We study the short- and long-term valuation effects of Swedish takeovers. Using a sample of 93 bidding firms that acquired 101 targets between 1980 and 1995, we find that diversifying acquisitions lead to a negative market reaction and deterioration of the operating performance of the bidder....

We study the short- and long-term valuation effects of Swedish takeovers. Using a sample of 93 bidding firms that acquired 101 targets between 1980 and 1995, we find that diversifying acquisitions lead to a negative market reaction and deterioration of the operating performance of the bidder....

By running a battery of incentivized and non-incentivized experiments with fund managers from four countries in the European Union, we investigate the impact of fund managers' cognitive skills and economic preferences on the dynamics of the mutual funds they manage. First, we find that fund...

To study whether clients benefit from delegating financial investment decisions to an agent, we run an investment allocation experiment with 408 finance professionals (agents) and 550 participants from the general population (clients). In several between subjects treatments, we vary the mode of...

We run an online experiment with finance professionals and subjects from the general population (clients) to examine drivers and implications of clients' delegation decisions. We find that clients favor delegation to investment algorithms, followed by delegation to finance professionals with...

Since the financial crisis, the behavior and personality traits of finance professionals have come under scrutiny. As comprehensive scientific findings are lacking, we run artefactual field experiments with finance professionals and a random sample of the working population to investigate...

This paper uses agent-based simulation to analyze how financial markets are affected by market participants with convex incentives, e.g. option-like compensation. We document that convex incentives are associated with (i) higher prices, (ii) larger variations of prices, and (iii) larger bid-ask...

Since the financial crisis, the behavior and personality traits of finance professionals have come under scrutiny. As comprehensive scientific findings are lacking, we run artefactual field experiments with finance professionals and a random sample of the working population to investigate...

Incentive schemes resulting in tournament competition have been criticized for inducing excessive risk-taking among financial market participants. In this paper we investigate the influence of relative performance-based incentive schemes on risk-taking and portfolio choice. In particular, we...

One potential reason for bubbles evolving prior to the financial crisis was excessive risk taking stemming from option-like incentive schemes in financial institutions. By running laboratory asset markets, we investigate the impact of option-like incentives on price formation and trading...