We estimate the effects of peer benchmarking by institutional investors on asset prices. To identify trades purely due to peer benchmarking as separate from those based on fundamentals or private information, we exploit a natural experiment involving a change in a government-imposed...

What role does stock investment play in the transmission of monetary policy to the real economy? We study this question using a New Keynesian model with heterogeneous households. Following a monetary tightening, stock market participants rebalance their investments away from stocks, in line with...

Rankings are a pervasive feature of the finance industry. Although they have no direct monetary consequences, rankings provide utility for intrinsic (positive self-image) and extrinsic (status) reasons. We recruit a unique subject pool of 204 financial professionals and investigate how anonymous...

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...

The 2007-09 financial crisis highlighted the vulnerability of financial institutions linked by a complex web of credit default swap (CDS) contracts, sparking a wave of regulatory changes to the structure of the market. In this paper, we provide broad evidence on the evolution of the CDS market...

Risk-assessment and risk-taking in various forms are among the most important tasks financial professionals face in their daily work. A large body of experimental studies has shown a substantial effect of the decision domain (gain vs loss domain) on risk-taking, predominantly among students. In...

We document a highly significant, strongly nonlinear dependence of stock and bond returns on past equity-market volatility as measured by the VIX. We propose a new estimator for the shape of the nonlinear forecasting relationship that exploits additional variation in the cross section of...

Financial literacy and economic preferences are considered to be important drivers of health, income, and general well-being. In this paper we bridge the gap between studies on financial literacy and research on economic preferences by how they interplay with each other and the field behavior of...

In this paper we investigate how the experience of stock market shocks, like the COVID-19 crash, influences risk taking behavior. To isolate changes in risk taking from a variety of other confounding factors during stock market crashes, we ran controlled experiments with finance professionals in...