Selling Fast and Buying Slow: Heuristics and Trading Performance of Institutional Investors

This research analyzes a dataset of institutional investors managing portfolios averaging $573 million, revealing skill in buying decisions but substantial underperformance in selling, even compared to random strategies.

The authors attribute this to asymmetric cognitive effort: deliberate processes for buying versus rushed, heuristic-driven selling influenced by salience bias.

Published in The Journal of Finance in 2023, it won the Dimensional Fund Advisors Prize.