NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Publications by Shawn Cole

Contact and additional information for this authorAll publicationsWorking Papers only

Working Papers and Chapters

September 2013Incentivizing Calculated Risk-Taking: Evidence from an Experiment with Commercial Bank Loan Officers
with Martin Kanz, Leora Klapper: w19472
We use an experiment with commercial bank loan officers to test how performance based compensation affects risk-assessment and lending. High-powered incentives lead to greater screening effort and more profitable lending decisions. This effect, however, is muted by deferred compensation and limited liability, two standard features of loan officer incentive contracts. We find that career concerns and personality traits affect screening behavior, but show that the response to monetary incentives does not vary with traits such as risk-aversion, optimism or overconfidence. Finally, we present evidence that incentive contracts distort the assessment of credit risk, even among trained professionals with many years of experience. Loans evaluated under permissive incentives are rated significantly...
December 2005Remedying Education: Evidence from Two Randomized Experiments in India
with Abhijit Banerjee, Esther Duflo, Leigh Linden: w11904
Many efforts to improve school quality by adding school resources have proven to be ineffective. This paper presents the results of two experiments conducted in Mumbai and Vadodara, India, designed to evaluate ways to improve the quality of education in urban slums. A remedial education program hired young women from the community to teach basic literacy and numeracy skills to children lagging behind in government schools. We find the program to be very effective: it increased average test scores of all children in treatment schools by 0.14 standard deviations in the first year, and 0.28 in the second year, relative to comparison schools. A computer-assisted learning program provided each child in the fourth grade with two hours of shared computer time per week, in which students played ed...

Contact and additional information for this authorAll publicationsWorking Papers only

 
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