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Political Cognitive Biases Effects on Fund Managers' Performance

33 Pages Posted: 19 Jul 2016 Last revised: 15 Feb 2017

Marian Moszoro

George Mason University - Department of Economics; George Mason University - Interdisciplinary Center for Economic Science (ICES); Cornell University - CPIP

Michael Bykhovsky

Center for Open Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 11, 2017

Abstract

We assembled a comprehensive dataset of equity hedge funds performance and matched the managers' political affiliation by their partisan contributions. We document higher returns of funds managed by Democrats for 10 subsequent months --- from December 2008 to September 2009. We conjecture that the conjunction of the financial crisis, Obama's election, and politically polarized interpretation of the US central bank policy during that period had an asymmetric impact on hedge fund managers' perception. In other periods, when the political discourse did not involve central bank policy, there was no statistically significant difference in fund managers’ performance depending on their political beliefs.

Keywords: Political Biases, Money Managers Performance

JEL Classification: D72, G11, G14

Suggested Citation

Moszoro, Marian and Bykhovsky, Michael, Political Cognitive Biases Effects on Fund Managers' Performance (February 11, 2017). Available at SSRN: https://ssrn.com/abstract=2811350 or http://dx.doi.org/10.2139/ssrn.2811350

Marian W. Moszoro (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://economics.gmu.edu/people/mmoszoro

George Mason University - Interdisciplinary Center for Economic Science (ICES) ( email )

400P Truland Building
George Mason University
Fairfax, VA 22030
United States

Cornell University - CPIP ( email )

Cornell Program in Infrastructure Policy
Ithaca, NY 14853
United States

HOME PAGE: http://www.human.cornell.edu/pam/cpip/people.cfm

Michael Bykhovsky

Center for Open Economics ( email )

San Francisco, CA
United States

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