Loss-Averse Preferences, Performance, and Career Success of Institutional Investors

• 成果类型: Article
• 署名作者: Bodnaruk, Andriy; Simonov, Andrei
• 署名单位: University of Illinois System; University of Illinois Chicago; University of Illinois Chicago Hospital; Michigan State University; Centre for Economic Policy Research - UK
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhw053
• 发表日期: 2016
• 页码: 3140
• 关键词: MUTUAL FUND INDUSTRY; corporate-finance; risk-taking; ceo overconfidence; Behavioral biases; prospect-theory; INVESTMENT; disposition; incentives; experience

摘要

Using survey-based measures of mutual fund manager loss aversion, we study the effects of institutional investor preferences on their investment decisions, performance, and career outcomes. We find that managers with higher aversion to losses choose portfolios with lower downside risk, increase their risk-taking more in response to poor past performance, and display a stronger disposition effect. Further, we provide evidence that managers who are more loss-averse have lower performance and are more likely to have their contracts terminated.