Erik Wengström

Studierektor forskarutbildning, Nationalekonomiska institutionen, Professor

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

Författare

Ola Andersson
Hj Holm
Jean-Robert Tyran
Erik Wengström

Summary, in English

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.

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