The main unresolved issue in the mutual fund literature is the fact that funds charge high fees even though most of them underperform and experts have advised against investing with them for decades. People may be willing to pay high fees if they suffer from misinference about mutual fund performance and chase funds that are overperforming simply because they were lucky or the mutual fund company systematically closes underperforming funds. To better understand fund fees, we run a market experiment in which managers set fees and investors accept or decline after they were randomly matched in each of multiple rounds. In each round, managers can also decide whether or not to delete their history. Finally, we test whether the results hold up under competition. Even though risk averse investors should never invest, high fees are prevalent throughout all treatments.