We survey theoretical developments in the literature on the limits of arbitrage. This literature
investigates how costs faced by arbitrageurs can prevent them from eliminating mispricings …

This paper provides a selective review of the theoretical literature on delegated portfolio
management as a principal–agent relationship. The main focus of the paper is to review the …

We develop a general equilibrium model of government policy choice in which stock prices
respond to political news. The model implies that political uncertainty commands a risk …

We present a new model of investors delegating portfolio management to professionals
based on trust. Trust in the manager reduces an investor's perception of the riskiness of a …

The question of whether and how mutual fund managers provide valuable services for their
clients motivates one of the largest literatures in finance. One candidate explanation is that …

This study compares the relations between asset flow and performance in the retail mutual
fund and fiduciary pension fund segments of the money management industry, and relate …

We propose a dynamic equilibrium model of a multi-asset market with stochastic volatility
and transaction costs. Our key assumption is that investors are fund managers, subject to …

We propose a theory of momentum and reversal based on flows between investment funds.
Flows are triggered by changes in fund managers' efficiency, which investors either observe …

We consider an economy populated by institutional investors alongside standard retail
investors. Institutions care about their performance relative to a certain index. Our framework …

We exploit a novel natural experiment to establish a causal relation between media attention
and consumer investment behavior, independent of the conveyed information. Our findings …