Mitigating climate change with financial investments: exploring sustainable investment strategies in a novel experimental investment paradigm
Sustainable financial investments play a role in mitigating climate change. With this research, we explored how decision-makers use three investment strategies illustrating different primary motives: (1) money maximization (economic self-interest), (2) exclusion (not personally harming the environme...
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| Format: | Article |
| Language: | English |
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Cambridge University Press
2025-01-01
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| Series: | Judgment and Decision Making |
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| Online Access: | https://www.cambridge.org/core/product/identifier/S1930297524000354/type/journal_article |
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| author | Hulda Karlsson-Larsson Arvid Erlandsson Joakim Sandberg Daniel Västfjäll |
| author_facet | Hulda Karlsson-Larsson Arvid Erlandsson Joakim Sandberg Daniel Västfjäll |
| author_sort | Hulda Karlsson-Larsson |
| collection | DOAJ |
| description | Sustainable financial investments play a role in mitigating climate change. With this research, we explored how decision-makers use three investment strategies illustrating different primary motives: (1) money maximization (economic self-interest), (2) exclusion (not personally harming the environment), and (3) inclusion (helping the environment most efficiently). The relative use of these strategies was tested within a novel investment paradigm, aiming to artificially create a trade-off between financial payoffs (money maximization), environmental purity (exclusion), and environmental impact (inclusion). We recruited 1422 participants online and let them make ten consecutive investment choices, with incentivized outcomes, both monetary (i.e., potential bonus payment) and environmental (i.e., number of trees planted). We tested the change in investment choices using a between-subject design with four conditions, a control, and one default condition for each investment strategy. The three strategies were chosen about equally often in the control condition, but we find that this investment pattern could be altered by a default intervention. Preliminary evidence suggests that participants primarily using the exclusion and inclusion strategies differ in their moral reasoning. Utilitarianism better predicted the inclusion strategy, whereas high self-importance of moral identity better predicted the exclusion strategy. |
| format | Article |
| id | doaj-art-91819bc97e4c4a679400310eea059a55 |
| institution | Kabale University |
| issn | 1930-2975 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | Cambridge University Press |
| record_format | Article |
| series | Judgment and Decision Making |
| spelling | doaj-art-91819bc97e4c4a679400310eea059a552025-01-20T10:03:53ZengCambridge University PressJudgment and Decision Making1930-29752025-01-012010.1017/jdm.2024.35Mitigating climate change with financial investments: exploring sustainable investment strategies in a novel experimental investment paradigmHulda Karlsson-Larsson0https://orcid.org/0000-0001-6890-3298Arvid Erlandsson1https://orcid.org/0000-0001-7875-269XJoakim Sandberg2Daniel Västfjäll3Department of Behavioural Sciences and Learning (IBL), Linköping University, Linköping, SwedenDepartment of Behavioural Sciences and Learning (IBL), Linköping University, Linköping, SwedenDepartment of Philosophy, Linguistics and Theory of Science, Göteborgs Universitet, Göteborg, SwedenDepartment of behavioural sciences and learning, JEDI-lab, Linköping University and Decision Research Eugene, OregonSustainable financial investments play a role in mitigating climate change. With this research, we explored how decision-makers use three investment strategies illustrating different primary motives: (1) money maximization (economic self-interest), (2) exclusion (not personally harming the environment), and (3) inclusion (helping the environment most efficiently). The relative use of these strategies was tested within a novel investment paradigm, aiming to artificially create a trade-off between financial payoffs (money maximization), environmental purity (exclusion), and environmental impact (inclusion). We recruited 1422 participants online and let them make ten consecutive investment choices, with incentivized outcomes, both monetary (i.e., potential bonus payment) and environmental (i.e., number of trees planted). We tested the change in investment choices using a between-subject design with four conditions, a control, and one default condition for each investment strategy. The three strategies were chosen about equally often in the control condition, but we find that this investment pattern could be altered by a default intervention. Preliminary evidence suggests that participants primarily using the exclusion and inclusion strategies differ in their moral reasoning. Utilitarianism better predicted the inclusion strategy, whereas high self-importance of moral identity better predicted the exclusion strategy.https://www.cambridge.org/core/product/identifier/S1930297524000354/type/journal_articlepro-environmental investmentssustainable investmentsdefaultnudgeclimate change mitigationeconomic games |
| spellingShingle | Hulda Karlsson-Larsson Arvid Erlandsson Joakim Sandberg Daniel Västfjäll Mitigating climate change with financial investments: exploring sustainable investment strategies in a novel experimental investment paradigm Judgment and Decision Making pro-environmental investments sustainable investments default nudge climate change mitigation economic games |
| title | Mitigating climate change with financial investments: exploring sustainable investment strategies in a novel experimental investment paradigm |
| title_full | Mitigating climate change with financial investments: exploring sustainable investment strategies in a novel experimental investment paradigm |
| title_fullStr | Mitigating climate change with financial investments: exploring sustainable investment strategies in a novel experimental investment paradigm |
| title_full_unstemmed | Mitigating climate change with financial investments: exploring sustainable investment strategies in a novel experimental investment paradigm |
| title_short | Mitigating climate change with financial investments: exploring sustainable investment strategies in a novel experimental investment paradigm |
| title_sort | mitigating climate change with financial investments exploring sustainable investment strategies in a novel experimental investment paradigm |
| topic | pro-environmental investments sustainable investments default nudge climate change mitigation economic games |
| url | https://www.cambridge.org/core/product/identifier/S1930297524000354/type/journal_article |
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