Positivity and Nature: How Images Increase Investment

Abstract

We use a novel online experiment to investigate the impact of emotional images on investment behavior. Participants are exposed to a nature-related and a non-nature set of images with varying degrees of valence during several investment decisions. We demonstrate that positive images significantly increase and negative images significantly decrease investment, despite the fact that the images do not provide additional information relevant to the investment tasks and should be disregarded by rational investors. We further show that exposure to nature-related images results in significantly higher investment compared to non-nature images. Our findings provide important insights for regulators, investors, and the investment industry and establish the basis for further research.

Keywords: Sustainability Images, Risk Taking, Emotional Arousal, Valence, Experimental Finance

JEL Classification: G11, G41