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Title:What renders financial advisors less treacherous? On commissions and reciprocity PDF Logo
Authors:Popova, Vera
Issue Date:2010
Series/Report no.:Jena economic research papers 2010,036
Abstract:An advisor is supposed to recommend a financial product in the best interest of her client. However, the best product for the client may not always be the product yielding the highest commission (paid by product providers) to the advisor. Do advisors nevertheless provide truthful advice? If not, will a voluntary or obligatory payment by a client induce more truthful advice? According to the results, only the voluntary payment reduces the conflict of interest faced by advisors.
Subjects:financial advisors
moral hazard
reciprocity
experiments
JEL:C91
D82
D03
L15
M52
Document Type:Working Paper
Appears in Collections:Jena Economic Research Papers, MPI für Ökonomik

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