The structure and evolution of markets with intrinsic motivation | Andreas Lange

Andreas Lange is a Professor of Economics at the University of Hamburg and a Research Associate at the Centre for European Economic Research (ZEW). He will be presenting his paper on ‘The structure and evolution of markets with intrinsic motivation’.

Abstract

Why do firms provide quality? Intrinsic motivations for quality are common in the real world but have largely been overlooked in economic models, which focus primarily on profit motives. We construct a rich model to understand how intrinsic motivation among entrepreneurs affects the structure and evolution of markets. We solve for equilibrium configurations and identify a unique role for intrinsically motivated entrepreneurs: they can discover latent consumer preferences for quality and spur product innovation. We further show how quality standards and price policies impact quality choice both directly and indirectly by altering incentives for innovation and product differentiation.

Please email gri.events@lse.ac.uk with the name of the presenter in order to request the Zoom joining details for this workshop by by 5pm on Tuesday 16th March 2021.