RISK AND TRUST REQUIRE THE SUPPRESSION OF DISCOUNTS (FREE RIDING) “There is a ne

RISK AND TRUST REQUIRE THE SUPPRESSION OF DISCOUNTS (FREE RIDING)

“There is a negative relation between risk tolerance and egalitarianism in both jobs and portfolios.” — Meir Statman

Santa Clara University

Risk requires the suppression of free riding. No matter where we look, we will find that individualism suppresses free riding and increases trust, and therefore risk taking.

To increase redistribution while retaining trust, require homogeneity.

Everything else denies genetic necessity.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1647086