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Motives for delegating financial decisions

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  • Freer, Mikhail
  • Friedman, Daniel
  • Weidenholzer, Simon

Abstract

Why do some investors delegate financial decisions to supposed experts? We report an on-line experiment designed to disentangle four possible motives. About 800 investors drawn from the Prolific subject pool choose whether or not to delegate a real-stakes choice among lotteries to a previous investor (a “designee”) after seeing information on the performance of several available designees. We find that a surprisingly large fraction of investors delegate even trivial choice tasks, suggesting a major role for blame shifting motives. A larger fraction of investors delegate our more complex tasks, suggesting that decision costs play a role for some investors. Some investors who delegate choose a low quality designee with high earnings, suggesting a role for chasing past performance. We find no evidence for a fourth possible motive, that delegation makes risk more acceptable.

Suggested Citation

  • Freer, Mikhail & Friedman, Daniel & Weidenholzer, Simon, 2026. "Motives for delegating financial decisions," Games and Economic Behavior, Elsevier, vol. 159(C), pages 56-70.
    • Handle: RePEc:eee:gamebe:v:159:y:2026:i:c:p:56-70
    DOI: 10.1016/j.geb.2026.05.012
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    Keywords

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    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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