We extend the model of Berk and Green (2004) to investigate the impact of two frictions, search costs and fi nancial constraints, on mutual fund performance. Our model predicts the survival of underperforming funds and delivers two new predictions: 1) differences in performance across funds are...

We examine the competition between a transparent exchange organized as a limit order book and an opaque dark pool in the presence of asymmetric information. We show that the coexistence of a dark pool with an exchange not only enlarges traders' strategy set but may also induce trading venue...

In a model of mutual fund investor learning about managerial ability, we investigate how investment decisions depend on both past returns and non-return information. We show that non-return information affects investors' reliance on past returns as well as their decision to participate. Our...