Even a milder version where bankers get a large cut of profits but bear no downside beyond losing their job (still keeping a respectable salary) creates terrible incentives, because they can make humongous amounts by succeeding at risky bets while not bearing the losses.

causalpending

Speaker

Daron Acemoglu

Evidence Quote

you don't bear the downside of the losses and you can make you know humongous amounts of money by being successful in the risks that you take

Source

Daron Acemoglu on Inequality and the Financial Crisis 02/21/2011EconTalk
Created: 6/16/2026, 2:36:28 PM

My Notes

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