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Cited by 2Experimental Behavioral Economics StudiesDecision-Making and Behavioral EconomicsFinancial Markets and Investment Strategies

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Rankings and Risk‐Taking in the Finance Industry

Open access
KIRCHLER, MICHAEL, LINDNER, FLORIAN, WEITZEL, UTZ·2018·The Journal of Finance
DOI 10.1111/jofi.12701
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Abstract

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).

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Crossref · 10.1111/jofi.12701

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  • Kirchler, Lindner, and Weitzel (2018) find that rankings increase risk taking of underperforming financial market professionals.

    “and Kirchler, Lindner, and Weitzel (2018) find that rankings increase risk taking of underperforming financial market professionals.”

    From Copy Trading (2020) · cites this paper as Kirchler, Lindner, and Weitzel (2018)

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Metadata

Authors
KIRCHLER, M., LINDNER, F., & WEITZEL, U.
Affiliations
  • University of Bergen (NO)
  • Max Planck Society (DE)
  • Radboud University Nijmegen (NL)
ORCID
Venue
The Journal of Finance
Publisher
Wiley
Published
2018-07-12
Volume
73
Issue
5
Pages
2271-2302
ISSN
  • 0022-1082 (ISSN-L)
  • 1540-6261
DOI
10.1111/jofi.12701
OpenAlex
W3121651152
Cited by
2
References
3
Citations by year
2018: 1
FWCI
0.50
Type
journal article
Language
en
Open access
Licence
onlinelibrary.wiley.com/termsAndConditions#vor (vor)
Locations
  • The Journal of Finance (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • Utrecht University Repository (Utrecht University) (submittedVersion)
  • Econstor (Econstor) (submittedVersion)
  • MPG.PuRe (Max Planck Society) (submittedVersion)
  • OSF Preprints (OSF Preprints) (submittedVersion)
  • Radboud Repository (Radboud University) (submittedVersion)
Funders
  • Austrian Science Fund (FWF START‐grant Y617‐G11, SFB F63)
  • Radboud Universiteit
  • Vetenskapsrådet (2015‐01713)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Experimental Behavioral Economics Studies
  • Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
  • Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
Keywords
ranking, tournament incentives, risk-taking, investment decision-making, financial professionals, underperformance, gender differences, framing effects

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