Piccolo, S and Puopolo, GW and Vasconcelos, LI (2016) Non-Exclusive Financial Advice. Review of Finance, 20 (6). pp. 2079-2123. DOI https://doi.org/10.1093/rof/rfv055
Piccolo, S and Puopolo, GW and Vasconcelos, LI (2016) Non-Exclusive Financial Advice. Review of Finance, 20 (6). pp. 2079-2123. DOI https://doi.org/10.1093/rof/rfv055
Piccolo, S and Puopolo, GW and Vasconcelos, LI (2016) Non-Exclusive Financial Advice. Review of Finance, 20 (6). pp. 2079-2123. DOI https://doi.org/10.1093/rof/rfv055
Abstract
We propose a simple model of non-exclusive financial advice in which two households rely on a self-interested (common) expert to make their investment choices. There is only one source of risk, and the expert is privately informed about the risky asset's volatility. When monetary transfers are unenforceable, we show that investors may delegate their investment decisions to the expert. When doing so, however, they impose restrictions on her choices which crucially depend on whether the expert perceives investors' asset allocations as complements or as substitutes. Finally, we analyze the implications of non-exclusivity in financial advice on investment behavior and welfare, and highlight a set of novel testable implications.
Item Type: | Article |
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Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HG Finance |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 27 Nov 2015 13:07 |
Last Modified: | 24 Oct 2024 19:32 |
URI: | http://repository.essex.ac.uk/id/eprint/15540 |
Available files
Filename: Non Exclusive Financial Advice.pdf