Timing and selectivity of mutual fund managers: An empirical test of the behavioral decision-making theory

Classical decision-making theory suggests that decisions made by an individual or a team of decision makers should lead to the same performance outcome. Conversely, behavioral decision-making theory argues that decisions made by teams result in superior micro or macro forecasts and performance outcomes. Our tests using mutual funds support the classical decision-making theory. The empirical results are time invariant and robust with respect to the selected index or model specification.