Investor Valuation for Socially Responsible Assets: A Willingness to Pay Experiment
Guenster, Nadja; Brodback, Daniel; Pouget, Sebastien; Wang, Ruichen
Abstract
We present an experimental study of investors’ willingness to pay for socially responsible assets. In our initial public offering experiment, various assets share identical financial risk-return profiles but differ in the intensity and timing of societal benefits, represented by charitable donations. We find that subjects value societal benefits positively and prefer a positive correlation between financial returns and these societal benefits. We offer implications for the design of corporate social responsibility policies and for the pricing of responsible assets.
Keywords
Socially Responsible Investing; Investment Decisions; ESG Preferences;
Experimental Finance