In this chapter, the authors develop a theory to explain the effects of mentoring and induction activities on new teachers' commitment, instructional quality, and effectiveness, and they describe how utility functions can express variation in these outcomes. Then they explicate the role of three-level models (i.e., with random effects) in estimating the effects of effort on commitment, instructional quality, and student achievement, with teachers nested within subgroups within schools. Unlike fixed effects models, multilevel models do not merely control for effects of social contexts (e.g., subgroups in schools); instead, they feature the capacity to simultaneously test effects at multiple levels as well as cross-level interactions. Thus, multilevel models are ideal for testing the effects on commitment, instruction, and achievement of (a) effort at the individual novice teacher level and (b) conformity at the subgroup level (Frank et al., 2008). The next section of this chapter describes the value of using utility functions to specify theory related to mentoring and induction and to determine how schools and districts can promote high levels of commitment, instructional quality, and effectiveness among beginning teachers. In the third section, the authors present their conceptual framework, define several terms that are key parts of the framework, place them in the context of the existing literature, and explain their relationship to mentoring and induction. Here they introduce the notion of subgroups to scholarship on induction and explicate how they function in relation to mentoring and other school and district factors. The fourth section defines teacher efficacy and several factors that influence the payoffs of effort, situates them in the relevant research literature, and explains their relationship to effort and various teacher and student outcomes. Finally, this chapter considers how multilevel models can be used to estimate the effects of mentoring, subgroups, and other contextual factors on student learning by testing the effects on achievement of effort at the individual novice teacher level and of conformity at the subgroup level. (Contains 5 notes.)