Extrinsic Rewards and Intrinsic Motives: Standard and Behavioral Approaches to Agency and Labor Markets

摘要

The principal agent model supports the idea that extrinsic rewards can be an efficient means of motivating agents. The strategies firms adopt to resolve agency problems (such as conditioning pay on observed productivity) can have profound effects on labor markets by impacting gender and racial inequality, labor market segmentation, and unemployment. Research Associate James B. Rebitzer and Lowell J. Taylor, Carnegie Mellon University, analyze the principal agent model from a behavioral perspective. Conventional models assume that an agent has utility that is increasing in earnings and decreasing in the provision of effort. Behavioral models employ the same structure as conventional models but modify the agent's utility function to include additional psychological factors.