Research

We study how pension beneficiaries can gain meaningful influence over sustainable investment decisions and how better-informed preferences can be revealed in real-world financial intermediation. Partnering with a large Dutch pension fund, we combine a three-day citizen assembly with extensive peer deliberation and expert briefings with a binding vote among more than 13,000 members. Deliberation increases self-reported investment knowledge and shifts motivations from deontological, procedure-based reasoning toward a more consequentialist focus on measurable societal impact. Our investor democracy framework provides a new tool for economists to elicit better-informed preferences in the field and contributed to a fund decision to increase impact investments from €300 million to €1.2 billion.

Media Coverage: FD, Financial Times

Most finance experts believe climate risks are not sufficiently reflected in stock prices. We conducted a survey of 1,989 financial professionals through the CFA Institute. It shows that 68% think climate risks are underrepresented. Many expect it will take over ten years for markets to fully integrate these risks. Experts mental models reveal two main factors: poor quality of climate risk data and perceptions that others underestimate climate risks (second-order beliefs).

This paper examines whether the EU’s Sustainable Finance Disclosure Regulation (SFDR) helps investors make more sustainable choices. We find that the current SFDR labels have little effect on fund flows or on how sustainable funds actually are. One reason is that the disclosures add little clear information beyond what investors already infer from fund names and sustainability ratings. In an experiment, we show that more intuitive SFDR disclosures could make the regulation far more effective.

Media Coverage: FD, Vox EU, Harvard Law School Forum, Financial Times

In our study, we looked at why people seem to want so many meetings. We asked participants to complete tasks where they could earn money if they performed well, and gave them the option to pay to communicate with others about the tasks.

What we found is that people weren’t willing to pay more for communication in tasks where talking actually improved performance the most. Instead, they paid more when they felt a task was complex. People tend to want more communication when they’re uncertain, even if it doesn’t really help them do better.

We also saw that people care more about receiving information than influencing others. Altogether, this suggests that the demand for meetings is driven less by their actual usefulness and more by how people psychologically respond to complexity and uncertainty.

We hypothesize that individuals learn about their investment ability based on realized gains and losses rather than overall portfolio performance. Thus, how investors sell their stocks, or how they remember those sales, impacts their confidence. The disposition effect and self-serving memory leads to investor overconfidence. We provide empirical evidence for this in (i) survey data and transaction records of Dutch retail investors and (ii) an experiment for causality. In a final step, we outline a model that formalizes the learning mechanism and how it leads to overconfidence as well as lower trading profits and higher volume.

Imagine you have €100 to give to one of three people who are in need of money. Do you choose the person who you think can make the biggest impact with the money or the one who is struggling through no fault of their own? People have different views on how they should give. Utilitarianism suggests we should aim to maximize societal well-being, but previous research shows many people are less supportive of helping those they believe are responsible for their own bad situation. We analyze giving behavior using the Dutch TV show Geld Maakt Gelukkig ("Money Buys Happiness"). Our findings show that while responsibility matters, perceived impact is the strongest driver of donations.

Giving pledges separate the donation process into two steps: first deciding how much to give, and later choosing the charity. By reducing the complexity of the decision, pledges help donors focus more on the effectiveness of their choice. As a result, donors not only give more frequently but also direct a larger share of their contributions to highly cost-effective charities. This simple adjustment in how donations are made can meaningfully improve the impact of charitable giving.

In both the United States and Europe, we find that financial advisors charge sustainable investors higher fees than conventional investors. Our experiments with 415 financial advisors suggest that this is not due to any additional effort or costs associated with sustainable investing. Instead, we found evidence of price discrimination, with sustainable investors – especially those with lower financial literacy – being charged the highest fees. These findings have important implications for investors and regulators.

Development Finance Institutions (DFIs) manage $23 trillion in assets, yet little research exists on their investment impact. Over the past 30 years, DFIs have increasingly invested in venture capital (VC), participating in one out of six deals. They pursue four main objectives: building VC ecosystems, supporting entrepreneurship, fostering innovation, and promoting sustainability. Our analysis finds that in developing economies, DFIs target industries with positive externalities, support underrepresented fund managers, and improve transparency but rarely back young funds or early-stage deals, with minimal impact on firm growth or innovation. In developed economies, DFIs show little evidence of addressing market failures. Overall, DFIs have significant potential to improve their impact by better aligning investments with mandates and taking greater risks.

