Experimental evidence on socially responsible investments – The role of preferences and information for high net worth investors

Last registered on May 03, 2022
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Pre-Trial

Trial Information

General Information

Title
Experimental evidence on socially responsible investments – The role of preferences and information for high net worth investors
RCT ID
AEARCTR-0009341
Initial registration date
May 02, 2022

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
May 03, 2022, 9:48 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Germany
Region
Europe

Primary Investigator

Name
Fabian Braun
Affiliation
Johannes Gutenberg University Mainz / Leibniz Institute for Financial Research SAFE
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Other Primary Investigator(s)

PI Name
Andrej Gill
PI Affiliation
Johannes Gutenberg University Mainz / Leibniz Institute for Financial Research SAFE
Contact Investigator
PI Name
Florian Hett
PI Affiliation
Johannes Gutenberg University Mainz / Leibniz Institute for Financial Research SAFE
Contact Investigator

Additional Trial Information

Status
In development
Start date
2022-05-05
End date
2023-12-31
Keywords
Behavior, Environment & Energy, Finance & Microfinance
Additional Keywords
ESG, altruism, warm glow giving, information experiment
JEL code(s)
G11; G41; G50;
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We study the role of preferences and information for socially responsible investments (SRI) in an incentivized online experiment with high net worth investors and combine this data with administrative data of real portfolio holdings of the same investors. We analyze which investors buy sustainable stocks, to what extent are they willing to pay for information about the sustainability of stocks and how investors react to information about the performance of sustainable stocks. To address these questions, we experimentally elicit altruism and warm glow and combine these measures with survey evidence, administrative data of real investments and the outcomes in an incentivized stock market game. Furthermore, we analyze the effect of information about the performance of sustainable investments on information search and investment behavior in our stock market game and the real-world portfolios of the participating investors.
External Link(s)

Registration Citation

Citation
Braun, Fabian, Andrej Gill and Florian Hett. 2022. "Experimental evidence on socially responsible investments – The role of preferences and information for high net worth investors." AEA RCT Registry. May 03. https://doi.org/10.1257/rct.9341-1.0
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Experimental Details

Interventions

Intervention(s)
We implement an incentivized online stock market game and study individual investment decisions in different treatments. After collecting baseline demand for sustainable investments, we exogenously vary information on the performance of firms with a low ESG risk profile between different groups and observe investors reaction to that new information in our incentivized stock market game, in the demand for more information and in real world portfolios of the same investors.
Intervention Start Date
2022-05-05
Intervention End Date
2022-07-31

Primary Outcomes

Primary Outcomes (end points)
Investments in sustainable stocks;
Wtp for ESG risk scores;
Demand for Information on sustainable investments;
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We target high net worth individuals of a private bank and implement an online experiment where individuals participate in an online stock market game. We first collect baseline information about the demand for ESG in the stock market game. In the next step, our intervention randomly assigns information about the performance of stocks with a low ESG risk score to the participants. 50% of the sample receives information of real studies which tell them that low ESG risk stocks outperform (riskadjusted), while the remaining 50% receive information of real studies which tell that low ESG risk stocks underperform (risk adjusted). We observe individuals reaction in the stock market game, in their real world portfolio decisions and in their demand for more information on ESG matters.
Experimental Design Details
The exact sample size depends heavily on the success of the marketing campaign of our project partner (the private bank). We plan to recruit approximately 140 participants who successfully complete the experiment plus a 10% buffer for participants who are captured by one of our exclusion rules.
Randomization Method
Computer-based randomization by otree
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
140 investors
Sample size: planned number of observations
140 investors
Sample size (or number of clusters) by treatment arms
information treatment:
70 investors: sustainable stocks outperform conventional stocks treatment;
70 investors: sustainable stocks underperform conventional stocks treatment;
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
For the information treatment in hypothesis 3, we divide the sample evenly between the two different groups (70 participants in each group). A sample size of 140 in total gives us 80% power of finding an effect size of 4.25 points (Cohen´s d = 0.48) at an alpha of 5%. The power calculation here shows the result of a between group comparison and does not account for the fact that we will do an individual fixed effect regression. Thus, the results can be considered as lower bound. To analyze hypothesis 4, we use the same groups than for hypothesis 3 (70 participants in each group). A sample size of 140 in total gives us 80% power of finding an effect size of 21.68 percentage points (Cohen´s h = 0.48) at an alpha of 5%.
Supporting Documents and Materials

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IRB

Institutional Review Boards (IRBs)

IRB Name
Joint Ethics Committee of the Faculty of Economics and Business Administration of Goethe University Frankfurt and the Gutenberg School of Management & Economics of the Faculty of Law, Management and Economics of Johannes Gutenberg University Mainz
IRB Approval Date
2021-10-08
IRB Approval Number
N/A
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials