What individual investors value: Some Australian evidence

Investors’ reactions to companies’ stakeholder management: the crucial role of assumed costs and perceived sustainability

“…First, we used scenario studies to test our hypotheses because they allow for analyzing the factors that drive individuals' investment decisions in a controlled setting (Ackert and Church 2006). This approach is common in studies examining factors that affect individual investors' decisionmaking (Barreda-Tarrazona et al 2011;Clark-Murphy and Soutar 2004;Hofmann et al 2008;Pasewark and Riley 2010;Schwarzkopf 2006). Moreover, it is important for enhancing clarity about the specific factors influencing individuals' investment decisions, as these have so far largely remained a ''black box'' (Schijven andHitt 2012, p. 1250) due to the database methodologies predominantly employed in previous research.…”

Aesthetics of stock investments

“…In effect, since some confidence of such a nature is quite necessary for any investment decision to be made, some level of apprehended beauty in the above "unity-in-variety" sense may actually be necessary for an individual to invest in a company's stock. Moreover, considering the alternative terms of "familiarity in the unfamiliar" -to what extent one feels oneself familiar with how the company's business seems to run -there is vast evidence that investors tend to prefer investing in such companies' stocks that are familiar to them (Clark-Murphy and Soutar 2004;Coval and Moskowitz 1999;Frieder and Subrahmanyam 2005;Grinblatt and Keloharju 2000;Huberman 2001;Merton 1987). Note also that the significance of the felt familiarity in the unfamiliar is likely to be ever-increasing due to the globalized, technology and Internet-enabled marketplaces and information channels that make individuals face an abundance of chaotic company information 24 hours a day (Barber and Odean 2008;Zwick, Denegri-Knott, and Schroeder 2007;Zwick and Dholakia 2006b).…”

“…Third perspective: beyond financials -investment based on beauty of things represented by the firm In the above two sections, I have discussed such aesthetic perspectives to investments that have not radically questioned the traditional finance research assumption: that investments will be made on the basis of the financial return-risk profiles of companies' stocks (Clark-Murphy and Soutar 2004). With the third and last perspective introduced in this section, however, I will somewhat diverge from that assumption by introducing a potential motive that may guide people's investments along with the (main) motive of maximizing financial returns at given risk levels.…”

“…The first two perspectives provided do not necessarily question the traditional finance research assumption that people will make investments on the (sole) basis of the expected financial return-risk profiles of companies' stocks (Clark-Murphy and Soutar 2004). First, I explained that since the calculations of expected future financial returns concerning any investment are highly complex and inherently uncertain, people are likely to reach their eventual investment decisions always partly based on intuition, characteristically aesthetic.…”

“…This is because the two perspectives do not necessarily question the traditional investment/ finance research assumption that investments will be motivated (solely) by the expected financial return-risk profiles of companies' stocks (Clark-Murphy and Soutar 2004). The first perspective is based on the notion that most human decisions and actions are partly based on intuition -characteristically aesthetic -besides logical reasoning and calculation (e.g., Ramírez 2005;Root-Bernstein 2002;Strati 1999).…”