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Investing with Brain or Heart? A Field Experiment on Responsible Investment

Author

Listed:
  • Trond Døskeland

    (NHH Norwegian School of Economics, 5045 Bergen, Norway)

  • Lars Jacob Tynes Pedersen

    (NHH Norwegian School of Economics, 5045 Bergen, Norway)

Abstract

Socially responsible investment is increasingly prevalent in financial markets and is characterized by the integration of financial and nonfinancial objectives. This paper investigates the influence of wealth concerns and moral concerns on individual investors’ decisions to invest responsibly. We conduct a unique natural field experiment of investors in an online banking context, wherein we frame responsible investment with regard to either wealth or morality and study investors’ subsequent behavior. We find that wealth framing is more effective than moral framing for both information search and investment behavior. Our study contributes to the literature by providing real-life insight into how prosocial decision making in financial markets can be promoted. This paper was accepted by John List, behavioral economics .

Suggested Citation

  • Trond Døskeland & Lars Jacob Tynes Pedersen, 2016. "Investing with Brain or Heart? A Field Experiment on Responsible Investment," Management Science, INFORMS, vol. 62(6), pages 1632-1644, June.
    • Handle: RePEc:inm:ormnsc:v:62:y:2016:i:6:p:1632-1644
    DOI: 10.1287/mnsc.2015.2208
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    References listed on IDEAS

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    Cited by:

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    2. Benuzzi, Matteo & Klaser, Klaudijo & Bax, Karoline, 2024. "Which ESG+F dimension matters most to retail investors? An experimental study on financial decisions and future generations," Journal of Behavioral and Experimental Finance, Elsevier, vol. 41(C).
    3. Maria Cristina Rossi & Dario Sansone & Costanza Torricelli & Arthur van Soest, 2018. "Household Preferences for Socially Responsible Investments," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 18021, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".

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