The Behavior of Intoxicated Investors: The role of institutional investors in propagating the crisis of 2007-2008
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We thank Brad Barber, John Chalmers, Joe Chen, Kent Daniel, Diane Del Guercio, Doug Diamond, Roger Edelen, Ken French, Alessandro Gavazza, Gary Gorton, Zhiguo He, Clemens Sialm, Chester Spatt, and the conference and seminar participants of the NBER Project on Market Institutions and Financial Market Risk conference, the 2010 FIRS Conference (Florence), the 2010 WFA (Victoria), European Central Bank, INSEAD, UC Davis, UC San Diego (Rady), and University of Oregon (Lundquist) for suggestions and comments. We gratefully acknowledge the financial support from the INSEAD/Wharton Alliance. An earlier draft of this paper was titled "The role of institutional investors in propagating the financial crisis." All errors and omissions are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.