Moral hazard and moral motivation: Corporate social responsibility as labor market screening

Kjell Arne Brekke and Karine Nyborg

No 25/2004, Memorandum from Oslo University, Department of Economics

Abstract: Morally motivated individuals behave more cooperatively than predicted by standard theory. Hence,if a firm can attract workers who are strongly motivated by ethical concerns, moral hazard problems like shirking can be reduced. We show that employers may be able to use the firm’s corporate social responsibility profile as a screening device to attract more productive workers. Both pooling and separating equilibria are possible. Even when a substantial share of the workers have no moral motivation whatsoever, such screening may in fact drive every firm with a low social responsibility profile out of business.

Keywords: Self-image; teamwork; shirking; voluntary abatement (search for similar items in EconPapers)
JEL-codes: D21 D62 D64 J31 Q50 Z13 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2005-04-06
New Economics Papers: this item is included in nep-acc, nep-ltv and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Published in Resource and Energy Economics, 2008, pages 509-526.

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