Dass, Nishant; Massa, Massimo; Patgiri, Rajdeep - In: Review of Financial Studies 21 (2008) 1, pp. 51-99
This article studies one of the potential causes of the financial market bubble of the late 1990s: the herding behavior of mutual funds. We show that the incentives contained in the mutual funds' advisory contracts induce managers to overcome their tendency to herd. We argue that investing in...