Are all professional investors sophisticated?

Lukas Menkhoff (), Maik Schmeling and Ulrich Schmidt

Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover from Universität Hannover, Wirtschaftswissenschaftliche Fakultät

Abstract: Existing empirical evidence is inconclusive on whether professional investors show sophisticated behavior or not, a question which is at the heart of market efficiency. This ambiguous evidence is mostly based on trading data or laboratory evidence, which each has its limitations. We complement these approaches by conducting a survey of 500 investors, including several measures of sophistication, three relevant groups of investors and essential control variables. We find that both professional investors and laymen do indeed show unsophisticated investment behavior on aggregate. Furthermore, while some professional investors - institutional investors - behave at least more sophisticated than laymen, other professionals - investment advisors - seem to do even worse.

Keywords: Institutional investors; investment advisors; individual investors; investment behavior (search for similar items in EconPapers)
JEL-codes: G1 D80 (search for similar items in EconPapers)
Date: 2008-04
View list of references

Downloads: (external link)
http://www.wiwi.uni-hannover.de/Forschung/Diskussionspapiere/dp-397.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:han:dpaper:dp-397

Access Statistics for this paper

More papers in Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover from Universität Hannover, Wirtschaftswissenschaftliche Fakultät
Contact information at EDIRC.
Series data maintained by Dietrich, Karl ().