How to fundraise for highly effective charities? Our results show that simply labeling a charity as "highly cost-effective" increases donations compared to providing no effectiveness information. Interestingly, showing relative effectiveness ("100x more effective than average charities") boosts donations further. In contrast, sharing absolute metrics ("it costs $5,000 to save a life") reduces giving. This occurs because effectiveness information only motivates donors when it exceeds their prior expectations, and most donors underestimate the differences in cost-effectiveness between top and average charities. Yet, most donors mistakenly believe it costs much less than $5,000 to save a life.

We explored how men and women with type 1 diabetes perceive and manage their condition differently. Over 14 days, we used continuous glucose monitoring (CGM) to compare their actual blood sugar control with their self-ratings. We found that men often think they're managing their diabetes better than they actually are, while women have a more accurate sense of their control. Men also had more unnoticed low blood sugar episodes. Our findings highlight the importance of using CGM to get a true picture of diabetes management and suggest that men and women might need different approaches for better care.

We study the effects of tax deductible donations on the amounts given. We find that tax deductions are effective because they increase the donated amount. Yet, tax deductions are not efficient because the costs for the government are larger than the increase in donation amounts. We also explore matching as an alternative to tax deductions and find that matching is more efficient. Further research into matching vs. tax deductions is therefore needed.

Investors have selective memories of prior outcomes, remembering the good ones and forgetting the bad ones. This negatively affects their future investment decisions.

Using a large European bank dataset, we show that in response to negative ESG news exposing controversial business practices of dividend-paying firms, investors amplify their consumption from dividend income, compared to dividends from non-controversial firms. This increased consumption is immediate, occurring on the dividend payout day. We control for selection effects and rule out attention and adjustments to the dividend payout size as mechanisms. Instead, our results are consistent with laboratory evidence showing that people who earn money by violating social norms counter resulting negative emotions with mood-enhancing behavior, such as increased consumption. This aligns with the principles of emotion regulation theory. We demonstrate the applicability of emotion regulation theory outside of the laboratory in an important real-world context, financial markets.

Wealthy individuals have a disproportionately large influence on the income distribution in society through politics and the corporate world. We show that even in the absence of self-interested motives to oppose redistribution, the wealthy may favor policies that further expand the gap between richer and poorer individuals because of their higher tolerance for inequality. Particularly individuals who experienced upward social mobility accept more inequality than those born into wealth.

Previous work suggested that wealthy individuals behave more unethically than less wealthy individuals. Specifically, drivers of expensive cars would be more likely to violate traffic laws than drivers of cheaper cars. We conducted several large-scale replications and find that drivers of expensive and cheap cars are equally likely to violate traffic laws.

Our research indicates that higher fees for sustainable investments are not due to investors’ social preferences, but rather to their low financial literacy. This finding suggests that investors may not fully understand the impact of these fees on their overall returns, and may benefit from greater education and transparency in the investment industry. Differences in financial literacy across countries explain why investors in Germany and the Netherlands tend to be more fee-sensitive than those in France, Poland, and Spain.

Financial incentives in the form of a lottery increase retirement information search, whereby raffling a few large prizes are more effective than raffling the same amount in the form of many small prizes. However, financial incentives do not improve pension knowledge or savings behavior three weeks after our intervention. Peer information has no effect altogether.

Adolescent girls in Bangladesh and many other places in the world are subject to social and cultural norms regarding menstruation that prohibit partaking in every-day activities. We find the Ritu program has a strong effect on changing self-reported explicit attitudes among parents: parents in the treatment group are more likely to agree that menstruating girls should be able to cook, play with friends, eat white foods and wash clothes. We also find they are more likely to report their own daughter(s) are allowed to undertake these activities during their period. Even while implicit attitudes stay unchanged, ,conscious (explicit) beliefs about the ability and effectiveness of supporting girls during their menstruation and sending girls to school (among other things) clearly adapt in response to the Ritu intervention.

The United Nations Sustainable Development Goals (SDGs) have created societal and political pressure for pension funds to address sustainable investing. We run two field surveys (n=1,669 and n=3,186) with a pension fund that grants its members a real vote on its sustainable-investment policy. Two thirds of participants are willing to expand the fund’s engagement with companies based on selected SDGs, even when they expect engagement to hurt the financial performance. The support remains strong after the fund implemented the choice. A key reason is participants’ strong social preferences.

Girls’ poor ability to manage menstrual health (MH) imposes barriers to education and general wellbeing, especially in low- and middle-income countries. This paper presents the results of the Ritu trial, a 2-year clustered randomized controlled trial, examining the effect of a multi-faceted menstrual health intervention in Bangladesh. We randomized 148 schools from one rural district, into one of the three groups; i) receiving a school program (sanitation facilities, MH education and support); ii) a school program and a targeted household program (parental MH education); iii) or the control group. The primary beneficiaries are schoolgirls in grades 6 until 8, age 11-15. We measure short- to medium-term impacts on school attendance, a set of psychosocial outcomes, and menstrual health outcomes.

