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Working paper
Doing more with less: Behavioral insights for anti-piracy messages
In: The information society: an international journal, Band 38, Heft 5, S. 388-393
ISSN: 1087-6537
Exclusion Strategy in Socially Responsible Investment: One Size Does Not Fit All
In: JBEF-D-23-00093
SSRN
Moment Risks: Investment for Self and for a Firm
In: Decision analysis: a journal of the Institute for Operations Research and the Management Sciences, INFORMS, Band 15, Heft 4, S. 242-266
ISSN: 1545-8504
Extreme risk taking by agents has been the subject of intense scrutiny since the 2007 financial crisis. Many have alleged that investing for a firm led to preferences for more risk taking. To test this claim, we submitted a questionnaire to a sample of 715 business school students, testing for investment preferences when investing for self and for a firm over the first four moments of the distribution of returns. We find evidence of standard deviation aversion, skewness seeking, and kurtosis seeking when investing for self. The overall kurtosis seeking of our sample as a whole is mainly driven by standard deviation lovers, skewness seekers, and males. When investing for a firm, we do not see more risk taking but rather a shift toward neutrality of preferences for standard deviation and kurtosis, which is congruent with the risk-as-feelings hypothesis. Our study also underlines the impact of financial expertise in the reduction of risk taking, both when investing for self and for the firm.
Framing the Default Option Right
In: Journal of behavioral decision making, Band 37, Heft 3
ISSN: 1099-0771
ABSTRACTDefaults are powerful nudges to shape individuals' behavior: In three experiments, including a large experiment using representative samples from five European countries (n = 4207), we show that they can significantly affect risk‐taking by medium to large effect sizes. We also show that implementing a default nudge leads to a lower rating of the advice delivered by the wealth manager compared to no default, an effect that has a medium to large effect size. In addition, defaults the targeted individuals refuse result in lower advice ratings. These side effects call for caution before applying nudges and individualized defaults rather than a one‐size‐fits‐all approach. Additionally, we find evidence pointing to two small effects of framing in default presentation. First, asking how much individuals want to invest in the risky asset emphasizes risk. It reduces investment in the risky asset compared to asking them how much they want to leave on the safe account, particularly for more risk‐averse individuals. Second, asking individuals if they want to change a default allocation of 100% in the risky asset leads to more investment in the risky asset than asking them whether they accept such an allocation. Perceived wealth manager honesty appears to mediate the relationship between the default nudge and the rating of the advice.
Risk managers on managing foreign exchange risk
In: Proceedings of the EUROFIDAI-ESSEC Paris December Finance Meeting 2023
SSRN
Polluting for (Higher) Profits: Does an Economic Gain Influence Moral Judgment of Environmental Wrongdoings?
In: ECOLEC-D-22-01582
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SSRN
Working paper
Nudges for responsible finance? A survey of interventions targeted at financial decision making
In: Corporate social responsibility and environmental management, Band 31, Heft 2, S. 1203-1219
ISSN: 1535-3966
AbstractIn a comprehensive review, we investigate how nudges can help financial decisionmakers allocate funds according to ethical considerations to promote sustainable development. We begin by identifying the main nudge frameworks and highlighting their many similarities, including the use of default options, making information more salient, and manipulating the framing of incentives. While nudges have been used in personal finance primarily to promote saving for retirement or avoiding credit card debt, they can also encourage socially responsible investment (SRI). We propose potential nudges in SRI and provide a primer on nudge implementation by reviewing methods for selecting effective nudges and ensuring their ethical acceptability.