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dc.contributor.authorCole, Shawn
dc.contributor.authorKanz, Martin
dc.contributor.authorKlapper, Leora
dc.date.accessioned2012-08-08T13:03:41Z
dc.date.issued2012-08-08
dc.identifier.citationCole, Shawn, Martin Kanz, and Leora Klapper. "Incentivizing Calculated Risk-Taking: Evidence from an Experiment with Commercial Bank Loan Officers." Harvard Business School Working Paper, No. 13-002, July 2012.en_US
dc.identifier.urihttp://nrs.harvard.edu/urn-3:HUL.InstRepos:9369407
dc.description.abstractThis paper uses a series of experiments with commercial bank loan officers to test the effect of performance incentives on risk-assessment and lending decisions. We first show that, while high-powered incentives lead to greater screening effort and more profitable lending, their power is muted by both deferred compensation and the limited liability typically enjoyed by credit officers. Second, we present direct evidence that incentive contracts distort judgment and beliefs, even among trained professionals with many years of experience. Loans evaluated under more permissive incentive schemes are rated significantly less risky than the same loans evaluated under pay-for-performance.en_US
dc.language.isoen_USen_US
dash.licenseOAP
dc.subjectloan officer incentivesen_US
dc.subjectbankingen_US
dc.subjectemerging marketsen_US
dc.titleIncentivizing Calculated Risk-Taking: Evidence from an Experiment with Commercial Bank Loan Officersen_US
dc.typeResearch Paper or Reporten_US
dc.description.versionAuthor's Originalen_US
dc.relation.journalHarvard Business School working paper series # 13-002en_US
dash.depositing.authorCole, Shawn
dc.date.available2012-08-08T13:03:41Z
dash.contributor.affiliatedCole, Shawn


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