Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324203 
Year of Publication: 
2025
Series/Report no.: 
MAGKS Joint Discussion Paper Series in Economics No. 15-2025
Publisher: 
Philipps-University Marburg, School of Business and Economics, Marburg
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.
Subjects: 
Sustainable investments
randomized controlled trial
investment choice experiments
hypothetical bias
willingness to pay
JEL: 
C25
G11
G41
Q56
Document Type: 
Working Paper

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