SBF (‘Samenwerkende Brancheorganisaties Filantropie’) intends to make proposals to the government and politics to strengthen the fiscal system relevant to philanthropy. To achieve this, it has established a Committee of experts and asked them to provide advice to SBF on this matter. SBF believes that the system can be simplified, expanded, and strengthened by: i) Simpler application of deduction possibilities: fewer conditions for donations and gifts and fewer types of receiving ANBIs and SBBIs (recognized charitable and social-benefit organizations); ii) Broadening the potential use by citizens and businesses.; iii) Improved availability of information for a reliable tax return and for effective control.

More than 1400 papers suggest that sex hormones around birth affect later-life decisions, relying on 2D-4D digit ratios as proxy. We are the first to use neo-natal sex hormones from umbilical cord blood and 2D-4D ratios and find no relation with economic preferences like risk preferences, competitiveness and social preferences. We use a large sample from the Raine study, a well-studied cohort in Western Australia.

How do the very wealthy spend their time, and how does time use relate to well-being? In two studies in the Netherlands, the affluent and the general population spent time in surprisingly similar ways such as by spending the same amount of time working. Yet the nature of their time use differed in critical ways that are related to life satisfaction. In Study 1, millionaires spent more time engaged in active leisure (e.g., exercising and volunteering) (e.g., watching television and relaxing). In Study 2, millionaires spent more time engaged in tasks at work over which they had more control. The affluent sample belongs to the top of the income and wealth distribution, representing a significantly wealthier sample than in previous studies. These results further our understanding of when and how wealth may translate into greater well-being.

Charitable giving is of great value to society. In particular, wealthy individuals and their families have the ability to make a significant impact on society. Many research papers and wealth briefings try to understand the multi-billion dollar global charitable giving market. These studies have provided valuable insights, but often miss the viewpoint of High Net Worth Individuals (HNWIs). Our comparative research provides a unique perspective on wealthy individuals in France and in the Netherlands. It is the first research to use the same methods in two different countries, which allows us to make solid comparisons.

How should individuals spend their money to maximize their life satisfaction? Across the United States, Canada, Denmark and the Netherlands, we find that spending money to buy time increases life satisfaction. Outsourcing tasks such as house cleaning, cooking and doing groceries reduce feelings of stress. Yet, surprisingly, almost half of the Dutch millionaires do not buy time. What can you learn from the happiness of millionaires? Millionaires rate their life satisfaction with an 8.1 compared to 7.5 for the general population. Yet, it is not the money itself that makes them happy, but the way they spend their time. Thirty minutes per day makes the difference. If you spend half an hour more on active leisure (exercising, volunteering, socializing) instead of passive leisure (watching TV), you can be almost as happy as the wealthy.

Social preferences are the most important driver for investors to hold socially responsible mutual funds. Many investors accept lower expected returns on socially responsible investments and are willing to pay higher management fees. Providers of socially responsible investments benefit from a focus on the societal impact of responsible investments rather than focusing too much on financial performance.

This report contains the results of a study on the giving behavior and giving motivations of affluent relationships of ABN AMRO MeesPierson. The study is structured into a quantitative part and a qualitative part. The quantitative part consists of a survey among a random sample from the bank's client base and an experiment conducted with a portion of the surveyed group. The qualitative part involved conversations with relationships to gain insight into their motives and the ways in which they are philanthropically active. In the following, we present the key findings of the study.

We develop an experimental method to estimate individuals’ time and risk preferences tailored to long-term decision making, like pension savings decisions. We directly compare our approach to low stakes incentivized experiments with short horizons, typically used in the literature.

Millionaires are more generous in dictator games than any other group studied in the literature. Yet, millionaires reduce their generosity in a bargaining context (ultimatum game). For fund raisers, it is therefore important to tap into the giving mindset of the wealthy and prevent an exchange focus like: “You give, you get”.

The extent to which investors at socially responsible banks can identify with their socially responsible investments is an important driver for allocations to socially responsible banks. Return expectations and risk preferences also play a role, but are less important. Providers of socially responsible investments can benefit from creating strong social connections with their clients.

This report contains the results of a study on the giving behavior and giving motivations of affluent relationships of ABN AMRO MeesPierson. The study is structured into a quantitative part and a qualitative part. The quantitative part consists of a survey among a random sample from the bank's client base and an experiment conducted with a portion of the surveyed group. The qualitative part involved conversations with relationships to gain insight into their motives and the ways in which they are philanthropically active. In the following, we present the key findings of the study.