This paper studies how altruism between managers and employees affects relational incentive contracts. To this end we …. The contract may contain two types of incentives for the agent to work hard: a bonus and a threat of dismissal. We find …

contract distortions reduce aggregate welfare, a majority of society may be better off as public goods come at a lower cost …

contract distortions reduce aggregate welfare, a majority of society may be better off as public goods come at a lower cost …

convinced that their manager cares for them. Managers can signal their altruistic feelings towards their employees in two ways … altruistic managers may offer lower wages and nevertheless build up better social-exchange relationships with their employees … than egoistic managers do. In such equilibria, a low wage signals to employees that the manager has something else to offer …

brightest managers to the public sector abound. This paper studies self-selection into managerial positions in the public and … ability is always higher in the private sector. As a result, relatively many of the more able managers self-select into the …

convinced that their manager cares for them. Managers can signal their altruistic feelings towards their employees in two ways … altruistic managers may offer lower wages and nevertheless build up better social-exchange relationships with their employees … than egoistic managers do. In such equilibria, a low wage signals to employees that the manager has something else to offer …

brightest managers to the public sector abound. This paper studies self-selection into managerial and non-managerial positions … return to managerial ability is always highest in the private sector. As a result, relatively many of the more able managers …

contract distortions reduce aggregate welfare, a majority of society may be better off as public goods come at a lower cost. …

brightest managers to the public sector abound. This paper studies self-selection into managerial and non-managerial positions … return to managerial ability is always highest in the private sector. As a result, relatively many of the more able managers …