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Altruism versus Egoism in Investment Decisions

48 Pages Posted: 3 Jun 2017 Last revised: 7 Aug 2017

Daniel Brodback

University of Muenster - Finance Center Muenster

Nadja Guenster

University of Muenster - Finance Center Muenster; University of California, Berkeley

David Mezger

KPMG AG

Date Written: June 1, 2017

Abstract

We provide survey evidence that personal values have an impact on individual investment decisions, in particular the decision to invest socially responsible. Our findings show that there is a positive link between altruistic values and the relative importance of social responsibility. This effect is stronger when individuals believe that they can make a positive social or environmental impact with their investments, or when they feel morally obliged to invest responsibly. If altruistic individuals associate responsible investments with higher returns, it decreases their motivation to invest responsibly. Egoistic values are negatively associated with the decision to invest responsibly. Egoism only leads to an increased relative importance of social responsibility when individuals expect higher returns from holding responsible assets.

Keywords: Socially Responsible Investing, Survey, Investment Decisions, Psychological Values

JEL Classification: A13, D64, G11

Suggested Citation

Brodback, Daniel and Guenster, Nadja and Mezger, David, Altruism versus Egoism in Investment Decisions (June 1, 2017). Available at SSRN: https://ssrn.com/abstract=2978660

Daniel Brodback (Contact Author)

University of Muenster - Finance Center Muenster ( email )

Universit├Ątsstra├če 14-16
Muenster, 48143
Germany
+492518321964 (Phone)

Nadja Guenster

University of Muenster - Finance Center Muenster ( email )

Universitatsstr. 14-16
Muenster, 48143
Germany

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

David Mezger

KPMG AG ( email )

The Squaire
Frankfurt, 60549
Germany

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