Thursday, February 4, 2010

What I've found interesting lately...

There has been a lot of comment on bonuses in the banking industry since the onset of the GFC.  Read Dan Ariely's take on the effectiveness of bonuses here.

For those who believe that economics generally gets things half right, behavioural economics might be your thing.  A mix of psychology and economics, this field has been enlightening economists for the past two decades.  Some of the latest findings in behavioural economics are found here (highly recommended).


  1. 'Intrinsic Reward' is a goldmine

  2. Mate - Dan Ariely has hit a cracking nail on the head right there..! Having witnessed in person the money making machine of a leading Investment Bank in action, I can tell you first hand that the most recognised and promoted people do NOT NECESSARILY produce the best quality work. The accolades and recognition (and bonus/promotions that follow) in general go to those who generate spam-like quantities of email and cc multiple departmental managers to improve their "visibility". Yes keeping up appearances is what its all about...

    However, I do believe that bonuses are a good form of reqard for an individual who is measured soley on profitability eg prop trader or the like. If you don;t give them a % of their profit as bonus, where would the incentive be to make the firm money??