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effort choices, and, according to expected utility theory, risk preferences are irrelevant. We derive a closed-form solution …
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This paper studies how fund managers take skewed bets in tournaments in the investment management industry, assuming that a given fund manager constantly reexamines fund performance relative to her peers and takes a position with respect to skewness risk. I show that when a fund manager...
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In the context of principal-agent theory risk is largely seen as a source that causes inefficiencies and lowers …
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