| 1. |
- Berglund, Tom, et al.
(author)
-
Employees on Corporate Boards
- 2016
-
In: Multinational Finance Journal. - 1096-1879. ; 20:3, s. 237-271
-
Journal article (peer-reviewed)abstract
- Employees in Swedish firms have the legal right to be represented on the company board. However, in a considerable share of Swedish listed firms, this option is not exercised. This paper asks why that is the case. We use a simple framework, based on rational choice by individual employees. Our sample consists of 226 listed non-financial Swedish firms in 2001-2007. The results are in line with our predictions. Employee board representation does not impact firm performance, neither positively nor negatively. The main driver of employee board representation is the number of eligible employees. Furthermore, employee board representation decreases with firm risk, slow growth, and internationalization. We conclude that when the law grants the right for employees to be represented on the board a simple model based on individual utility maximization provides an explanation for why the right is used in some firms and not in others.
|
|
| 2. |
- Fang, Dawei, 1983, et al.
(author)
-
How tournament incentives affect asset markets: A comparison between winner-take-all tournaments and elimination contests
- 2017
-
In: Journal of Economic Dynamics and Control. - : Elsevier BV. - 0165-1889. ; 75, s. 1-27
-
Journal article (peer-reviewed)abstract
- 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.
|
|
| 3. |
- Farago, Adam, 1984, et al.
(author)
-
Cognitive Skills and Economic Preferences in the Fund Industry*
- 2022
-
In: Economic Journal. - : Oxford University Press (OUP). - 0013-0133 .- 1468-0297. ; 132:645, s. 1737-1764
-
Journal article (peer-reviewed)abstract
- We investigate the impact of cognitive skills and economic preferences on fund managers' professional decisions by running a battery of experiments with them. First, we find that fund managers' risk tolerance positively correlates with fund risk when accounting for fund benchmark, fund category and other controls. Second, we show that fund managers' ambiguity tolerance positively correlates with the funds' tracking error from the benchmark. Finally, we report that cognitive skills do not explain fund performance in terms of excess returns. However, we do find that fund managers with high cognitive reflection abilities compose funds at lower risk.
|
|
| 4. |
|
|
| 5. |
- Gärling, Tommy, 1941, et al.
(author)
-
Review of behavioral explanations of how rank-based incentives influence risk taking by investment managers in mutual fund companies
- 2020
-
In: Review of Behavioral Finance. - 1940-5979. ; 12:2
-
Journal article (peer-reviewed)abstract
- Purpose: The purpose of this paper is to review behavioral explanations of the empirical observation that investment managers in mutual fund companies increase their risk taking when offered incentives based on how their performance is ranked compared to peers. Design/methodology/approach: A conceptual model is proposed of how research on social comparison, competition and financial risk taking may explain increased investor risk taking induced by rank-based incentives. Research findings in each of the strands of research are reviewed. Findings: A proposed main explanation is that an above-average bias in comparing oneself with competitors results in overconfidence that increases risk taking. A complementary proposed explanation is that an anticipated loss when lagging behind increases risk taking, and another proposed complementary explanation the belief that risk taking is a winning strategy. Originality/value: The results provide a broad framework for directions of research on social comparison processes in the mutual fund industry addressing the difficulties in implementing performance evaluations. © 2019, Emerald Publishing Limited.
|
|
| 6. |
|
|
| 7. |
- Holmen, Martin, 1976, et al.
(author)
-
Economic Preferences and Personality Traits Among Finance Professionals and the General Population
- 2023
-
In: Economic Journal. - 0013-0133 .- 1468-0297. ; 133:656
-
Journal article (peer-reviewed)abstract
- Based on artefactual field experiments, we investigate whether finance professionals differ from a sample of the working population in terms of industry-relevant preferences and personality traits. When adjusting for socioeconomic characteristics, we find only few and less marked differences: finance professionals are less risk averse, less trustworthy, show higher levels of psychopathy and are more competitive than participants from the general population. In an additional survey, experts with hiring experience consider industry selection, self-selection and imprinting by industry norms as explanatory for the observed subject pool differences.
|
|
| 8. |
|
|
