CISS Award (2/3)

Today we will talk about the work of Boris Galarza from Peru who won the second place (tied with Javier Olivera). Boris analyses the demand and supply in the pension fund managers (PFM) industry. Using very advanced methods he finds that workers decides which PFM will manage their funds based on promotion and not on profitability or fees. On the supply side, he finds that sales cost plays a double role: as sunk cost to entry into the market and as promotion cost to maintain market share. This situation, argues the author, limits the possibility to lower cost and fees.