Risk appetite: reaching for the efficient frontier
Publication of Business Innovation
A.F. Wild,de, G.J. Pijl,van der, V. Versluis | Conference contribution | Publication date: 25 March 2016
In the experiment risk professionals and laymen did not differ in their application of known criteria for designing risk appetite. The extent to which these criteria were used is very limited. Financial incentives do not consistently influence risk appetite in the direction that was predicted by principal-agent theory. This suggests a need for creating more awareness among risk professionals of both the merits of expected value calculation and impact reduction.
Author(s) - affiliated with Rotterdam University of Applied Sciences