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Transferable Deposits as a Screening Mechanism

Author

Listed:
  • David Lagziel

    (BGU)

  • Ehud Lehrer

    (TAU)

Abstract

We design incentive schemes for portfolio managers that screen low-skill managers: only the best portfolio managers, in terms of expected payoffs, agree to participate in a single-period investment. The results hold in general financial markets, where uninformed investors face managers of different capabilities, and can only observe their one-stage realized returns.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • David Lagziel & Ehud Lehrer, 2018. "Transferable Deposits as a Screening Mechanism," Working Papers 1808, Ben-Gurion University of the Negev, Department of Economics.
    • Handle: RePEc:bgu:wpaper:1808
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    File URL: http://in.bgu.ac.il/en/humsos/Econ/Workingpapers/1808.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Reward Schemes; Investment firms; Investment game; Market design; Portfolio management;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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