Risk Related Guides
Risks
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A perverse incentive is a negative unintended consequence of a performance goal, evaluation criteria, incentive program, regulation or system. |
| Type | GovernanceGoal Setting | | Definition | A system or practice that rewards negative outcomes.
| | Examples | A corporate officer who will be heavily rewarded if a firm achieves high profits and will receive a large payment if they are fired has incentives to take excessive risks. If the risks pay off, they will be generously compensated. If the risks cause financial losses, they will be fired and generously compensated. Doctors who are paid to treat diseases but aren't compensated for prevention steps.
Subsidies that cause overproduction of a particular crop. | | Related Concepts | Moral HazardConflict Of Interest |
Risks
This is the complete list of articles we have written about risks.
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A few examples of conflict of interest.
An overview of Chinese walls as a compliance tool.
The definition of duty with examples.
The definition of crony capitalism with examples.
An overview of cronyism with an illustrative example.
The definition of dual agency with examples.
The definition of professional ethics with examples.
A list of common business risks.
The four things that can be done about risk.
A metric for measuring risk management.
The potential that you'll achieve too much of a good thing.
Any risk that people have a strong aversion too.
The definition of risk taking with examples.
A list of risk examples by type.
The two main factors in modeling a risk.
A definition of calculated risk with an example.
How to calculate relative risk with examples.
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