ESG Aversion: Experimental Evidence on Perceptions and Preferences

Ye Zhang and Eric Zou

No 34048, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop an experimental framework to identify the belief-based and taste-based drivers of demand for Environmental, Social, and Governance (ESG) partnerships. Our study implements two symmetric experiments with real startup founders and venture capital (VC) investors, who evaluate hypothetical profiles under the understanding that their responses will inform an algorithm generating personalized real-world matches. We find a significant ESG penalty: profiles randomly labeled with ESG attributes receive substantially lower collaboration interest from both founders and VCs. This penalty is primarily driven by negative performance beliefs—ESG-labeled profiles are perceived as less profitable and less accessible. To isolate taste-based preferences, we further implement a willingness-to-pay experiment in which participants may forgo part of a lottery reward to receive additional match recommendations of comparable quality. Participants randomly offered ESG-oriented recommendations are now significantly more likely to pay, revealing a latent preference for ESG once performance concerns are held constant. These findings highlight a tension between financial returns and personal values: in current market conditions, concerns about profitability obscure an underlying taste for ESG.

JEL-codes: C91 C93 G24 L26 M13 Q56 (search for similar items in EconPapers)
Date: 2025-07
New Economics Papers: this item is included in nep-exp
Note: CF EEE PR
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w34048.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:34048

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w34048
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().