Search results for: Author=Lindner, Florian [3]

2018
Bubbles and Financial Professionals
2018/09
Max Planck Institute for Research on Collective Goods
Bonn
2018
Abstract
The efficiency of financial markets and their potential to produce bubbles are central topics in academic and professional debates. Yet, surprisingly little is known about the contribution of financial professionals to price efficiency. To close this gap, we run 86 experimental markets with 294 professionals and 384 students. We report that professional markets with bubble-drivers—capital inflows or high initial capital supply—are susceptible to bubbles, but they are significantly more efficient than student markets. In a survey with 245 professionals and students we show that cognitive
Delegated Decision Making and Social Competition in the Finance Industry
2018/08
Max Planck Institute for Research on Collective Goods
Bonn
2018
Abstract
Two aspects of social context are central to the finance industry. First, financial professionals usually make investment decisions on behalf of third parties. Second, social competition, in the form of performance rankings, is pervasive. Therefore, we investigate professionals’ risk-taking behavior under social competition when investing for others. We run online and lab-in-the-field experiments with 965 financial professionals and show that professionals increase their risk taking for others when they lag behind. This effect, however, disappears when professionals’ incentives are flat. Additional survey evidence from 1,349 respondents reveals that professionals’ preferences for high rankings are significantly stronger than the general population’s.
2015
Strive to be first or avoid being last: An experiment on relative performance incentives
Games and Economic Behavior
94
39-56
2015