Risking Other People?s Money

Jean-Robert Tyran, Ola Andersson, Hakan Holm and Wengström, Erik
Authors registered in the RePEc Author Service: Erik Wengström

No 9743, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study risk taking on behalf of others in an experiment on a large random sample. The decision makers in our experiment are facing high-powered incentives to increase the risk on behalf of others through hedged compensation contracts or with tournament incentives. Compared to a baseline condition without such incentives, we find that the decision makers respond strongly to these incentives that result in an increased risk exposure of others. However, we find that the increase in risk taking is mitigated by altruistic preferences and pro-social personality traits.

Keywords: Competition; Hedging; Incentives; Risk taking; Social preferences (search for similar items in EconPapers)
JEL-codes: C72 C90 D30 D81 (search for similar items in EconPapers)
Date: 2013-11
New Economics Papers: this item is included in nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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