Cutthroats or comrades: Information sharing among competing fund managers

Bernhard Ganglmair (), Alex Holcomb and Noah Myung

MPRA Paper from University Library of Munich, Germany

Abstract: Recent evidence of correlated trading among networked fund managers provides an indication that professional investors exchange investment ideas. To examine the motivations underlying this type of collaboration, we design a laboratory experiment in which competing fund managers share ideas until either chance or one of the fund managers (by choice to obtain a competitive advantage) terminates the exchange. We find that managers are more willing, and likely, to share when their rival's ability and intention to share in return are high. For a manager's decision to share, subjective expectations about rivals' intentions matter more than common expectations about their ability.

Keywords: conversation; correlated trading; experimental finance; fund managers; hedge funds; information sharing; word-of-mouth communication (search for similar items in EconPapers)
JEL-codes: C72 C91 D8 G02 G14 G23 (search for similar items in EconPapers)
Date: 2016-05-06
New Economics Papers: this item is included in nep-exp, nep-fmk and nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:71506

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