This paper shows, that after observing the investment decisions by firm owners their employees can engage in costly training, thus increasing their general and firm-specific productivity, which also depends on capital endowment...

Idiosyncratic risk attitudes are usually assumed to be commonly known and related to own payoffs only. However, the alternatives faced by a decision maker often involve risk about others' payoffs as well. Motivated by the importance of other-regarding preferences in social interactions, this...