Anti-social behavior in profit and nonprofit organizations

Two types of intrinsically motivated workers are considered: “good” workers care about the mission of an organization, whereas “bad” workers derive pleasure from destructive behavior. Compared to the case with only good motivated workers, the mission-oriented sector has to resort to higher monitoring to deter bad workers from entering the sector. In equilibrium, bad workers work in the for-profit sector where they behave like “normal” people, while good workers self-select into the mission-oriented sector. In the profit-oriented sector, both monitoring and bonus payments for good behavior increase to control the damage caused by bad workers. The results of the paper are illustrated by examples from child care and the threat posed by pedophiles in this sector. •We consider two types of intrinsic motivation, good and bad.•Good types are interested in a positive mission, bad types in acts of sabotage.•A priori, nonprofits are more vulnerable to sabotage unless they increase monitoring.•Nonprofits lose much of their cost advantage through higher monitoring costs.•In general, bad types are in the for profit sector, behaving like regular workers.