Original sentence: This sort of behavior helps create financial crises and catastrophic organizational failure.Unfortunately, tournaments also promote risk seeking behavior
Edited sentence: In cases with extreme incentive intesity and especially where the risks taken cannot be diversified, this sort of behavior helps create financial crises and catastrophic organizational failure.In moderation this can offset the greater risk aversion of agents vs principals because their social capital is concentrated in their employer while in the case of public companies the principal typically owns his stake as part of a diversified portfolio.Tournaments also promote risk seeking behavior