Incentives, pro-social preferences and discrimination
In this paper, I study how a principal can provide incentives, at minimal cost, to a group of agents who have pro-social preferences in order to induce successful coordination in the presence of network externalities. I show that agents' pro-social...
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In this paper, I study how a principal can provide incentives, at minimal cost, to a group of agents who have pro-social preferences in order to induce successful coordination in the presence of network externalities. I show that agents' pro-social preferences - specifically a preference for the sum of the agents' payoffs and/or for the minimum payoff - lead to a decrease in the implementation cost for the principal, a decrease in the payoff of each agent and an increase in discrimination. The model can be applied in various contexts and it delivers policy implications for designing policies that support the adoption of new technologies, for motivating a group of workers or for inducing successful coordination of NGOs.
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