Thursday, 14 October 2010

Recent Publication by Maitreesh Ghatak: Thanks for Nothing? Not-for-Profits and Motivated Agents.

This paper (joint with Hannes Mueller) has been published in the Journal of Public Economics.

We re-examine the labor donation theory of not-for-profits and show that these organizations may exist not necessarily because motivated workers prefer to work in them, or that they dominate for-profits in terms of welfare, but because the excess supply of motivated workers makes the non-profit form more attractive to managers. We show that if Firms had to compete for motivated workers then not-for-profit would be competed out by for-profit Firms. Therefore, in the choice between not-for-profit and for-profit provision, other than incentive problems, the distribution of rents between management and workers, and consequently, the relative scarcity of motivated workers may play an important role.

The paper can be found here

No comments: