Rank Matters-The impact of social competition on portfolio choice

Oege Dijk, Martin Holmén, Michael Kirchler

Forskningsoutput: TidskriftsbidragArtikelVetenskapligPeer review

25 Citeringar (Scopus)

Sammanfattning

Tournament incentives schemes have been criticized for inducing excessive risktaking among financial market participants. In this paper we investigate how relative performance-based incentive schemes and status concerns for higher rank influence portfolio choice in laboratory experiments. We find that both underperformers and over-performers adapt their portfolios to their current relative performance, preferring either positively or negatively skewed assets, respectively. Most importantly, these results hold both when relative performance is instrumental for higher payoffs in a tournament and when it is only intrinsically motivating and not payout-relevant. We find no effects when no relative performance information is given.
OriginalspråkEngelska
Referentgranskad vetenskaplig tidskriftEuropean Economic Review
Volym66
Sidor (från-till)97-110
ISSN0014-2921
DOI
StatusPublicerad - 2014
MoE-publikationstypA1 Originalartikel i en vetenskaplig tidskrift

Nyckelord

  • 511 Nationalekonomi
  • finansiell ekonomi
  • KOTA2013

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