Competition and Incentives with Motivated Agents

Besley, Timothy J.; Ghatak, Maitreesh

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Competition and Incentives with Motivated Agents

34 Pages Posted: 18 Nov 2004

See all articles by Timothy J. Besley

Timothy J. Besley

London School of Economics & Political Science (LSE) - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Maitreesh Ghatak

London School of Economics (LSE) - Department of Economics

There are 2 versions of this paper

Date Written: September 2004

Abstract

A unifying theme in the literature on organizations, such as public bureaucracies and private non-profits, is the importance of missions, as opposed to profit, as an organizational goal. Such mission-oriented organizations are frequently staffed by motivated agents who subscribe to the mission. This Paper studies incentives in such contexts and emphasizes the role of matching principals' and agents' mission preferences in increasing organizational efficiency and reducing the need for high-powered incentives. The framework developed in this Paper is applied to non-profits, school competition, and incentives in the public sector.

Keywords: Competition, incentives, non-profits

JEL Classification: D23, H10, L31

Suggested Citation: Suggested Citation

Besley, Timothy J. and Ghatak, Maitreesh, Competition and Incentives with Motivated Agents (September 2004). Available at SSRN: https://ssrn.com/abstract=622082