Altruism and Career Concerns

28 Pages Posted: 1 Jul 2008 Last revised: 21 May 2009

Date Written: May 1, 2008

Abstract

The paper studies the impact of altruism on Agent’s motivation in career concerns model. The paper shows the new channel of interaction between intrinsic and extrinsic motivation: while the literature usually argues that intrinsic motivation can be crowded out by the extrinsic incentives, I show that crowding-out effect can go in the opposite direction: extrinsic incentives can be lessened for the intrinsically motivated agent.

The paper shows that altruism can decrease effort, though conventional wisdom suggests that effort should always increase with altruism. The paper also studies the effect of altruism on wage. The model has a number of other interesting features. It gives an example of winner’s blessing. It shows that ambitions can hinder altruistic relation, whereas laziness is safe for establishing altruistic relation in the future. The natural interpretation of the model is the labor contract between friends, other applications are also discussed.

Keywords: altruism, career concern, labor contract

JEL Classification: D64, D86, M5

Suggested Citation

Shchetinin, Oleg, Altruism and Career Concerns (May 1, 2008). Available at SSRN: https://ssrn.com/abstract=1154026 or http://dx.doi.org/10.2139/ssrn.1154026

Oleg Shchetinin (Contact Author)

University of Gothenburg ( email )

Box 640
Vasagatan 1, E-building, floor 5 & 6
Göteborg, 40530
Sweden

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