Cash flows between investors and funds are both cause and effect in a complex web of economic decisions. Among the issues at stake are the prospects and fees of the funds, the efforts and risk choices by the funds' managers, the pricing and comovement of the assets they trade, the stability of...

Using daily trade and quote data, we test whether institutional trading patterns are consistent with Avery and Zemsky's (1998) theoretical model of information cascades. Consistent with theory, we find variables proxying for information asymmetry to positively predict increased levels of...