Munich Personal RePEc Archive

Cutthroats or comrades: Information sharing among competing fund managers

Ganglmair, Bernhard and Holcomb, Alex and Myung, Noah (2016): Cutthroats or comrades: Information sharing among competing fund managers.

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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.

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