In this lecture we will review an emerging literature on incentives, organizational design, and nature of competition among organizations when agents are motivated by a range of non-pecuniary factors, ranging from intrinsic to pro-social motivation going beyond usual financial incentives or career concerns. Drawing on my own work and that of others we will cover some existing canonical models and then point to future research directions.  The lecture will cover specific topics like matching, mission integrity, dynamics of motivation, and the role of competition by setting up a core framework of a principal-agent model where agents have non-pecuniary motivations and then extending it in various directions. Some of the applications will include CSR or ESG goals of standard firms, nonprofits and social enterprises, and incentives for employees in organizations, can competition undermine mission-oriented activities, and how motivation of the workforce evolve over time depending on the incentive structure of an organization.

Reading List

Besley, T., M. Ghatak, and L. Xu (2025): Organizational Purpose and the Dynamics of Motivation, (with T. Besley and L. Xu). Working Paper.  

Ghatak, M. and Z. Wahhaj (2025):  Motivational Investments and Financial Incentives, Forthcoming, Journal of Law, Economics, and Organization.

Besley, T. and  M. Ghatak (2018): Pro-social Motivation and Incentives, Annual Reviews of Economics, Volume 10, pp 411-438, 2018.

Besley, T. and  M. Ghatak (2017): Profit with Purpose? A Theory of Social Enterprise . American Economic Journal - Economic Policy. Volume 9, Number 3, August 2017, Pages 19-58.

Besley, T. and  M. Ghatak (2005):  Competition and Incentives with Motivated Agents , American Economic Review, June 2005.

Besley, T. and  M. Ghatak (2001):   Government versus Private Ownership of Public Goods, Quarterly Journal of Economics, Vol. 116, No. 4, p.1343 – 1372, November 2001.

Besley, T. and  M. Ghatak (2017):    Public-Private Partnership for the Provision of Public Goods: Theory and an Application to NGOs Research in Economics, Volume 71, Issue 2, June 2017, pp 356–371. 

Besley, T. and  M. Ghatak (2008): Status Incentives, American Economic Review, Papers and Proceedings, May 2008.