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

doi:10.1111/sjoe.12353

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

Economics, Helsinki

Research output: Contribution to journal › Article › Scientific › peer-review

10 Citations (Scopus)

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 language	English
Peer-reviewed scientific journal	Scandinavian Journal of Economics
Pages (from-to)	1-27
ISSN	0347-0520
DOIs	https://doi.org/10.1111/sjoe.12353
Publication status	Published - 18.03.2019
MoE publication type	A1 Journal article - refereed

Keywords

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

Areas of Strength and Areas of High Potential (AoS and AoHP)

AoS: Competition economics and service strategy - Quantitative consumer behaviour and competition economics

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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

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AU - Wengström, Erik

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

Abstract

Keywords

Areas of Strength and Areas of High Potential (AoS and AoHP)

UN SDGs

Access to Document

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