Bidimensional screening with intrinsically motivated workers

Francesca Barigozzi and N. Burani

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: We study the screening problem of a firm that needs to hire a worker to produce output and that observes neither the productive ability nor the intrinsic motivation of the job applicant. We completely characterize the set of optimal contracts according to whether motivation or ability is the main determinant of the worker s performance. We show that it is always in the firm s interest to hire all types of worker and to offer different contracts to different types of employees. Interestingly, when motivation is very high, incentives force the firm to pay higher informational rents, to increase effort distorsions for motivated workers, and to offer a strictly positive wage to workers enjoying a positive utility from effort provision, who thus become paid volunteers. These results suggest that, from the principal s viewpoint, very high motivation might not be a desirable worker s characteristic.

JEL-codes: D82 D86 J31 M55 (search for similar items in EconPapers)
Date: 2013-02
New Economics Papers: this item is included in nep-cta, nep-hrm and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:wp866

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