Rankings and Risk-Taking in the Finance Industry

• 成果类型: Article
• 署名作者: Kirchler, Michael; Lindner, Florian; Weitzel, Utz
• 署名单位: University of Innsbruck; University of Gothenburg; Max Planck Society; Utrecht University; Radboud University Nijmegen
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12701
• 发表日期: 2018
• 页码: 2271-2302
• 关键词: PATH-GOAL THEORY; MARKET PROFESSIONALS; portfolio choice; BANKING INDUSTRY; field experiment; incentives; aversion; COMPETITION; IMPACT; pay

摘要

Rankings are omnipresent in the finance industry, yet the literature is silent on how they impact financial professionals' behavior. Using lab-in-the-field experiments with 657 professionals and lab experiments with 432 students, we investigate how rank incentives affect investment decisions. We find that both rank and tournament incentives increase risk-taking among underperforming professionals, while only tournament incentives affect students. This rank effect is robust to the experimental frame (investment frame vs. abstract frame), to payoff consequences (own return vs. family return), to social identity priming (private identity vs. professional identity), and to professionals' gender (no gender differences among professionals).