 "Is there something about the culture and professional identity of banks that makes their employees risk-averse? Photo: Reuters")
Here is a fun behavioural economics experiment. Ernst Fehr and Michel Marechal of the University of Zurich and Alain Cohn of the University of Michigan got “128 employees of a large, international bank”, gave them some money, and asked them to make a bet with it:
“They were given US $200 of which they could invest any amount in a risky asset which (i) paid back 2.5 times the investment with 50% probability or (ii) nothing with 50% probability. Participants knew these probabilities and were allowed to keep all the money they did not invest. We use the dollar
“They were given US $200 of which they could invest any amount in a risky asset which (i) paid back 2.5 times the investment with 50% probability or (ii) nothing with 50% probability. Participants knew these probabilities and were allowed to keep all the money they did not invest. We use the dollar
