Scholars@Duke
Simon Gervais

Simon Gervais

Professor of Business Administration
Fuqua School of Business
simon.gervais@duke.edu
Box 90120, the Fuqua School of Business, Durham, NC 27708-0120
the Fuqua School of Business, Box 90120, Durham, NC 27708-0120

Selected Publications

Transparency and talent allocation in money management

Journal Article Review of Financial Studies · August 1, 2020 We construct and analyze the equilibrium of a model of delegated portfolio management in which money managers signal their investment skills via fund transparency. To lower the costs of transparency, high-skill managers rely on their performance to separat ... Full text Cite

Libertarian paternalism, information production, and financial decision making

Journal Article Review of Financial Studies · September 1, 2013 We develop a theoretical model to analyze the effects of libertarian paternalism on information production and financial decision making. Individuals in our model appreciate the information content of the recommendations made by a social planner. This affe ... Full text Cite

Legal protection in retail financial markets

Scholarly Edition · September 1, 2012 We model a retail financial institution that outsources its advice services to an intermediary, making the two parties jointly responsible for consumers' experience with the products. In this context, courts that enforce state-contingent legal rules are ne ... Full text Cite

Overconfidence, Compensation Contracts, and Capital Budgeting

Journal Article Journal of Finance · October 1, 2011 A risk-averse manager's overconfidence makes him less conservative. As a result, it is cheaper for firms to motivate him to pursue valuable risky projects. When compensation endogenously adjusts to reflect outside opportunities, moderate levels of overconf ... Full text Cite

Security design in initial public offerings

Journal Article Review of Finance · April 1, 2011 We investigate an IPO security design problem when information asymmetries across investors lead to a winner's curse. Firms that are riskier in down markets can lower the cost of going public by using unit IPOs, in which equity and warrants are combined in ... Full text Cite

Work ethic, employment contracts, and firm value

Journal Article Journal of Finance · April 1, 2009 We analyze how the work ethic of managers impacts a firm's employment contracts, riskiness, growth potential, and organizational structure. Flat contracts are optimal for diligent managers because they reduce risk-sharing costs, but they attract egoistic a ... Full text Cite

The positive effects of biased self-perceptions in firms

Journal Article Review of Finance · December 1, 2007 We study a firm in which the marginal productivity of agents effort increases with the effort of others. We show that the presence of an agent who overestimates his marginal productivity may make all agents better off, including the biased agent himself. T ... Full text Cite

Fund families as delegated monitors of money managers

Journal Article Review of Financial Studies · December 1, 2005 Because a money manager learns more about her skill from her management experience than outsiders can learn from her realized returns, she expects inefficiency in future contracts that condition exclusively on realized returns. A fund family that learns wh ... Full text Cite

The Role of Trading Halts in Monitoring a Specialist Market

Journal Article Review of Financial Studies · January 1, 2003 When a collection of specialists organize as an exchange, each can reap net private benefits at the expense of the exchange by quoting a privately optimal pricing schedule. Coordination makes all specialists and customers better off, but requires a system ... Full text Cite

The Role of Trading Halts in Monitoring a Specialist Market

Journal Article Review of Financial Studies · 2003 When a collection of specialists organize as an exchange, each can reap net private benefits at the expense of the exchange by quoting a privately optimal pricing schedule. Coordination makes all specialists and customers better off, but requires a system ... Cite

The high-volume return premium

Journal Article Journal of Finance · January 1, 2001 The idea that extreme trading activity contains information about the future evolution of stock prices is investigated. We find that stocks experiencing unusually high (low) trading volume over a day or a week tend to appreciate (depreciate) over the cours ... Full text Cite

Learning to be overconfident

Journal Article Review of Financial Studies · January 1, 2001 We develop a multiperiod market model describing both the process by which traders learn about their ability and how a bias in this learning can create overconfident traders. A trader in our model initially does not know his own ability. He infers this abi ... Full text Cite