haku: @freeterm herding / yhteensä: 5
viite: 4 / 5
| Tekijä: | Gümbel, A. |
| Otsikko: | Herding in delegated portfolio management: When is comparative performance information desirable? |
| Lehti: | European Economic Review
2005 : APR, VOL. 49:3, p. 599-626 |
| Asiasana: | Portfolio management Incentives Performance measurement Information Strategy Models |
| Vapaa asiasana: | Herding |
| Kieli: | eng |
| Tiivistelmä: | The paper addresses the issue of investors asset allocation decisions when portfolio management is delegated to an agent. Contrary to predictions from traditional financial theory, it is shown that investors may not induce their manager to allocate funds to the asset with the highest return. Instead they may herd in their asset allocation decision and induce trade in a particular asset, because another manager is trading in it and despite the presence of a more profitable alternative. It is shown that herding occurs, when the cost of information is high, information precision is low and when managers are sufficiently risk averse. Moreover, when investors can decide whether or not to disclose information about their manager's performance, they will not do so. |
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