Armouti-Hansen, Jesper and Cassar, Lea and Dereky, Anna and Engl, Florian (2024) Efficiency wages with motivated agents. GAMES AND ECONOMIC BEHAVIOR, 145. pp. 66-83. ISSN 0899-8256, 1090-2473
Full text not available from this repository. (Request a copy)Abstract
Many jobs serve a social purpose beyond profit maximization, contributing positively to society. This paper uses a modified principal -agent gift -exchange game with positive externality (prosocial treatment) to study how workers' prosocial motivation interacts with the use of efficiency wages in stimulating effort. We find that prosocial motivation and efficiency wages are independent in stimulating effort: compared to a standard gift -exchange game (GE treatment), the presence of the externality shifts the agents' effort choice function upwards without affecting its slope. Thus, if principals were profit -maximizers, wage offers should be the same in both treatments. However, principals offer higher wages in the prosocial treatment. We show that this is due to principals in the GE treatment highly underestimating agents' reciprocity and thereby offering wages below the profit -maximizing level. Results from robustness -checks further suggest that our findings are unlikely to be driven by a simple efficiency effect.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | SOCIAL PREFERENCES; GIFT EXCHANGE; INTRINSIC MOTIVATION; IMPURE ALTRUISM; SELF-SELECTION; WORK; INCENTIVES; LABOR; RECIPROCITY; FAIRNESS; Prosocial motivation; Gift exchange; Biased beliefs; Efficiency wages |
| Subjects: | 300 Social sciences > 330 Economics |
| Divisions: | Business, Economics and Information Systems > Institut für Volkswirtschaftslehre und Ökonometrie > Lehrstuhl für Empirische Wirtschaftsforschung - Prof. Lea Cassar Business, Economics and Information Systems > Institut für Volkswirtschaftslehre und Ökonometrie > Lehrstuhl für Wirtschaftspsychologie und -Ethiki - Prof. Dr. Florian |
| Depositing User: | Dr. Gernot Deinzer |
| Date Deposited: | 14 Jul 2025 12:58 |
| Last Modified: | 14 Jul 2025 12:58 |
| URI: | https://pred.uni-regensburg.de/id/eprint/64029 |
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