artículo
The delegated portfolio management problem: Reputation and herding
Fecha
2009Registro en:
10.1016/j.jbankfin.2009.04.018
0378-4266
WOS:000271343700011
Autor
Villatoro, Felix
Institución
Resumen
We study the relationship between financial intermediaries' reputation and herding in a delegated portfolio management problem context. We identify conditions under which equilibria exist such that intermediaries with good reputation invest in private information, whereas those with poor reputation herd. The model's empirical predictions are discussed and found to be consistent with previous evidence. From a normative stand, our work points out the possible existence of a policy trade-off between protecting investors by demanding more transparency from intermediaries and encouraging herding by free-riders for whom imitating portfolio decisions would be easier under tighter regulation, such as more frequent portfolio disclosure. (C) 2009 Elsevier B.V. All rights reserved.