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Finance education and social preferences: Experimental evidence

Author

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  • McCannon, Bryan C.

Abstract

What impact does a finance education have on the social preferences and the resulting behaviors of individuals? Experiments of a free riding game are conducted where a wealth-creating investment decision is made. The contribution benefits the group, but the incentives are such that an individual, lacking social preferences, would rather make no contribution and free ride off others. It is shown that as one’s education in finance increases, less free riding occurs and more wealth is generated. Thus, education provided in finance promotes pro-social choices that generate wealth even when external incentives are absent.

Suggested Citation

  • McCannon, Bryan C., 2014. "Finance education and social preferences: Experimental evidence," Journal of Behavioral and Experimental Finance, Elsevier, vol. 4(C), pages 57-62.
    • Handle: RePEc:eee:beexfi:v:4:y:2014:i:c:p:57-62
    DOI: 10.1016/j.jbef.2014.10.001
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    Citations

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    Cited by:

    1. Rupali Misra & Sumita Srivastava & D. K. Banwet, 2019. "Are type B investors efficacious? Exploring role of personality in ambidextrous investment decision-making," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 46(1), pages 27-34, March.
    2. Pratobevera, Giuseppe, 2022. "Homework and finance students’ learning and achievement," Finance Research Letters, Elsevier, vol. 46(PB).
    3. McCannon, Bryan C. & Minuci, Eduardo, 2020. "Shill bidding and trust," Journal of Behavioral and Experimental Finance, Elsevier, vol. 26(C).
    4. Zamri Ahmad & Haslindar Ibrahim & Jasman Tuyon, 2017. "Behavior of fund managers in Malaysian investment management industry," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 9(3), pages 205-239, August.
    5. Zamri Ahmad & Haslindar Ibrahim & Jasman Tuyon, 2017. "Institutional investor behavioral biases: syntheses of theory and evidence," Management Research Review, Emerald Group Publishing Limited, vol. 40(5), pages 578-603, May.
    6. Zamri Ahmad & Haslindar Ibrahim & Jasman Tuyon, 2018. "Governance of Behavioural Biases in Asset Management Industry: Insights from Fund Managers in Malaysia," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 14(2), pages 65-102.
    7. Fan, Lu & Chatterjee, Swarn, 2018. "Application of situational stimuli for examining the effectiveness of financial education: A behavioral finance perspective," Journal of Behavioral and Experimental Finance, Elsevier, vol. 17(C), pages 68-75.

    More about this item

    Keywords

    Experiment; Finance education; Free ride; Social preference;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • G1 - Financial Economics - - General Financial Markets
    • H4 - Public Economics - - Publicly Provided Goods

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