Delegation Decisions in Finance
(2023) In Management Science 69(8). p.4828-4844- Abstract
- Based on an online experiment with a sample of finance professionals and participants from the general population (acting as clients), we examine drivers and motives of clients’ choices to delegate investment decisions to agents. We find that clients favor delegation to investment algorithms, followed by delegation to finance professionals compensated with an aligned incentive scheme, and lastly to finance professionals receiving a fixed payment for investing on behalf of others. We show that trust in investment algorithms or finance professionals, and clients’ propensity to shift blame on others increase the likelihood of delegation, whereas clients’ own decision-making quality is associated with a decrease in delegation frequency.
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/8c80d9c2-d739-4497-999c-8fe9c352fd6d
- author
- Holzmeister, Felix ; Holmén, Martin ; Kirchler, Michael ; Stefan, Matthias and Wengström, Erik LU
- organization
- publishing date
- 2023
- type
- Contribution to journal
- publication status
- published
- subject
- in
- Management Science
- volume
- 69
- issue
- 8
- pages
- 4828 - 4844
- publisher
- Informs
- external identifiers
-
- scopus:85168832673
- ISSN
- 0025-1909
- DOI
- 10.1287/mnsc.2022.4555
- language
- English
- LU publication?
- yes
- id
- 8c80d9c2-d739-4497-999c-8fe9c352fd6d
- date added to LUP
- 2022-03-25 15:47:45
- date last changed
- 2023-10-26 14:58:59
@article{8c80d9c2-d739-4497-999c-8fe9c352fd6d, abstract = {{Based on an online experiment with a sample of finance professionals and participants from the general population (acting as clients), we examine drivers and motives of clients’ choices to delegate investment decisions to agents. We find that clients favor delegation to investment algorithms, followed by delegation to finance professionals compensated with an aligned incentive scheme, and lastly to finance professionals receiving a fixed payment for investing on behalf of others. We show that trust in investment algorithms or finance professionals, and clients’ propensity to shift blame on others increase the likelihood of delegation, whereas clients’ own decision-making quality is associated with a decrease in delegation frequency.}}, author = {{Holzmeister, Felix and Holmén, Martin and Kirchler, Michael and Stefan, Matthias and Wengström, Erik}}, issn = {{0025-1909}}, language = {{eng}}, number = {{8}}, pages = {{4828--4844}}, publisher = {{Informs}}, series = {{Management Science}}, title = {{Delegation Decisions in Finance}}, url = {{http://dx.doi.org/10.1287/mnsc.2022.4555}}, doi = {{10.1287/mnsc.2022.4555}}, volume = {{69}}, year = {{2023}}, }