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Goal-oriented agents in a market

Author

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  • Macho-Stadler, Inés
  • Pérez-Castrillo, David
  • Quérou, Nicolas

Abstract

We consider a market where “standard”risk-neutral agents coexist with “goal-oriented”agents who, in addition to the expected income, seek a high-enough monetary payoff (the “trigger”) to fulfill a goal. We analyze a two-sided one-to-one matching model where the matching between principals and agents and incentive contracts are endogenous. In any equilibrium contract, goal-oriented agents are matched with the principals with best projects and receive the trigger with positive probability. Moreover, goal and monetary incentives are complementary: goal-oriented agents receive stronger monetary incentives. Finally, we discuss policy interventions in relevant environments.

Suggested Citation

  • Macho-Stadler, Inés & Pérez-Castrillo, David & Quérou, Nicolas, 2021. "Goal-oriented agents in a market," Journal of Economic Psychology, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:joepsy:v:84:y:2021:i:c:s0167487021000179
    DOI: 10.1016/j.joep.2021.102378
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    More about this item

    Keywords

    Goal-oriented agents; Incentives; Matching market;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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