Hedge fund managers charge management fees on assets under management (AUM) and incentive fees indexed to the high-water mark (HWM). We study the effects of fees and alpha on managerial dynamic leverage choice and valuation. Our main results are: (i) high-powered incentive fees encourage excessive risk taking, while management fees have the opposite effect; (ii) agency conflicts have significan...

We conduct an experiment to evaluate why individuals invest in high-fee index funds. In our experiments, subjects allocate $10,000 across four S&P 500 index funds and are rewarded for their portfolio's subsequent return. Subjects overwhelmingly fail to minimize fees. We can reject the hypothesis that subjects buy high-fee index funds because of bundled non-portfolio services. Search costs for f...

In a series of influential papers, Lester Brickman (2003a, 2003b, 2004) has argued that the income and effective hourly rate of tort lawyers using contingent fees has increased by 1400% since 1960 and that the market for contingent fee lawyers is uncompetitive as evidenced by lack of price advertising and uniform pricing across practitioners, cases and time. He also argues that contingent fee l...

BACKGROUND Advances in pharmaceuticals offer improved health outcomes for a wide range of illnesses, yet medicines are often inaccessible for many patients worldwide. One potential barrier to making medicines available to all is the cost of product registration, the fees for regulatory review and licensing for the sale of medicines beyond the cost of clinical trials, if needed. METHODS AND FI...