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Information capacity investment and financial stability under delegated asset management

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  • Ikeda, Akihiko
  • Osano, Hiroshi

Abstract

This paper examines the equilibrium implications of fund investors’ information capacity investments in mitigating agency problems under delegated asset management by improving the precision of information signals acquired by fund managers. Using comparative static analysis, we investigate how agency conflicts, the interaction between information capacity investment and information acquisition effort—whether substitutes or complements—and the growing institutionalization of asset management affect three key outcomes: information capacity investment; the likelihood of a market freeze, where a high-quality asset fails to circulate fully in the market; and the structure of performance-based pay for fund managers.

Suggested Citation

  • Ikeda, Akihiko & Osano, Hiroshi, 2026. "Information capacity investment and financial stability under delegated asset management," Journal of Banking & Finance, Elsevier, vol. 185(C).
    • Handle: RePEc:eee:jbfina:v:185:y:2026:i:c:s0378426626000099
    DOI: 10.1016/j.jbankfin.2026.107635
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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