We examine the power of incentives in bureaucracies by studying contracts offered by a bureaucrat to her agent. The bureaucrat operates under a fixed budget, optimally chosen by a funding authority, and she can engage in policy drift, which we define as inversely related to her intrinsic...

The motivation crowding effect suggests that an external intervention via monetary incentives or punishments may undermine (and under different indentifiable conditions strengthen) intrinsic motivation. As of today, the theoretical \lang1033 possibility of crowding effects is widely accepted...

Awards in the form of orders, medals, decorations and titles are ubiquitous in monarchies and republics, private organizations, not-for-profit and profit-oriented firms. Nevertheless, economists have disregarded this kind of non-material extrinsic incentive. The demand for awards relies on an...

Corporate scandals, reflected in excessive management compensation and fraudulent accounts, cause considerable damage. Agency theory’s insistence on linking the compensation of managers and directors as closely as possible to firm performance is a major reason for these scandals. They cannot...

This paper analyzes awards as a means of motivation prevalent in the scientific community, but so far neglected in the economic literature on incentives, and discusses their relationship to monetary compensation. Awards are better suited than performance pay to reward scientific tasks, which are...

When the information used by a principal to monitor an agent is private, and thus non-verifiable by a third party, the principal has a credibility issue with the agent. The agent should be concerned that the principal could misrepresent the information in order to collect a monetary penalty from...

The motivation crowding effect suggests that an external intervention via monetary incentives or punishments may undermine (and under different indentifiable conditions strengthen) intrinsic motivation. As of today, the theoretical possibility of crowding effects is widely accepted among...