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Portrait of Erik Wengström. Photo.

Erik Wengström

Director of Doctoral studies, Department of Economics, Professor

Portrait of Erik Wengström. Photo.

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

Author

  • 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.

Department/s

  • Department of Economics

Publishing year

2020-04

Language

English

Pages

648-674

Publication/Series

Scandinavian Journal of Economics

Volume

122

Issue

2

Document type

Journal article

Publisher

Wiley-Blackwell

Topic

  • Economics

Keywords

  • Competition
  • hedging
  • incentives
  • risk-taking
  • social preferences

Status

Published

ISBN/ISSN/Other

  • ISSN: 1467-9442