FOSTERING THE BEST EXECUTION REGIME: AN EXPERIMENT ABOUT PECUNIARY SANCTIONS AND ACCOUNTABILITY IN FIDUCIARY MONEY MANAGEMENT

Casal S, Ploner M, Sproten A (2019)

Publication Type: Journal article

Publication year: 2019

Journal

Economic Inquiry Wiley-Blackwell: No OnlineOpen

Book Volume: 57

Pages Range: 600-616

Journal Issue: 1

DOI: 10.1111/ecin.12575

Abstract

Asset management often involves a conflict of interests between investors and fund managers. A main goal of financial regulators is to identify and mitigate this conflict. This article focuses on measures that may foster protection of investors' interests. In an experiment capturing the essential elements of asset management, we find that managers' accountability does not prevent their opportunistic behavior if not backed by a threat of punishment. Further, investors inefficiently sanction managers if not completely aware of managers' choices. To effectively protect investors in financial intermediations, financial regulators should ensure both managers' accountability and a credible sanctioning system.

Authors with CRIS profile

Alec Sproten Lehrstuhl für Volkswirtschaftslehre, insbesondere Wirtschaftstheorie

Involved external institutions

Università degli studi di Milano IT Italy (IT) Università degli Studi di Trento IT Italy (IT)

How to cite

APA:

Casal, S., Ploner, M., & Sproten, A. (2019). FOSTERING THE BEST EXECUTION REGIME: AN EXPERIMENT ABOUT PECUNIARY SANCTIONS AND ACCOUNTABILITY IN FIDUCIARY MONEY MANAGEMENT. Economic Inquiry, 57(1), 600-616. https://dx.doi.org/10.1111/ecin.12575

MLA:

Casal, Sandro, Matteo Ploner, and Alec Sproten. "FOSTERING THE BEST EXECUTION REGIME: AN EXPERIMENT ABOUT PECUNIARY SANCTIONS AND ACCOUNTABILITY IN FIDUCIARY MONEY MANAGEMENT." Economic Inquiry 57.1 (2019): 600-616.

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