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Thanks for nothing? Not-for-profits and motivated agents

Maitreesh Ghatak () and Hannes Mueller

Journal of Public Economics, 2011, vol. 95, issue 1-2, 94-105

Abstract: We re-examine the labor donation theory of not-for-profits and show that these organizations may exist not necessarily because motivated workers prefer to work in them, or that they dominate for-profits in terms of welfare, but because the excess supply of motivated workers makes the non-profit form more attractive to managers. We show that if firms had to compete for motivated workers then not-for-profit firms would be competed out by for-profit firms. Therefore, in the choice between not-for-profit and for-profit provision, other than incentive problems, the distribution of rents between management and workers, and consequently, the relative scarcity of motivated workers may play an important role.

Keywords: Not-for-profits; Intrinsic; motivation; Labor; donation; Free-riding (search for similar items in EconPapers)
Date: 2011
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Journal Article: Thanks for nothing? Not-for-profits and motivated agents (2011) Downloads
Working Paper: Thanks for Nothing? Not-for-Profits and Motivated Agents (2010) Downloads
Working Paper: Thanks for Nothing? Not-for-Profits and Motivated Agents (2009) Downloads
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