Myopic Risk Taking in Tournaments

Kristoffer Eriksen () and Ola Kvaløy
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Kristoffer Eriksen: UiS, Postal: University of Stavanger, NO-4036 Stavanger, Norway

No 2012/13, UiS Working Papers in Economics and Finance from University of Stavanger

Abstract: There is a common notion that incentive schemes in the financial industry trigger myopia and risk-taking. In some sense this contrasts with the concept of myopic loss aversion (MLA), which implies that myopia mitigates risk-taking. A number of experimental studies support the MLA-hypothesis by showing that people take less risk the more frequently their investments are evaluated. In this paper we show experimentally that if subjects are exposed to tournament incentives, they take more risk the more frequently investments are evaluated.

Keywords: tournaments (search for similar items in EconPapers)
JEL-codes: A10 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2012-07-17
New Economics Papers: this item is included in nep-exp, nep-hrm and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Myopic risk-taking in tournaments (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:stavef:2012_013

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