Beyond preferences: Beliefs in sustainable investing

Valentin Luz, Victor Schauer and Martin Viehweger

Journal of Economic Behavior & Organization, 2024, vol. 220, issue C, 584-607

Abstract: We investigate the effect of investors' pro-sustainable beliefs – the beliefs about other investors' pro-sustainable preferences – on sustainable investing. Using an incentive-compatible coordination game that incorporates important aspects of a stock market, we elicit investors' pro-sustainable beliefs. We find that, first, investors with pro-sustainable beliefs invest in sustainable assets, even when controlling for investors' pro-sustainable preferences. Second, investors with pro-sustainable preferences invest more in assets with positive sustainability performance than in assets with negative sustainability performance, a result we do not obtain for investors with pro-sustainable beliefs. This finding underscores the complementary relation and importance of pro-sustainable preferences and beliefs for sustainable investing.

Keywords: Sustainability; Beliefs; Preferences; Experiment; Coordination game (search for similar items in EconPapers)
JEL-codes: C72 C90 G11 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:220:y:2024:i:c:p:584-607

DOI: 10.1016/j.jebo.2024.02.018

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