Doing the Right Thing
“Give people the facts and they’ll do the right thing.” - Bono I remember this Scientific American article stating why traders at investment banks take the crazy risks they take: - Fact #1: Bonuses depend on profits made : The more risks you take, the more profits you might make which would then translate into a bigger bonus. Ergo, take big risks. - Fact #2: Bonuses can be insanely high : Bonuses can run into millions. Even one good year can have you set for life; so who cares about the long term? - Fact #3: Sticking your neck out can be suicidal : If every trader at every other bank takes insane risks and makes money while the going is good, then you would get fired for playing it safe because hey, you bring in less money. How could everybody be wrong? How big an ego do you hav...