We construct a simple game-theoretic model in which one private firm and one public (or state-owned) firm compete in quantity of goods produced or service provided. The private and public firms each decide how many workers with public service motivation they will employ as part of an incentive scheme. We assume that both firms produce homogeneous goods with a quadratic cost function but that the private firm is more efficient than the public firm. Both firms are faced with linear inverse demand. We show that whether public firms employ more workers with public service motivation than private firms depends on the efficiency gap between the public and private sectors. This result explains why some literature in public administration reports a significant difference in public service motivation between employees in the private and public sectors and the other literature does not.
Cite this paper
Hatada, W. and Mizuno, T. (2013) Strategic Reason for Employing Workers with Public Service Motivation. Open Journal of Political Science
, 131-133. doi: 10.4236/ojps.2013.34018
 De Fraja, G., & Delbono, F. (1989). Alternative strategies of a public enterprise in oligopoly. Oxford Economic Papers, 41, 302-311.
 Fershtman, C., & Judd, K. L. (1987). Equilibrium incentives in oligopoly. American Economic Review, 77, 927-940.
 Gabris, G. T., & Simo, G. (1995). Public sector motivation as an independent variable affecting career decisions. Public Personnel Management, 24, 33-51.
 Perry, J. L. (1996). Measuring public service motivation: An assessment of construct reliability and validity. Journal of Public Administration Research and Theory, 6, 5-22.http://dx.doi.org/10.1093/oxfordjournals.jpart.a024303
 Perry, J. L. (2000). Bringing society in: Toward a theory of publicservice motivation. Journal of Public Administration Research and Theory, 10, 471-488.http://dx.doi.org/10.1093/oxfordjournals.jpart.a024277
 Perry, J. L., & Porter, L. W. (1982). Factors affecting the context for motivation in public organizations. Academy of Management Review, 7, 89-98.
 Rainey, H. G. (1982). Reward preferences among public and private managers: In search of the service ethic. American Review of Public Administration, 16, 288-302.http://dx.doi.org/10.1177/027507408201600402
 Vickers, J. (1985). Delegation and the theory of the firm. Economic Journal, 95, 138-147.http://dx.doi.org/10.2307/2232877
 Vickers, J., & Yarrow, G. (1988). Privatization: An economic analysis. Cambridge, MA: MIT Press.
 Wittmer, D. (1991). Serving the people or serving for pay: Reward preferences among government, hybrid sector, and business managers. Public Productivity & Management Review, 14, 369-383.http://dx.doi.org/10.2307/3380953