017, 8, 37.
Sarkisian R. Team Incentives under Moral and Altruistic Preferences: Which Team to Choose? Games. 2017; 8(3):37.Chicago/Turabian Style
Sarkisian, Roberto. 2017. "Team Incentives under Moral and Altruistic Preferences: Which Team to Choose?" Games 8, no. 3: 37.
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