Why do investors entrust active mutual fund managers with large sums of money while receiving negative excess returns … on average? Our explanation is that investors have a coarser information set than fund managers which leads them to … systematically misinterpret managers' skill. When investors are unable to correctly quantify risk because they have no knowledge of …

Using detailed mutual fund holdings in the US market, we estimate active mutual fund managers’ loss aversion as a …. We further find managers' loss aversion is higher when past fund flows were high and lower when past fund flows were … that managers compete for greater inflows strategically while exhibiting self-interested choices …

shares. Mutual fund managers may decide to deviate from a well-diversified portfolio and concentrate their holdings in stocks … where fund managers have information advantages. I explore the relation between portfolio concentration in family firms and …

This study shows that mutual fund managers vary in their reliance on category-level information, relative to firm …-specific information about assets. Moreover, fund performance decreases with managers' propensity to rely on categories. Fund managers … display less skill in picking stocks which are more coarsely categorized, especially when the managers rely more on categories …

I study the determinants of mutual fund managers' expectations about the stock market and its implications for decision … making and fund performance. Using a direct measure of managers' market expectations extracted from mutual funds' semi …-annual reports, I find that fund managers extrapolate their funds' past performance into their market outlook. In addition, their …