Empirical research in economics has begun to explore the idea that workers care about nonmonetary aspects of work. An increasing number of economic studies using survey and experimental methods have shown that nonmonetary incentives and nonpecuniary aspects of one’s job have substantial impacts on job satisfaction, productivity, and labor supply. By drawing on this evidence and relating it to the literature in psychology, this paper argues that work represents much more than simply earning an income: for many people, work is a source of meaning. In the next section, we give an economic interpretation of meaningful work and emphasize how it is affected by the mission of the organization and the extent to which job design fulfills the three psychological needs at the basis of self-determination theory: autonomy, competence, and relatedness. We point to the evidence that not everyone cares about having a meaningful job and discuss potential sources of this heterogeneity. We sketch a theoretical framework to start to formalize work as a source of meaning and think about how to incorporate this idea into agency theory and labor supply models. We discuss how workers’ search for meaning may affect the design of monetary and nonmonetary incentives. We conclude by suggesting some insights and open questions for future research.

Many jobs are connected to a prosocial mission—namely, to a social purpose beyond profit maximization. I use three laboratory experiments to investigate if employers can use the mission to economize on monetary incentives. In my first experiment, I exogenously vary whether the agents’ effort generates a donation to a charity of their choice (matched mission), generates a donation to a charity chosen by another subject (random mission), or generates no donation (no mission). I find that the mission, whether matched or random, increases effort compared to the no-mission condition. Consistent with the theory, nonmotivated principals exploit the agents’ motivation by offering lower piece rates, whereas very motivated principals pay higher piece rates to boost the donation. I find no difference in the effort and piece rate between the matched- and random-mission conditions. In my second experiment, I use a selected pool of motivated subjects but still observe no difference between these two treatments. In my third experiment, I explore whether the effect of mission-matching may arise through gift exchange: principals decide between choosing the mission or delegating the choice to the agent. I do not find evidence that agents who are delegated the mission choice reciprocate with higher effort. These findings suggest that while a prosocial mission allows for economizing on monetary incentives, there are no further gains from increasing the quality of the mission-matching. Data and the supplemental material are available at https://doi.org/10.1287/mnsc.2017.2903 . This paper was accepted by Uri Gneezy, behavioral economics.

, as well as the participants at the IMEBE 2013 conference, the ETH Zurich/Max Planck Workshop on the Law & Economics of Intellectual Property and Competition Law 2013 and the CSAE seminar at the University of Oxford for their useful comments and feedback. Financial support from ETH Zurich is gratefully acknowledged. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

In this paper, we design two laboratory experiments to analyze the causal effects of competition on step-by-step innovation. Innovations result from costly R&D investments and move technology up one step. Competition is inversely measured by the ex post rents for firms that operate at the same technological level, i.e. for neck and neck firms. First, we find that increased competition leads to a significant increase in R&D investments by neck and neck firms. Second, increased competition decreases R&D investments by firms that are lagging behind, in particular if the time horizon is short. Third, we find that increased competition affects industry composition by reducing the fraction of sectors where firms are neck and neck. All these results are consistent with the predictions of step-by-step innovation models.

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