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 …

, managers therefore need to think about how to create and preserve high-quality co-worker relationships. This paper develops a …

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 …

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

This paper studies how social relationships between managers and employees affect relational incentive contracts. To … each other. The contract may contain two types of incentives for the agent to work hard: a bonus and a threat of dismissal …