Information and Investment Under Uncertainty

15 Pages Posted: 13 May 2016 Last revised: 7 Sep 2016

See all articles by Ariadna Dumitrescu

Ariadna Dumitrescu

ESADE Business School

Javier Gil-Bazo

Universitat Pompeu Fabra; Barcelona Graduate School of Economics (Barcelona GSE)

Date Written: September 3, 2016

Abstract

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, Fl‡ow-Performance Relationship

JEL Classification: G11, G20, G23

Suggested Citation

Dumitrescu, Ariadna and Gil-Bazo, Javier, Information and Investment Under Uncertainty (September 3, 2016). Available at SSRN: https://ssrn.com/abstract=2779224 or http://dx.doi.org/10.2139/ssrn.2779224

Ariadna Dumitrescu

ESADE Business School ( email )

Av. Pedralbes 60-62
Barcelona, 08034
Spain

Javier Gil-Bazo (Contact Author)

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas, 25-27
Barcelona, 08005
Spain

Barcelona Graduate School of Economics (Barcelona GSE) ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

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