Risking Other People's Money : Experimental Evidence on the Role of Incentives and Personality Traits
(2020) In Scandinavian Journal of Economics 122(2). p.648-674- Abstract
- Decision makers often face incentives to increase risk‐taking on behalf of others through bonus contracts and relative performance contracts. We conduct an experimental study of risk‐taking on behalf of others using a large heterogeneous sample and find that people respond to such incentives without much apparent concern for stakeholders. Responses are heterogeneous and mitigated by personality traits. The findings suggest that lack of concern for others’ risk exposure hardly requires “financial psychopaths” in order to flourish, but is diminished by social concerns.
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/03a1fd0e-7214-4863-93f0-ee4d8f449039
- author
- Andersson, Ola LU ; Holm, Hj LU ; Tyran, Jean-Robert and Wengström, Erik LU
- organization
- publishing date
- 2020-04
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- Competition, hedging, incentives, risk-taking, social preferences
- in
- Scandinavian Journal of Economics
- volume
- 122
- issue
- 2
- pages
- 27 pages
- publisher
- Wiley-Blackwell
- external identifiers
-
- scopus:85070290927
- ISSN
- 1467-9442
- DOI
- 10.1111/sjoe.12353
- language
- English
- LU publication?
- yes
- id
- 03a1fd0e-7214-4863-93f0-ee4d8f449039
- date added to LUP
- 2019-06-18 15:42:04
- date last changed
- 2022-10-25 11:20:49
@article{03a1fd0e-7214-4863-93f0-ee4d8f449039, abstract = {{Decision makers often face incentives to increase risk‐taking on behalf of others through bonus contracts and relative performance contracts. We conduct an experimental study of risk‐taking on behalf of others using a large heterogeneous sample and find that people respond to such incentives without much apparent concern for stakeholders. Responses are heterogeneous and mitigated by personality traits. The findings suggest that lack of concern for others’ risk exposure hardly requires “financial psychopaths” in order to flourish, but is diminished by social concerns.}}, author = {{Andersson, Ola and Holm, Hj and Tyran, Jean-Robert and Wengström, Erik}}, issn = {{1467-9442}}, keywords = {{Competition; hedging; incentives; risk-taking; social preferences}}, language = {{eng}}, number = {{2}}, pages = {{648--674}}, publisher = {{Wiley-Blackwell}}, series = {{Scandinavian Journal of Economics}}, title = {{Risking Other People's Money : Experimental Evidence on the Role of Incentives and Personality Traits}}, url = {{http://dx.doi.org/10.1111/sjoe.12353}}, doi = {{10.1111/sjoe.12353}}, volume = {{122}}, year = {{2020}}, }