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How tournament ince...
How tournament incentives affect asset markets: A comparison between winner-take-all tournaments and elimination contests
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- Fang, Dawei, 1983 (author)
- Gothenburg University,Göteborgs universitet,Institutionen för nationalekonomi med statistik,Centrum för finans,Department of Economics,Centre for Finance
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- Holmen, Martin, 1976 (author)
- Gothenburg University,Göteborgs universitet,Institutionen för nationalekonomi med statistik,Centrum för finans,Department of Economics,Centre for Finance
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Kleinlercher, Daniel (author)
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- Kirchler, Michael, 1977 (author)
- Gothenburg University,Göteborgs universitet,Institutionen för nationalekonomi med statistik,Centrum för finans,Department of Economics,Centre for Finance
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(creator_code:org_t)
- Elsevier BV, 2017
- 2017
- English.
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In: Journal of Economic Dynamics and Control. - : Elsevier BV. - 0165-1889. ; 75, s. 1-27
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Abstract
Subject headings
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- We investigate the impact of investment managers׳ tournament incentives on investment strategies and market efficiency, distinguishing between winner-take-all tournaments (WTA), where a minority wins, and elimination contests (EC), where a majority wins. Theoretically, we show that investment managers play heterogeneous strategies in WTA and homogeneous strategies in EC, and markets are more prone to mispricing in WTA than in EC. Experimentally, we find that investment managers play more heterogeneous strategies in WTA than in EC, but this does not trigger significant differences in prices. Moreover, prices in WTA and EC do not differ significantly from markets composed of linearly incentivized subjects.
Subject headings
- SAMHÄLLSVETENSKAP -- Ekonomi och näringsliv (hsv//swe)
- SOCIAL SCIENCES -- Economics and Business (hsv//eng)
Keyword
- Tournament incentives; Investment behavior; Market efficiency; Experimental finance
Publication and Content Type
- ref (subject category)
- art (subject category)
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