Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/146119
Authors: 
Kirchler, Michael
Lindner, Florian
Weitzel, Utz
Year of Publication: 
2016
Series/Report no.: 
Working Papers in Economics and Statistics 2016-02
Abstract: 
Rankings are a pervasive feature of the finance industry. Although they have no direct monetary consequences, rankings provide utility for intrinsic (positive self-image) and extrinsic (status) reasons. We recruit a unique subject pool of 204 financial professionals and investigate how anonymous rankings influence risk-taking in investment decisions. We find that rankings increase risk-taking because of financial professionals' desire for positive self-image. This particularly applies to underperformers, who take the highest risks. Incentivizing rankings monetarily does not further increase risk-taking. In a comparative study with 432 students we find that student behavior is not driven by rankings.
Subjects: 
experimental finance
behavioral finance
rank incentives
rankings
financial professionals
investment game
framed field experiment
tournament incentives
JEL: 
G02
G11
D03
C93
Document Type: 
Working Paper

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