Erik Wengström
Professor, Director of Doctoral studies, Department of Economics
Delegation Decisions in Finance
Author
Summary, in English
Based on an online experiment with a sample of finance professionals and participants from the general population (acting as clients), we examine drivers and motives of clients’ choices to delegate investment decisions to agents. We find that clients favor delegation to investment algorithms, followed by delegation to finance professionals compensated with an aligned incentive scheme, and lastly to finance professionals receiving a fixed payment for investing on behalf of others. We show that trust in investment algorithms or finance professionals, and clients’ propensity to shift blame on others increase the likelihood of delegation, whereas clients’ own decision-making quality is associated with a decrease in delegation frequency.
Department/s
- Department of Economics
Publishing year
2023
Language
English
Pages
4828-4844
Publication/Series
Management Science
Volume
69
Issue
8
Document type
Journal article
Publisher
Informs
Topic
- Economics and Business
- Computer and Information Science
Status
Published
ISBN/ISSN/Other
- ISSN: 0025-1909