Pro-social Motivations, Externalities and Incentives

Raphael Soubeyran

Working Papers from HAL

Abstract: This paper analyzes how pro-social motivations shape the relationship between incentives and inequality. I consider a principal who offers individual rewards to a group of agents to induce them to exert effort and to coordinate at least-cost. The agents value the payoffs of the other agents, and they are averse to inequality. My analysis highlights that pro-social motivations have an a priori ambiguous effect on inequality in the reward distribution. Despite this initial ambiguity, I show that the rewards are more unequal and lower when the agents have pro-social preferences. The model delivers empirical implications for intervention programs supporting the adoption of new health or agricultural technologies.

Keywords: incentives; externality; principal; agents; coordination; pro-social preferences (search for similar items in EconPapers)
Date: 2021-04-30
New Economics Papers: this item is included in nep-agr and nep-evo
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-03212888v2
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Working Paper: Pro-social Motivations, Externalities and Incentives (2021)
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