Ferdinand M. Vieider Does Compensation by Stock Options Induce Excessive Risk Appetite in Executives?

Ferdinand M. Vieider is the Head of the Junior Research Group ‘Risk and Development’ at Berlin Social Science Center (WZB) and Professor in Economics at the University of Reading (UK). In his research he focuses on development economics, behavioral economics, decision making under risk and uncertainty, and policy evaluation. He was an Excellence Fellow at Ludwig-Maximilians-University Munich and a ‘Franco Romani’ Fellow of the Luigi Einaudi Foundation (Rome, Italy).

Area of Research

Behavioral Economics, Development Economics

Ferdinand M. Vieider, Mathieu Lefebvre, Ranoua Bouchouicha, Thorsten Chmura, Rustamdjan Hakimov, Michal Krawczyk and Peter Martinsson. "Common Components of Risk and Uncertainty Attitudes Across Contexts and Domains: Evidence from 30 Countries." Journal of the European Economic Association 13 (2015): 421-452.  
Stefan T. Trautmann, Ferdinand M. Vieider and Peter P. Wakker. "Preference Reversals for Ambiguity Aversion." Management Science 57 (2011): 1320-1333.  
Philip E. Tetlock, Ferdinand M. Vieider, Shefali V. Patil and Adam M. Grant. "Accountability and Ideology: When Left Looks Right and Right Looks Left." Organizational Behavior and Human Decision Processes 122 (2013): 22-35.  
Ferdinand M. Vieider. "Separating Real Incentives and Accountability." Experimental Economics 14 (2011): 507-518.  
Stefan T. Trautmann, Ferdinand M. Vieider and Peter P. Wakker. "Causes of Ambiguity Aversion: Known Versus Unknown Preferences." Journal of Risk and Uncertainty 36 (2008): 225-243.  

since 2015

Professor of Behavioural and Development Economics

University of Reading

Department of Economics

since 2014

Director

Climate and Development Evaluation Group C.I.C.

since 2012

Head of Junior Research Group “Risk and Development”

Berlin Social Science Centre (WZB)

2009-2010

Consultant

Climate Policy Initiative

2009-2010

CNRS Researcher

Université de Lyon

GATE

2006-2010

Contributor

News Briefings, Oxford Analytica

2007-2008

Visiting Scholar

University of California, Berkeley

Haas School of Business

2000-2001

Project Management

Cobalt Networks/Sun Microsystems

2009

PhD in Economics

Erasmus University Rotterdam

Econometric Institute

2003

Master of Science in Economics

CORIPE, Torino, Italy

2001

Bachelor and Master in Political Science and International Relations

LUISS Guido Carli, Rome, Italy

- Acta Psychologica

- American Economic Review

- Applied Psychology–An International Review

- Ecological Economics

- European Economic Review

- Experimental Economics

- Games and Economic Behavior

- Journal of Applied Social Psychology

- Journal of Economic Behavior and Organization

- Journal of Economic Psychology

- Journal of Economic Growth

- Journal of the European Economic Association

- Management Science

- Social Choice and Welfare

- Theory & Decision

- World Development

Fellowships

- Excellence Fellow, LMU Munich, Germany (2010-2012)

- “Franco Romani” Fellow, Luigi Einaudi Foundation, Rome, Italy (2003-2004)

- Fulbright scholarship, later declined in favor of a PhD position in Amsterdam/Rotterdam (2004)

- German Research Foundation (DFG) for the construction of a panel dataset in southern India (2013)

- Thyssen-Krupp foundation for the organization of the workshop “Fertile Fields in Development: Randomized Trials versus Individual Preferences” (2013)

- WZB as start-up money for the construction of a large household panel in India (2013)

- Swedish Research Council as part of a research team for the investigation of adaptation to climate change in Central America (with P. Martinsson & F. Alpizar) (2011)

- Research funds from the Excellence Initiative, LMU Munich, for a cultural comparison of risk attitudes (renewal) (2011)

- Economy and Environment Program for Southest Asia as part of a research team on flooding risk (with P.K. Nam & P. Martinsson) (2011)

- Research funds from the Excellence Initiative, LMU Munich, for a cultural comparison of risk attitudes (2010)

In the laboratory experiment presented in this video experimental CEOs were compensated either through stock options or restricted company stock. It shows that stock options induce excessive risk taking in some cases and that company performance is generally better under compensation through restricted company stock. As FERDINAND M. VIEIDER points out, the main determinant of risk taking under compensation through stock options was found to be the personal asset position of the experimental CEO.

LT Video Publication DOI: https://doi.org/10.21036/LTPUB10099

Risk Taking of Executives under Different Incentive Contracts: Experimental Evidence

  • Mathieu Lefebvre and Ferdinand M. Vieider
  • Journal of Economic Behavior and Organization
  • Published in 2013
Mathieu Lefebvre and Ferdinand M. Vieider. "Risk Taking of Executives under Different Incentive Contracts: Experimental Evidence." Journal of Economic Behavior and Organization 97 (2013): 27-36.

Risk Taking of Executives Under Different Incentive Contracts: Experimental Evidence

  • Lefebvre, Mathieu; Vieider, Ferdinand M.
  • Unpublished
  • Published in 2013

Chicago

Mathieu Lefebvre and Ferdinand M. Vieider. "Risk Taking of Executives Under Different Incentive Contracts: Experimental Evidence." Unpublished (2013).