Risking Other People's Money: Experimental Evidence on the Role of Incentives and Personality Traits

Ola Andersson, Håkan J. Holm, Jean Robert Tyran, Erik Wengström*

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Decision-makers often face incentives to increase risk-taking on behalf of others (e.g., they are offered bonus contracts and contracts based on relative performance). We conduct an experimental study of risk-taking on behalf of others using a large heterogeneous sample, and we 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 a lack of concern for others’ risk exposure hardly requires “financial psychopaths” in order to flourish, but it is diminished by social concerns.

Original languageEnglish
Peer-reviewed scientific journalScandinavian Journal of Economics
Pages (from-to)1-27
ISSN0347-0520
DOIs
Publication statusPublished - 18.03.2019
MoE publication typeA1 Journal article - refereed

Keywords

  • 512 Business and Management
  • Competition
  • hedging
  • incentives
  • risk-taking
  • social preferences

Fingerprint Dive into the research topics of 'Risking Other People's Money: Experimental Evidence on the Role of Incentives and Personality Traits'. Together they form a unique fingerprint.

Cite this