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To Be Good or To Be Better: Asset Managers Attitudes Towards Herding

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  • Lütje, Torben

Abstract

Based on a questionnaire survey the paper distinguishes between herding asset managers who try to be good and non-herding asset managers who try to be better than their competitors. It provides evidence for reputational herding and discusses herding managers\\\' working effort, preferred sources of information and investment horizon. Additionally, their risk taking behavior including their investment behavior in short-term tournament scenarios is analyzed. It is found that herding managers assess themselves as generally more risk averse than non-herding managers, but in the tournament they are willing to take more risk. This finding is ascribable to their fear of falling out of the herd.

Suggested Citation

  • Lütje, Torben, 2004. "To Be Good or To Be Better: Asset Managers Attitudes Towards Herding," Hannover Economic Papers (HEP) dp-297, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    • Handle: RePEc:han:dpaper:dp-297
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    References listed on IDEAS

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    More about this item

    Keywords

    Institutional investors; herding; risk aversion; tournament hypothesis;
    All these keywords.

    JEL classification:

    • 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

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