 Team Incentives under Moral and Altruistic Preferences: Which Team to Choose?Roberto Sarkisian
Games, 2017, vol. 8, issue 3, 1-24 Abstract: 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. Keywords: moral hazard in teams; optimal contracts; homo moralis preferences; altruism (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:gam:jgames:v:8:y:2017:i:3:p:37-:d:110961 Access Statistics for this article Games is currently edited by Ms. Susie Huang More articles in Games from MDPI |
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