#2421. The influence of compensation interdependence on risk-taking: the role of mutual monitoring

October 2026publication date
Proposal available till 30-05-2025
4 total number of authors per manuscript4500 $

The title of the journal is available only for the authors who have already paid for
Journal’s subject area:
Economics and Econometrics;
Business and International Management;
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Abstract:
The article analyzes the influence of the interdependence of compensations on risk taking from mutual monitoring of risky investment decisions. We argue that people who are interdependent on compensation have a behavioral incentive to take higher risks when there is mutual monitoring. It is assumed that the driving force behind this effect is experience management, with an important precondition for peer transparency through peer monitoring. The results of the laboratory experiment confirm our predictions. Additional analysis shows that experience management affects our results because participants factor in the preferences of their peers when making decisions.
Keywords:
Compensation interdependence; Impression management; Mutual monitoring; Risk-taking

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