Information and Investment Under Uncertainty
15 Pages Posted: 13 May 2016 Last revised: 7 Sep 2016
Date Written: September 3, 2016
In a model of mutual fund investor learning about managerial ability, we investigate how investment decisions depend on both past returns and non-return information. We show that non-return information affects investors' reliance on past returns as well as their decision to participate. Our results have important consequences for the relationship between flows of money and past fund performance.
Keywords: Mutual Fund, Investor Learning, Flow-Performance Relationship
JEL Classification: G11, G20, G23
Suggested Citation: Suggested Citation