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Incentives, Self-Selection, and Coordination of Motivated Agents for the Production of Social Goods

Kevin Bauer (), Michael Kosfeld () and Ferdinand von Siemens ()
Additional contact information
Kevin Bauer: Leibniz Institute for Financial Research SAFE
Michael Kosfeld: Goethe University Frankfurt
Ferdinand von Siemens: University of Amsterdam

No 14595, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We study, theoretically and empirically, the effects of incentives on the self-selection and coordination of motivated agents to produce a social good. Agents join teams where they allocate effort to either generate individual monetary rewards (selfish effort) or contribute to the production of a social good with positive effort complementarities (social effort). Agents differ in their motivation to exert social effort. Our model predicts that lowering incentives for selfish effort in one team increases social good production by selectively attracting and coordinating motivated agents. We test this prediction in a lab experiment allowing us to cleanly separate the selection effect from other effects of low incentives. Results show that social good production more than doubles in the low-incentive team, but only if self-selection is possible. Our analysis highlights the important role of incentives in the matching of motivated agents engaged in social good production.

Keywords: incentives; intrinsic motivation; self-selection; public service (search for similar items in EconPapers)
JEL-codes: C91 D90 J24 J31 M52 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2021-07
New Economics Papers: this item is included in nep-isf
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