Small is Beautiful: Motivational Allocation in the Nonprofit Sector

Aldashev, Gani; Jaimovich, Esteban; Verdier, Thierry

doi:10.1093/jeea/jvx024

Cited by 21 publications

(19 citation statements)

References 58 publications

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“…That is, a worker receives a 'warm-glow'utility from making a contribution to the well-being of others, but he does not directly care about other's utility. This approach is in line with earlier related models such as Besley and Ghatak (2005), Delfgaauw and Dur (2008), Dur and Zoutenbier (2015), and Aldashev et al (2016). 4 Tonin and Vlassopoulos (2010) provide …eld-experimental evidence supporting this assumption.…”

Section: Modelsupporting

confidence: 88%

“…Lastly, in line with the literature, we use several de…nitions of what a public service job exactly is. 3 Consistent with our theory, we …nd that workers who are more altruistic are more likely to take a public service job and, for a given job type, donate a higher amount to charity. Furthermore, we …nd that workers in a regular job make signi…cantly higher donations to charity than equally altruistic workers in a public service job.…”

Section: Introductionsupporting

confidence: 81%

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Serving the public interest in several ways: Theory and empirics

Dur

Lent

2018

Labour Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract We develop a model where people di¤er in their altruistic preferences and can serve the public interest in two ways: by making donations to charity and by taking a public service job and exerting e¤ort on the job. Our theory predicts that people who are more altruistic are more likely to take a public service job and, for a given job, make higher donations to charity. Comparing equally altruistic workers, those with a regular job make higher donations to charity than those with a public service job by a simple substitution argument. We subsequently test these predictions using the German Socio-Economic Panel Study, which contains data on self-reported altruism, sector of employment, and donations to charity for more than 7,500 workers. We …nd support for our predictions, though some results are sensitive to the exact de…nition of a public service job or the estimation method. Terms of use: Documents in

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Section: Modelsupporting

confidence: 88%

Section: Introductionsupporting

confidence: 81%

Serving the public interest in several ways: Theory and empirics

Dur

Lent

2018

Labour Economics

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“…Our focus …ts into a broader line of research that models motivation beyond more standard sel…sh goals. 3 The review develops an organizing framework for studying the link between motivation and incentives. It joins the theory of contracts and organizations with the focus in public economics focus on providing goods and services with social bene…ts e¢ ciently.…”

Section: Introductionmentioning

confidence: 99%

“…This distinguishes our approach from that of behavioral economics. 3 See, for example, Akerlof and Kranton, (2010), Benabou and Tirole, (2006), Besley and Ghatak, (2005), Bowles, (1998Bowles, ( , 2016, Kamenica, (2012), Murdock, (2003), and Sen (1977). 4 While our focus will be on applications where there are social bene…ts that are external to the organization, it can also be applied to cases where these bene…ts are largely be localized to the organization and are valued mostly by those who are associated with the …rm.…”

Section: Introductionmentioning

confidence: 99%

Prosocial Motivation and Incentives

Besley

Ghatak

2018

Annu. Rev. Econ.

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This paper explores the role of incentives in providing goods and services that have signi…cant social returns not captured in private returns which tend to be in environments where outcomes and performances are not easy to measure, and pro-social motivation plays an important role. We discuss how the presence of pro-motivation among agents involved in the provision of these goods and services changes the design of incentives. The paper also emphasises how heterogeneous pro-social motivation puts a premium on selection of agents in this context. We also discuss alternative theories of pro-social motivation.

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“…Theoretical contributions on the effect of competition between motivated agents have focused on private fund-raising (Aldashev and Verdier (2010); Aldashev et al (2013)), matching with mission-oriented organizations Ghatak (2005, 2006)), organizational choice Mueller (2011, 2013)) and corporate culture (Kosfeld and von Siemens (2011)). An exception is Chau and Huysentruyt (2006), which studies non-profits' competition for a procurement contract.…”

Section: Introductionmentioning

confidence: 99%

Optimal Contracting with Endogenous Project Mission

Cassar

2016

SSRN Journal

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Empirical evidence shows that workers care about the mission of their job in addition to their wage. This suggests that employers can use the job mission to incentivize and screen their workers. I study a model in which a principal selects an agent to develop a project and influences the agent's ex post level of effort not by outcome-contingent rewards, but by the choice of the project mission. The principal's and the agents' preferences about the mission are misaligned and the degree to which an agent cares about the mission is private information. I derive the optimal mechanism (allocation rule, project mission, payment) to select and motivate the agent. I show that under the optimal mechanism the project mission is distorted towards the principal's ideal mission compared to the full information optimum. As a consequence, effort is lower. If the mission must be chosen prior to the allocation of the project, competition brings the principal to align the mission more with the agent's preferences, which increases his effort. Finally, in the presence of budget constraints, the principal should offer the same mission and the same payment to all types of agents. Several applications and links to the empirical evidence are discussed. JEL Classification Codes: H41, D23, D82, M52

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Small is Beautiful: Motivational Allocation in the Nonprofit Sector

Cited by 21 publications

References 58 publications

Serving the public interest in several ways: Theory and empirics

Serving the public interest in several ways: Theory and empirics

Prosocial Motivation and Incentives

Optimal Contracting with Endogenous Project Mission

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