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Published, Version of Record (VoR)Open Access via Drexel Libraries Read and Publish Program 2026CC BY-NC-ND V4.0, Restricted
Journal article
Vanity in Teams
Journal of banking & finance, v 184, 107637
Mar 2026
Featured in Collection : Research Supported by Drexel Libraries' OA Programs
Abstract
We hypothesize that vanity amplifies realization utility in teams; admitting mistakes is particularly painful when mistakes have to be admitted to self and colleagues. Consistent with the Vanity hypothesis, U.S. stock funds run by teams hold on to losers when losers were initiated by a subset of the team (to avoid admitting a mistake to their non-initiating colleagues), when initiators of loser positions are more experienced (to avoid losing authority by admitting mistakes to junior colleagues), and when all colleagues agree that a position is a loser. Vanity is costly – losers held underperform by a risk-adjusted 1% annually.
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Details
- Title
- Vanity in Teams
- Creators
- Daniel Dorn (Corresponding Author) - Drexel University, FinancePramodkumar Yadav - The University of Sydney
- Publication Details
- Journal of banking & finance, v 184, 107637
- Publisher
- Elsevier
- Number of pages
- 16
- Grant note
- Owen Graduate School of Management at Vanderbilt University
We thank Nick Barberis, Justin Birru, Gjergji Cici, Naveen Daniel, Daan van Knippenberg, Michelle Lowry, Greg Nini, Hersh Shefrin, Meir Statman, participants at the FMA annual meeting, the New Zealand Finance Meeting, the Research in Behavioral Finance Conference, and seminar participants at the Indian Institute of Management Sambalpur for their comments. Pramod Kumar Yadav gratefully acknowledges research support from the Owen Graduate School of Management at Vanderbilt University.
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:001675040500001
- Scopus ID
- 2-s2.0-105029017998
- Other Identifier
- 991022148303904721
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business, Finance
- Economics