The browser you are using is not supported by this website. All versions of Internet Explorer are no longer supported, either by us or Microsoft (read more here: https://www.microsoft.com/en-us/microsoft-365/windows/end-of-ie-support).

Please use a modern browser to fully experience our website, such as the newest versions of Edge, Chrome, Firefox or Safari etc.

Portrait of Erik Wengström. Photo.

Erik Wengström

Director of Doctoral studies, Department of Economics, Professor

Portrait of Erik Wengström. Photo.

Delegation Decisions in Finance

Author

  • Felix Holzmeister
  • Martin Holmén
  • Michael Kirchler
  • Matthias Stefan
  • Erik Wengström

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 Institute for Operations Research and the Management Sciences

Topic

  • Economics and Business
  • Computer and Information Sciences

Status

Published

ISBN/ISSN/Other

  • ISSN: 0025-1909