Electronic Resource
350 Main Street , Malden , MA 02148 , USA , and PO Box 1354, 9600 Garsington Road , Oxford OX4 2XG , UK .
:
Blackwell Publishing
Journal of economics & management strategy
13 (2004), S. 0
ISSN:
1530-9134
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Economics
Notes:
Existing models of the principal–agent relationship assume the agent works only under extrinsic incentives. However, many observed agency contracts take the form of a fixed payment. For such contracts to work, the principal must trust the agent to work in the absence of incentives. I show that agency fosters the advent of intrinsic motivation and trustworthy behavior. Three distinct motivational schemes are analyzed: norms, ethical standards, and altruism. I identify conditions under which these mechanisms arise and show how they promote trust. The analysis alters several important predictions of conventional models: (1) Better outcomes may ensue in highly uncertain environments; (2) the principal is better off the more the agent is risk averse; and (3) larger equilibrium extrinsic incentives need not be associated with larger effort or larger total surplus.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/j.1430-9134.2004.00016.x
Permalink
|
Location |
Call Number |
Expected |
Availability |