Fostering the Best Execution Regime An Experiment about Pecuniary Sanctions and Accountability in Fiduciary Money Management

Alec Sproten, Sandro Casal and Matteo Ploner

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: Asset management often involves a conflict of interests between investors and fund managers. A main goal of financial regulators is to identify and mitigate this conflict. This article focuses on measures that may foster protection of investors' interests. In an experiment capturing the essential elements of asset management, we find that managers' accountability does not prevent their opportunistic behavior if not backed by a threat of punishment. Further, investors inefficiently sanction managers if not completely aware of managers' choices. To effectively protect investors in financial intermediations, financial regulators should ensure both managers' accountability and a credible sanctioning system.

JEL-codes: C70 C91 D02 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-exp
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https://www.econstor.eu/bitstream/10419/145871/1/VfS_2016_pid_6978.pdf (application/pdf)

Related works:
Journal Article: FOSTERING THE BEST EXECUTION REGIME: AN EXPERIMENT ABOUT PECUNIARY SANCTIONS AND ACCOUNTABILITY IN FIDUCIARY MONEY MANAGEMENT (2019)
Working Paper: Fostering the best execution regime: An experiment about pecuniary sanctions and accountability in fiduciary money management (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145871

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