Call to Action: Intrinsic Motives and Material Interests

Abstract

We provide a game-theoretic account of endogenous intrinsic motivation within a principal⁻agent framework. We explore the incentives of an altruistic principal who, by exerting costly effort, can intrinsically motivate a present-biased agent to exhibit a direct preference for more far-sighted behaviour. We characterize the conditions under which this happens. We show that allowing for endogenous intrinsic motivation generates interesting interplays between exogenous economic incentives and endogenous motivation, including the possibility of crowding out. Our model can be applied in a wide variety of contexts, including public policy, self-control, and cultural transmission.

Keywords

• endogenous preferences
• present bias