2016
DOI: 10.1287/mnsc.2015.2208
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Investing with Brain or Heart? A Field Experiment on Responsible Investment

Abstract: S ocially 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 … Show more

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Cited by 78 publications
(36 citation statements)
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“…Moreover, incentives seem to crowd out motivation and “acceptable behavior” also when norms or social behavior are considered (Ariely et al ., ; Frey & Oberholzer‐Gee, ; Gneezy & Rustichini, 2000a,b). In line with this, Døskeland and Pedersen , p. 1641) argue that “financial arguments could potentially lead to a crowding‐out of any intrinsic motives [...]” for investing responsibly. We expect that altruistic investors in SRI are mainly concerned with doing good with their investments, as long as SRI returns are similar to or lower than those of conventional assets.…”
Section: Hypothesesmentioning
confidence: 95%
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“…Moreover, incentives seem to crowd out motivation and “acceptable behavior” also when norms or social behavior are considered (Ariely et al ., ; Frey & Oberholzer‐Gee, ; Gneezy & Rustichini, 2000a,b). In line with this, Døskeland and Pedersen , p. 1641) argue that “financial arguments could potentially lead to a crowding‐out of any intrinsic motives [...]” for investing responsibly. We expect that altruistic investors in SRI are mainly concerned with doing good with their investments, as long as SRI returns are similar to or lower than those of conventional assets.…”
Section: Hypothesesmentioning
confidence: 95%
“…Beal et al . (), Døskeland and Pedersen (), and Nilsson () find some investors to engage in SRI because they expect superior returns. Pecuniary motives also exist for institutional investors (Kumar & Page, ).…”
Section: Hypothesesmentioning
confidence: 99%
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“…Prior literature has considered how individuals evaluate investment options that combine financial payback and some form of social benefit. For instance, Døskeland and Pedersen () find that framing investments with positive social externalities in terms of their financial rather than social implications elicits more favorable evaluations. Zlatev and Miller () find that individuals prefer options that fulfill both self‐interest and social benefit when these are framed as “benevolent purchases” rather than as “self‐interested donations”.…”
mentioning
confidence: 99%
“…With few exceptions (Døskeland and Pedersen 2016;Scheck, Hochstädter, and Busch 2016), the empirical research on investors behavior toward SI usually subsumes investor's sustainable investment in a general category such as "SRI fund", 2 Interestingly, the distinction used in earlier years between "broad" and "core" SI strategies (Eurosif 2012) has recently been avoided in practice and led to stronger variation in SI strategy definitions and amounts reported (FNG 2018;SSF 2018). or "ESG investment strategy". Yet, sustainable investment strategies imply a broad range of very different non-financial and financial return perspectives.…”
Section: Sustainable Investment Strategiesmentioning
confidence: 99%