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Article
Herding Behavior in Student Managed Investment Funds
Journal of Economics and Economic Education Research
  • Craig B. Caldwell
  • Steven D. Dolvin, Butler University
Document Type
Article
Publication Date
1-1-2012
Additional Publication URL
http://www.alliedacademies.org/public/journals/JournalDetails.aspx?jid=4
Abstract
Student Managed Investment Funds (SMIFs) have grown in number; unfortunately, there has been little research on the efficacy of these funds. We fill this gap by exploring the potential consequences of student investment management. We find that investment decisions are often impacted by herding behavior, which results in underperformance. We further examine characteristics that influence the likelihood of herding, finding that pre-existing knowledge of the company under consideration, as well as amplified time constraints, increase the probability that herding occurs. In contrast, we find that increased education, both general and targeted behavioral education, reduces the likelihood (and impact) of herding.
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Citation Information
Craig B. Caldwell and Steven D. Dolvin. "Herding Behavior in Student Managed Investment Funds" Journal of Economics and Economic Education Research Vol. 13 Iss. 2 (2012) p. 97 - 110
Available at: http://works.bepress.com/craig_caldwell/16/