We develop a new theory of delegated investment whereby managers compete in terms of composition of the portfolios they promise to acquire. We study the resulting asset pricing in the inter-manager market. We incentivize investors so that we obtain sharp predictions. Managers are paid a fixed...

Execution of complex cognitive tasks is often analyzed as an exercise of information acquisition and belief updating. We challenge this view in the context of a non-incremental task, namely, the knapsack problem. First, we provide a theoretical argument why Bayesian updating makes little sense...

We develop a new theory of delegated investment whereby managers compete in terms of composition of the portfolios they promise to acquire. We study the resulting asset pricing in the inter-manager market. We incentivize investors so that we obtain sharp predictions. Managers are paid a fixed...