Behavioral Intervention Construal: A Framework for Understanding Inferences from Behavioral Interventions
Managers and policymakers frequently use behavioral interventions—including incentives and messaging campaigns—to influence people’s behavior. They often choose an intervention by asking whether it will make a desired behavior easier, cheaper, or more attractive. Our research suggests they should also ask a second question: “What could this intervention unintentionally communicate?” For instance, interventions can signal that an organization is self-interested or trying to control people’s choices.
Holding Horizon: A New Measure of Active Investment Management
This article introduces a new holding horizon measure of active management and examines its relation to future risk-adjusted fund performance (alpha). Our measure reveals a wide cross-sectional dispersion in mutual fund investment horizons, and shows that long-horizon funds exhibit positive future long-term alphas by holding stocks with superior long-term fundamentals. Further, stocks largely held by long-horizon funds outperform stocks largely held by short-horizon funds by more than 3%annually, adjusted for risk, over the following 5-year period.