Systematic Career Concerns

50 Pages Posted: 1 Oct 2016 Last revised: 8 Nov 2018

See all articles by Steven G. Malliaris

Steven G. Malliaris

University of Georgia - Department of Banking and Finance

Date Written: November 7, 2018


In a model where investors face uncertainty about the prevalence of skill among money managers, managers' collective performance carries information about the quality of the managerial pool. When peers perform well, investors correctly infer that even moderately-performing managers are more likely to be good, so those managers may receive net inflows despite their poorer relative performance. As investors become more optimistic about aggregate managerial ability, an average manager's willingness to hold assets that expose her to career risk increases, causing a corresponding price impact. Price impacts are largest for moderately risky assets because, unlike the safest or riskiest assets, they expose managers to state-dependent career risk.

Keywords: reputation, flight to quality, career concerns

JEL Classification: G11, G23

Suggested Citation

Malliaris, Steven G., Systematic Career Concerns (November 7, 2018). Available at SSRN: or

Steven G. Malliaris (Contact Author)

University of Georgia - Department of Banking and Finance ( email )

Terry College of Business
Athens, GA 30602-6253
United States

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