Delegated decision making and social competition in the finance industry

Arbeitspapier

Two aspects of social context are central to the finance industry: (i) financial professionals make investment decisions for customers and (ii) social competition/rankings are a pervasive feature. We link both lines of literature to investigate professionals' risk-taking behavior when investing funds for clients. We run online and lab-in-the-field experiments with 965 financial professionals and collect survey evidence from 1,349 respondents. We find that rankings drive professionals' investment behavior: those lagging behind increase risk-taking, but this effect disappears as soon as professionals' incentives are flat. Moreover, we show that professionals' preferences for high rank are stronger than for the general population.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Papers in Economics and Statistics ; No. 2018-07

Classification and Topics

• Classification: Wirtschaft ; Portfolio Choice; Investment Decisions ; Field Experiments
• Subject: experimental finance ; behavioral finance ; social competition ; rank incentives ; financial professionals ; delegated decision making ; investment game ; lab-in-the-field experiment

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kirchler, Michael ; Lindner, Florian ; Weitzel, Utz
• Event: Veröffentlichung
• (who): University of Innsbruck, Research Platform Empirical and Experimental Economics (eeecon)
• (where): Innsbruck
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/184985
• Last update: 10.03.2025, 11:42 AM CET