Several economists have directed our attention to a finding in the social psychological literature that extrinsic motivation may undermine intrinsic motivation. The self-perception (SP) theory developed by Bem (1972) explains this finding. The crux of this theory is that people remember their...

An important role of managers is to motivate subordinates. Monetary rewards have been the focus of economic analysis. Managers also use other means to influence subordinates. If a manager can better assess the subordinate's ability than the subordinate himself, and if ability and effort are...

We develop a theory of leadership that focuses on the role managers play in motivating employees through their attitude towards employees. We model a manager's attitude as her perception about employees' abilities of successfully completing challenging tasks. We show that a positive attitude...

We study electoral competition among politicians who are heterogeneous both in competence and in how much they care about (what they perceive as) the public interest relative to the private rents from being in office. We show that politicians may have stronger incentives to behave...

We study electoral competition among politicians who are heterogeneous both in competence and in how much they care about (what they perceive as) the public interest relative to the private rents from being in office. We show that politicians? incentives to behave opportunistically increase with...

Civil servants have a reputation for being lazy. However, people's personal experiences with civil servants frequently run counter to this stereotype. We develop a model of an economy in which workers differ in laziness and in public service motivation, and characterise optimal incentive...

We study electoral competition among politicians who are heterogeneous both in competence and in how much they care about (what they perceive as) the public interest relative to the private rents from being in office. We show that politicians may have stronger incentives to behave...

This paper examines the consequences of creating a fully competitive market in a sector previously dominated by a cost-minimizing public firm. Workers in the economy are heterogeneous in their intrinsic motivation to work in the sector. In line with empirical findings, our model implies that...