Cognitive Skills and Economic Preferences in the Fund Industry*

• 成果类型: Article
• 署名作者: Farago, Adam; Holmen, Martin; Holzmeister, Felix; Kirchler, Michael; Razen, Michael
• 署名单位: University of Gothenburg; University of Innsbruck
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1093/ej/ueab092
• 发表日期: 2022
• 页码: 1737-1764
• 关键词: progressive matrices; performance; reflection; Managers; BEHAVIOR; culture; MARKETS; trader; mind

摘要

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.