A comparison of models describing the impact of moral decision making on investment decisions

  • Hofmann E
  • Hoelzl E
  • Kirchler E
  • 61

    Readers

    Mendeley users who have this article in their library.
  • 26

    Citations

    Citations of this article.

Abstract

As moral decision making in financial markets incorporates moral considerations into investment decisions, some rational decision theorists argue that moral considerations would introduce inefficiency to investment decisions. However, market demand for socially responsible investment is increasing, suggesting that investment decisions are influenced by both financial and moral considerations. Several models can be applied to explain moral behavior. We test the suitability of (a) multiple attribute utility theory (MAUT), (b) theory of planned behavior, and (c) issue-contingent model of ethical decision making in organizations. In an experimental setting, 141 participants traded company shares in a computerized asset market. Over 12 periods, companies varied in morality (i.e., treatment of employees) and in profitability (i.e., expected dividends per share). Participants' bids and asks for shares were recorded. Results indicate that moral considerations influence investment decisions, controlling for profit. Differences between the three models are discussed. (PsycINFO Database Record (c) 2008 APA, all rights reserved)

Author-supplied keywords

  • Behavioral economics
  • Decision theory
  • Ethics

Get free article suggestions today

Mendeley saves you time finding and organizing research

Sign up here
Already have an account ?Sign in

Find this document

Get full text

Authors

Cite this document

Choose a citation style from the tabs below

Save time finding and organizing research with Mendeley

Sign up for free