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Team Incentives under Moral and Altruistic Preferences: Which Team to Choose? by Roberto Sarkisian is a Social Sciences article available to read on EtoBox.

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This paper studies incentives provision when agents are characterized either by homo moralis preferences, i.e., their utility is represented by a convex combination of selfish preferences and Kantian morality, or by altruism. In a moral hazard in a team setting with two agents whose efforts affect output stochastically, I demonstrate that the power of extrinsic incentives decreases with the degrees of morality and altruism displayed by the agents, thus leading to increased profits for the principal. I also show that a team of moral agents will only be preferred if the production technology exhibits decreasing returns to efforts; the probability of a high realization of output conditional on both agents exerting effort is sufficiently high; and either the outside option for the agents is zero or the degree of morality is sufficiently low. ## Keywords : moral hazard in teams; optimal contracts; homo moralis preferences; altruism See the Society for Human Resource Management survey results at https://www.shrm.org/hr-today/trends-andforecasting/research-and-surveys/Pages/creditbackgroundchecks.aspx 4 See, for instance, [2].

Who reads Team Incentives under Moral and Altruistic Preferences: Which Team to Choose??

Author

Roberto Sarkisian

Publisher

MDPI AG

Published

2017

Language

EN

Field

Social Sciences