scholarly journals Risk-Taking Under Limited Liability: Quantifying the Role of Motivated Beliefs

2021 ◽  
Author(s):  
Ciril Bosch-Rosa ◽  
Daniel Gietl ◽  
Frank Heinemann
2021 ◽  
Vol 75 (4) ◽  
Author(s):  
Hannah E. A. MacGregor ◽  
Aislinn Cottage ◽  
Christos C. Ioannou

Abstract Consistent inter-individual variation in behaviour within a population, widely referred to as personality variation, can be affected by environmental context. Feedbacks between an individual’s behaviour and state can strengthen (positive feedback) or weaken (negative feedback) individual differences when experiences such as predator encounters or winning contests are dependent on behavioural type. We examined the influence of foraging on individual-level consistency in refuge use (a measure of risk-taking, i.e. boldness) in three-spined sticklebacks, Gasterosteus aculeatus, and particularly whether changes in refuge use depended on boldness measured under control conditions. In the control treatment trials with no food, individuals were repeatable in refuge use across repeated trials, and this behavioural consistency did not differ between the start and end of these trials. In contrast, when food was available, individuals showed a higher degree of consistency in refuge use at the start of the trials versus controls but this consistency significantly reduced by the end of the trials. The effect of the opportunity to forage was dependent on behavioural type, with bolder fish varying more in their refuge use between the start and the end of the feeding trials than shyer fish, and boldness positively predicted the likelihood of feeding at the start but not at the end of the trials. This suggests a state-behaviour feedback, but there was no overall trend in how bolder individuals changed their behaviour. Our study shows that personality variation can be suppressed in foraging contexts and a potential but unpredictable role of feedbacks between state and behaviour. Significance statement In this experimental study, we examined how foraging influences consistency in risk-taking in individual three-spined sticklebacks. We show that bolder individuals become less consistent in their risk-taking behaviour than shyer individuals during foraging. Some bolder individuals reinforce their risk-taking behaviour, suggesting a positive feedback between state and behaviour, while others converge on the behaviour of shyer individuals, suggesting a negative feedback. In support of a role of satiation in driving negative feedback effects, we found that bolder individuals were more likely to feed at the start but not at the end of the trials. Overall, our findings suggest that foraging can influence personality variation in risk-taking behaviour; however, the role of feedbacks may be unpredictable.


Laws ◽  
2021 ◽  
Vol 10 (2) ◽  
pp. 21
Author(s):  
Viktor A. Mikryukov

The purpose of the study is to highlight the most significant legal gaps in the mechanism under study, find doctrinally relevant ways to overcome them casually in law enforcement, and propose options for generally filling the gaps in rulemaking. It is equally important to test the effectiveness of the analogy as a means to combat legal gaps. The methodological framework was formed by general (analysis, synthesis, abstraction, and concretization) and specific (comparative, formal, and technical legal) scientific research methods. The positive role of analogy as a method of combating legal uncertainty and the formation of legislative innovations was confirmed. The conclusion was made about the absence of a formal need for additional legislative authorization for Limited Liability Companies’ members to create a conditional or individualized withdrawal procedure. Backed by the legal analogy, the necessity to extend the freedom-of-contract doctrine in determining the fair value of a withdrawing shareholder’s share was argued. The achievements provided the basis for specific practical proposals to enhance existing Russian legislation and harmonize corporate relationships, which should improve Russia’s business climate.


Author(s):  
Pierre-Richard Agénor ◽  
Luiz A. Pereira da Silva

AbstractThe effects of capital requirements on risk-taking and welfare are studied in an overlapping generations model of endogenous growth with banking, limited liability, and government guarantees. Capital producers face a choice between a safe technology and a risky, more productive but socially inefficient, technology. Bank risk-taking is endogenous. As a result of a skin in the game effect—motivated either as an aggregate externality, or as the outcome of the optimal choice of monitoring effort by individual banks—default risk is inversely related to the capital adequacy ratio. Numerical simulations show that in an equilibrium where banks extend both safe and risky loans, the skin in the game effect must be sufficiently strong for a welfare-maximizing regulatory policy to exist. These results remain qualitatively similar with endogenous monitoring costs and a strong effect of monitoring on entrepreneurial moral hazard. However, numerical experiments also suggest that the optimal capital adequacy ratio may be too high in practice and may require concomitantly a broadening of the perimeter of regulation and a strengthening of financial supervision to prevent disintermediation and distortions in financial markets.


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