investing. This paper tests the theory in a laboratory experiment. Participants first play a trust game. Participants then act …A recent theory by Gennaioli, Shleifer, and Vishny (2015) proposes that trust is an important component for delegated …

optimization. The precision parameter of the prior on the expected asset returns reflects the confidence of the investor in the … confidence in order to deduce reasonable values of the precision parameter. We recommend that the investor concentrates on the … parameter. In the second part of the paper, the impact of the investor's confidence on the performance of investment strategies …