Abstract: The financial crisis has been attributed partly to perverse incentives for traders at banks and has led policy makers to propose regulation of banks’ remuneration packages. We explain why poor incentives for traders cannot be fully resolved by only regulating the bank’s top...

The financial crisis has been attributed partly to perverse incentives for traders at banks and has led policy makers to propose regulation of banks' remuneration packages. We explain why poor incentives for traders cannot be fully resolved by only regulating the bank's top executives, and why...

Abstract: The financial crisis has been attributed partly to perverse incentives for traders at banks and has led policy makers to propose regulation of banks’ remuneration packages. We explain why poor incentives for traders cannot be fully resolved by only regulating the bank’s top...

We present an experimental study of a risky sequential bargaining to model negotiations in risky joint ventures that proceed through multiple stages.Our example is the production of a movie that may give rise to a sequel, so actors and producers negitiate sequentially.We compare the predictions...

The hypothesis that, on average, people accurately estimate probabilities in random walk processes is experimentally investigated.Individuals are confronted with a process that starts with $X, and in every stage either goes up or down by $1, with probabilities p and 1 - p respectively.For...

We present a definition of increasing uncertainty, independent of any notion of subjective probabilities, or of any particular model of preferences.Our notion of an elementary increase in the uncertainty of any act corresponds to the addition of an 'elementary bet' which increases consumption by...