Working Paper No. 989

Risking Other People’s Money: Experimental Evidence on Bonus Schemes, Competition, and Altruism

Published: November 19, 2013Pages: 49Keywords: Incentives; Competition; Hedging; Risk taking; Social preferencesJEL-codes: C72; C90; D30; D81

Risking Other People’s Money: Experimental Evidence on Bonus Schemes, Competition, and Altruism Ola Andersson, Håkan J. Holm, Jean-Robert Tyran and Erik Wengström

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.


Ola Andersson


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Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

Sick of Inequality.jpg

In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?


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To present ongoing research informal brown-bag seminars are held on Mondays at 11:30 am. This is an opportunity for IFN researchers to test ideas and results.

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