Portfolio instability and socially responsible investment: Experiments with financial professionals and students
Metadatas
2023
- handle: 10670/1.ryd31v
- hal: hal-04168199
- doi: 10.1016/j.jedc.2023.104702
This document is linked to :
info:eu-repo/semantics/altIdentifier/doi/10.1016/j.jedc.2023.104702
Keywords
Behavioral finance Experimental economics Financial asset markets Portfolio instability Socially responsible investment C - Mathematical and Quantitative Methods/C.C9 - Design of Experiments G - Financial Economics/G.G1 - General Financial Markets/G.G1.G11 - Portfolio Choice • Investment Decisions G - Financial EconomicsSimilar subjects
Therapy School life Students--Education Pupils Student life and customs Scrip Investment securities Securities law Capitalization (Finance) Blue sky laws Securities--Law and legislation Portfolio Underwriting Professionals Investing Investment management Portfolio Funds Funding Finance, commerce, confiscations, etcCite this document
Olga Tatarnikova et al., « Portfolio instability and socially responsible investment: Experiments with financial professionals and students », HALSHS : archive ouverte en Sciences de l’Homme et de la Société, ID : 10.1016/j.jedc.2023.104702
Metrics
Share / Export
Abstract
fficiency of SRI portfolios is commonly assessed based on an inconclusive risk-return ratio. We propose to approach the efficiency of portfolios with the notion of instability. Unstable portfolios are characterized by higher transaction costs and human resources costs that justify search for more stable portfolios. We examine the instability of SRI portfolios from the perspective of behavioral finance. Based on data from incentivized experiments with 153 financial professionals and 233 students, we compare a baseline treatment to a ranking treatment in which participants received feedback regarding their average investment in SRI assets. We found that SRI portfolios had significantly lower instability: portfolios with a majority of SRI shares exhibited less instability in both treatments compared to conventional portfolios. Moreover, in the ranking treatment subjects invested more in SRI assets than in the baseline. In addition, the experiment revealed the convergence of professionals’ and students’ behavioral patterns.