CSR, rationality and the ethical preferences of investors in a laboratory experiment

Costanza Consolandi, Alessandro Innocenti () and Alessandro Vercelli ()

Department of Economic Policy, Finance and Development (DEPFID) University of Siena from Department of Economic Policy, Finance and Development (DEPFID), University of Siena

Abstract: This experimental study aims to clarify to what extent and in which direction investors react to CSR (Corporate Social Responsibility) initiatives meant to upgrade the ethical standards of firms beyond the minimal requirements of law. Subjects in the laboratory were invited to invest their endowment in a portfolio of financial assets. We provided information on the expected returns of each stock and on its inclusion in an ethical index, or exclusion from it. Our findings show that subjects’ behavior appears to be a function not only of their individual pay-offs but also of the information on the ethical standards of the firms issuing stocks. Most of them, however, did not show a fully irrational behavior as they consistently correlated the share of stocks with their expected returns. We may conclude that the sizeable reaction of our sample’s investors to the inclusion of a stock in the ethical index, or its exclusion from it, is the fruit of a deliberate choice.

Keywords: ethical stock indexes; Corporate Social Responsibility; investors; experiment. (search for similar items in EconPapers)
JEL-codes: G30 M14 Q56 (search for similar items in EconPapers)
Date: 2009-08
New Economics Papers: this item is included in nep-cbe, nep-cfn and nep-exp
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Citations: View citations in EconPapers (4)

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Journal Article: CSR, rationality and the ethical preferences of investors in a laboratory experiment (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:usi:depfid:0609

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