Does the willingness to pay for sustainable investments differ between non-incentivized and incentivized choice experiments?

Daniel Engler (), Gunnar Gutsche () and Andreas Ziegler ()
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Daniel Engler: University of Kassel, Institute of Economics
Gunnar Gutsche: Paderborn University, Faculty of Business Administration and Economics; University of Kassel, Institute of Economics
Andreas Ziegler: University of Kassel, Institute of Economics

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: Based on a randomized controlled trial, this paper compares individual investment decisions in pre-registered non-incentivized and incentivized choice experiments to examine hypothetical bias. Using data from a representative sample of over 2,100 individual investors from Germany and France, our econometric analysis reveals that the willingness to pay for sustainable investments is not significantly higher in the non-incentivized setting than in the incentivized setting, which is contrary to predictions from previous studies. The results are robust to various explanations of hypothetical bias and experimental design choices. Individual characteristics tend to have similar estimated effects on the preference for sustainable investments in both experimental settings. The results of our experimental analysis provide insights into the reliability of previous stated choice experiments and guidance for future experiments in (sustainable) finance. Furthermore, our estimation results improve our understanding of individual investment decisions, which is crucial from a policy perspective since individual investors play an important role in financing the transition to a sustainable economy.

Keywords: Sustainable investments; randomized controlled trial; investment choice experiments; hypothetical bias; willingness to pay (search for similar items in EconPapers)
JEL-codes: C25 G11 G41 Q56 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2025
New Economics Papers: this item is included in nep-dcm, nep-env, nep-eur, nep-exp and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:202515

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