The Influence of Urban and Nature Sounds on Risk-Taking in Investment Decisions: An Experimental Study

Abstract

The fundamental impact of different types of sound on risk behavior in investment decision-making is examined in an experiment with N = 238 participants. The study not only reveals, for the first time, the influence of noise on investment behavior but also explores the interactions that occur. To examine this effect, participants choose between risky and risk-free investments for their portfolios while being exposed to nature sounds, urban sounds or no sound. The findings indicate that an urban sound environment, compared to a nature sound environment, reduces risk-taking behavior. This effect is mediated by a lower score on the Helpfulness Concentration Index, which measures both perceived concentration ability and the disruptive or supportive influence of the sound environment. 

Our research contributes to the controversy surrounding the theoretical foundation of sound research by clarifying how sound influences behavior and identifying the underlying mediator of this effect. The results provide strong evidence for Attention Restoration Theory (Kaplan & Kaplan, 1989; Kaplan, 1995) and its proposed mediator of self-perceived concentration ability and attention. In contrast, they challenge the competing theoretical framework—commonly referred to as the Psychoevolutionary Approach or Stress Reduction Theory—which posits affect as the primary mediator (Ulrich, 1983; Ulrich et al., 1991).

Keywords: Behavioral Finance, Investment decision-making, Nature sound, Urban sound, Stock Trading, Financial Decision-Making, PANAS, Sound Environment, Risk Behavior