If risk-sharing is theoretically superior to risk-transfer in principal-agent models, why do debt-based financial systems dominate modern economies?

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u/zawmed — 16 days ago

If risk-sharing is theoretically superior to risk-transfer in principal-agent models, why do debt-based financial systems dominate modern economies?

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u/zawmed — 16 days ago

Why do many investment arrangements allow the manager to receive a share of profits without sharing an equivalent share of losses?

What economic theories explain this structure, and what are its advantages and disadvantages compared with arrangements where both profits and losses are shared proportionally?

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u/zawmed — 19 days ago

What are the most common misconceptions about inflation that economists wish the general public understood better?

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u/zawmed — 22 days ago

What psychological bias has cost you the most mony?

We often think financial mistakes come from a lack of knowledge, but I suspect psychology plays a bigger role.

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Fear makes people sell investments at the worst possible time. Greed pushes people into speculative investments. Social pressure leads people to spend money they don't have on things they don't need.

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Looking back, what psychological bias has cost you the most money?

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Was it FOMO, loss aversion, overconfidence, lifestyle inflation, keeping up with others, or something else?

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What happened, and what did you learn from it?

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u/zawmed — 23 days ago