Moral Hazard and Clear Conscience
Topi Miettinen
Journal of Institutional and Theoretical Economics (JITE), 2011, vol. 167, issue 2, 224-235
Abstract:
The paper studies theoretically how the optimal contract in the hidden-action moral-hazard model is affected when an agent feels bad when not reaching a target effort set in the contract. In equilibrium, the agent's effort falls short of the target, inducing guilt, which must be compensated by a higher financial reward. Thus, although the principal's payoff is higher, the agent receives a part of the monetary rents accruing to intrinsic motivation. This result differs markedly from previous contributions on contracting under social preference or pro-social motivation.
JEL-codes: C72 D82 Z13 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://www.mohrsiebeck.com/en/article/moral-hazar ... 28093245611796589960 (text/html)
Fulltext access is included for subscribers to the printed version.
Related works:
Working Paper: Moral Hazard and Clear Conscience (2009) 
Working Paper: Moral Hazard and Clear Conscience (2007) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:mhr:jinste:urn:sici:0932-4569(201106)167:2_224:mhacc_2.0.tx_2-c
Ordering information: This journal article can be ordered from
Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany
Access Statistics for this article
Journal of Institutional and Theoretical Economics (JITE) is currently edited by Gerd Mühlheußer and Bayer, Ralph-C
More articles in Journal of Institutional and Theoretical Economics (JITE) from Mohr Siebeck, Tübingen
Bibliographic data for series maintained by Thomas Wolpert ().