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

27 Pages Posted: 17 Apr 2012 Last revised: 10 Jan 2015

See all articles by Trond Doskeland

Trond Doskeland

Norwegian School of Economics (NHH) - Department of Business and Management Science

Lars Jacob Tynes Pedersen

NHH Norwegian School of Economics

Date Written: Janurary 5, 2015

Abstract

Socially responsible investment (SRI) 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.

Keywords: behavioral economics, field experiment, household finance, investor behavior, socially responsible investment

JEL Classification: C93, G11, G20

Suggested Citation

Doskeland, Trond and Pedersen, Lars Jacob Tynes, Investing with Brain or Heart? A Field Experiment on Responsible Investment (Janurary 5, 2015). Available at SSRN: https://ssrn.com/abstract=2040696 or http://dx.doi.org/10.2139/ssrn.2040696

Trond Doskeland (Contact Author)

Norwegian School of Economics (NHH) - Department of Business and Management Science ( email )

Helleveien 30
Bergen, NO-5045
Norway

Lars Jacob Tynes Pedersen

NHH Norwegian School of Economics ( email )

Helleveien 30
N-5045 Bergen
Norway

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