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Team Disposition Effects: Vanity or Groupthink?
SSRN Electronic Journal
2022
Abstract
Team-managed mutual funds exhibit a disposition effect: they are reluctant to sell losers relative to winners. This propensity is costly as winners sold outperform losers held by 56bp during the next quarter relative to stocks with similar size, book-to-market, and momentum characteristics. Disposition effects are strongest when positions are initiated by a subset of the team who thus bears special responsibility. Disposition behavior is weaker in positions initiated by all team members. Our results suggest that team disposition effects are primarily due to the difficulty of admitting mistakes to peers (vanity); conformity to in-group pressures (groupthink) plays a lesser role
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Details
- Title
- Team Disposition Effects
- Creators
- Daniel Dorn - Drexel University
- Publication Details
- SSRN Electronic Journal
- Publisher
- SSRN
- Resource Type
- Other
- Language
- English
- Academic Unit
- Finance
- Other Identifier
- 991020537633104721