AI Business LensTHE BUSINESS OF AI, FOR PEOPLE WHO TEACH IT OR LEARN FROM IT
NBER Working Papers · October 27, 2026 · On the brief until November 10, 2026

When Cash Wakes Up: Inertia in Institutional Money Market Funds and the Potential Effects of AI Disruption -- by Ali Hortaçsu, Younggeun Yoo

EconomicsFinance
THE AI ANGLE
Automating cash management to eliminate investor inattention

Researchers analyzed institutional cash management from 2010 to 2024 and found that over half of mutual funds never switched money market funds despite yield differences. Using a structural model, the authors showed that funds with inattentive investors extract higher profits and take more liquidity risk. If artificial intelligence automates cash management and eliminates investor inattention, fees and yield spreads would drop, but run risks and volatile redemptions would surge.

Summary written by AI Business Lens with an AI model from the article at nber.org. It is not the article, and the publisher has not reviewed it. For publishers.

THE TEACHING ANGLE
Removing investor inattention lowers fund fees and spreads, but it also multiplies run risks and redemption spikes.

Read the original at nber.org   Generate teaching or study materials

Instructors get discussion guides, assignments, and mini-cases. Students and readers get a plain summary, points to raise, an exercise, and a self-check. All built from the full article. A free account saves stories and gives you three generations. Stories stay on the brief for 14 days. After that this page keeps the link to the original.

More in Economics