Agency and Transparency in Financial Markets

Abstract

We analyze incentive effects of transparency on delegated portfolio management. When portfolio return is observable, disclosure of portfolio composition decreases expected return and lowers the investor's ability to identify the manager's actual type. More information about the portfolio return before renewal of management agreement also decreases expected return, while, conditionally, it may provide more information about manager's actual ability.

Keywords

• transparency
• career concern
• delegated portfolio management
• şeffaflık
• kariyer kaygısı
• yetkilendirilmiş portföy yönetimi