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Dynamic Incentives for Buy-Side Analysts

Deb, Rahul - 2020

We develop a dynamic adverse selection model where a career-concerned buy-side analyst advises a fund manager about investment decisions. The analyst's ability is privately known, as is any information she learns over time. The manager wants to elicit information to maximize fund performance...

Persistent link: https://www.econbiz.de/10012849367

Do Institutional Incentives Distort Asset Prices?

Lines, Anton - 2016

without direct benchmarking incentives show no effect. My findings cannot be explained by fund flows and thus constitute a new …

Persistent link: https://www.econbiz.de/10012978817

CEO Incentives and Institutional Trader Monitoring are Substitutes : Theory and Evidence

Chen, Brandon - 2012

The traditional view on CEO pay suggests that the use of equity-based incentives (e.g., stocks and options) should … relative sense, when comparing with CEOs' non-equity-based incentives (e.g., bonus). We confirm our model's prediction to show … that the use of equity-based incentives actually falls when institutional traders impound more information in stock prices …

Persistent link: https://www.econbiz.de/10013116442

Once a trader, always a trader : the role of traders in fund management

Cici, Gjergji; Schuster, Philipp; Weishaupt, Franziska - 2024

Mutual fund families are increasingly assigning traders to manage corporate bond mutual funds. Using this setting to study the role of traders in investment management, we document that trader managers identify and exploit short-term trading opportunities at lower transaction costs. These skills...

Persistent link: https://www.econbiz.de/10014467713

Risk management, rational herding and institutional investors : a macro view

Menkhoff, Lukas; Lütje, Torben - 2003

risk managers. This paper analyzes their risk management behavior from a macro perspective and focuses on their incentives … more strongly than more junior managers. Regarding herding as rational strategy of adapting to incentives, one might …

Persistent link: https://www.econbiz.de/10010262912

Investment decision-making in the information-return space

Astaíza-Gómez, José Gabriel - In: Revista de métodos cuantitativos para la economía y … 39 (2025), pp. 1-11

In this paper, I examine the value that investors place on analysts who exhibit lower forecast error volatility. Building on prior empirical research, I develop a theoretical model that formalizes the role of error volatility in investment decision-making. I propose an investment strategy that...

Persistent link: https://www.econbiz.de/10015438167

Makers and takers : the economics of the Kalshi prediction market

Bürgi, Constantin; Deng, Wanying; Whelan, Karl - 2025

Since 2021, Kalshi has operated as the only federally licensed prediction market in the United States. Using transaction-level data on over 300,000 contracts, we provide the first systematic evidence on its pricing. Kalshi's contract prices are informative and improve in accuracy as markets...

Persistent link: https://www.econbiz.de/10015456228

The price of processing : information frictions and market efficiency in DeFi

Azar, Pablo; Olivas, Sergio; Sinha, Nish D. - 2025

This paper investigates the speed of price discovery when information becomes publicly available but requires costly processing to become common knowledge. We exploit the unique institutional setting of hacks on decentralized finance (DeFi) protocols. Public blockchain data provides the precise...

Persistent link: https://www.econbiz.de/10015396109

Investment Horizons and Asset Prices Under Asymmetric Information

Albagli, Elias - 2014

I study a generalized OLG economy where asymmetrically informed agents have arbitrary investment horizons. As horizons increase, the age-adjusted risk aversion of investors fall, and the risk transfer from forced liquidators into voluntary buyers drops. Two equilibria coexist for long enough...

Persistent link: https://www.econbiz.de/10013064961

Transparency and collateral : central versus bilateral clearing

Antinolfi, Gaetano; Carapella, Francesca; Carli, Francesco - In: Theoretical economics : TE ; an open access journal in … 17 (2022) 1, pp. 185-217

central counterparty allows lenders to mutualize counterparty credit risk, but this insurance may weaken incentives to acquire …

Persistent link: https://www.econbiz.de/10012806925