Managerial behavior in fund tournaments—the impact of TrueSkill

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Date

2021-01-09

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Abstract

Measuring mutual fund managers’ skills by Microsoft’s TrueSkill algorithm, we find highly skilled managers to behave self-confident resulting in higher risk-taking in the second half of the year compared to less skilled managers. Introducing the TrueSkill algorithm, which is widely used in the e-sports community, to this branch of literature, we can replicate previous findings and theories suggesting overconfidence for mid-years winners.

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Keywords

Fund tournament, Skill, Risk-shifting, TrueSkill, Bayesian network

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