DP9009 | Anti-Social Behavior in Profit and Nonprofit Organizations

Publication Date

10/03/2012

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Abstract

Two types of intrinsically motivated workers are considered: "good" workers care about the mission of an organization, whereas "bad" workers derive pleasure from destructive behavior. While missionoriented organizations take advantage of the intrinsic motivation of good workers, they are more vulnerable than profit-oriented organizations to anti-social behavior: bad workers only join them to behave badly. To prevent this, monitoring has to go up in the mission-oriented sector, while the incentives for good behavior stay the same. In the profit-oriented sector, by contrast, both monitoring and bonus payments for good behavior increase to control the damage caused by bad workers. As a result, in equilibrium bad workers are generally working in the for-profit sector where they behave like "normal" people, while good workers self select into the mission-oriented sector.