When cheaper is better: fee determination in the market for equity mutual funds

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dc.contributor.author Gil-Bazo, Javier
dc.contributor.author Ruiz-Verdú, Pablo
dc.date.accessioned 2006-11-07T11:23:34Z
dc.date.available 2006-11-07T11:23:34Z
dc.date.issued 2005-06
dc.identifier.uri http://hdl.handle.net/10016/113
dc.description.abstract In this paper, we develop a model of the market for equity mutual funds that captures three key characteristics of this market. First, there is competition among funds. Second, fund managers' ability is not observed by investors before making their investment decisions. And third, some investors do not make optimal use of all available information. The main results of the paper are that 1) price competition is compatible with positive mark-ups in equilibrium; and 2) worse-performing funds set fees that are greater or equal than those set by better-performing funds. These predictions are supported by available empirical evidence.
dc.format.extent 465479 bytes
dc.format.mimetype application/pdf
dc.language.iso eng
dc.language.iso eng
dc.relation.ispartofseries Workings Paper. Bussiness Economics
dc.relation.ispartofseries 2005-09
dc.title When cheaper is better: fee determination in the market for equity mutual funds
dc.type workingPaper
dc.subject.eciencia Empresa
dc.rights.accessRights openAccess
dc.identifier.repec wb054309
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