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Risk taking by agents: The role of ex-ante and ex-post accountability

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  • Pollmann, Monique M.H.
  • Potters, Jan
  • Trautmann, Stefan T.

Abstract

We study the role of accountability in situations where an agent makes risky decisions for a principal. We observe that in the absence of accountability, agents choose less risk averse investments for the principal than investors who invest for their own account. Accountability mitigates the observed decrease in risk aversion. Differences are observed between situations where agents are accountable for their decision (“ex-ante”) and where they are accountable for the outcome (“ex-post”).

Suggested Citation

  • Pollmann, Monique M.H. & Potters, Jan & Trautmann, Stefan T., 2014. "Risk taking by agents: The role of ex-ante and ex-post accountability," Economics Letters, Elsevier, vol. 123(3), pages 387-390.
    • Handle: RePEc:eee:ecolet:v:123:y:2014:i:3:p:387-390
    DOI: 10.1016/j.econlet.2014.04.004
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    References listed on IDEAS

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    More about this item

    Keywords

    Decision under risk; Decisions of agents; Accountability;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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