Morally Lucky Investors: We Find Profitable Investments More Moral Although We Think We Should Not

Abstract

Moral luck means that an actor is morally praised or blamed for an action whose outcome she could not influence. We investigate the importance of this phenomenon in the realm of investments that are increasingly subject to ethical evaluation. We use an online experiment to examine whether people’s moral evaluation of an investment decision depends on its arbitrary outcome and whether their interpretation of the nature of the decision is driven by the outcome. Our results show that given investments are considered more moral if they turn out to be profitable than if they turn out to be unprofitable. Moreover, profitable investments are more often labeled “investment” instead of “speculation” than unprofitable ones. This observation is stable across different investment contexts. These findings suggest that we have to be careful with the increasing moralization of investment decisions and be sensitive to our cognitive biases.

Keywords: (im-)moral investment, moral luck, speculation, Gambling, bounded ethicality, vignette experiment