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Research

Dirty Money. The Impact of Negative ESG News Sentiment on Dividend Consumption

2023, with Marten Laudi and Thomas Pauls

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.
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Wealthy Americans and redistribution: The role of fairness preferences

2023, with Alain Cohn, Lasse Jessen and Marko Klasjna

The Journal of Public Economics

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.
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Social Status and Unethical Behavior: Two Replications of the Field Studies in Piff et al. (2012)

2023, with Minah Jung, Joachim Vosgerau and Jan Stoop

Journal of Experimental Psychology

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.
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Why Do Investors Pay Higher Fees for Sustainable Investments? An Experiment in Five European Countries

2023, with Daniel Engler and Gunnar Gutsche

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.
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Disposed to be Overconfident

2023, with Katrin Gödker and Terrance Odean

Many investors tend to hold on to losing stocks for too long while selling winners too quickly. This behavior, known as the disposition effect, has been the subject of study in the context of a large and recent sample of Dutch retail investors. The results of our research suggest that investors tend to become overconfident after selling stocks at a profit. Specifically, we found that investors learn about their abilities based on their successful sales, which can lead to overconfidence. Our findings are consistent with a model that explains this behavior, and we also demonstrate the causal effect of this phenomenon in an experiment.
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A Fistful of Dollars: Financial Incentives, Peer Information, and Retirment Savings

2022, with Rob Bauer and Inka Eberhardt

The Review of Financial Studies

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.
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Meet the Parents: Impact of a Menstrual Health Intervention on Parental Implicit and Explicit Attitudes Towards Menstrual Taboos in Rural Bangladesh

2021, with Eleonora Nilessen and Lidwien Sol

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.
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Do Financial Advisors Charge Sustainable Investors a Premium?

2021, with Marten Laudi and Utz Weitzel

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.
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Get real! Individuals Prefer More Sustainable Investments

2021, with Rob Bauer and Tobias Ruof

The Review of Financial Studies

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.
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Breaking Down Menstrual Barriers in Bangladesh; Cluster RCT Evidence on School Attendance and Psychosocial Outcomes of Adolescent Girls

2021, with Ashley Whillans, Rene Bekkers and Michael Norton

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.
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Beter Geven - Dertien verbetervoorstellen voor vereenvoudiging en versterking van de giftenaftrek en de ANBI regels

2020, in collaboration with Samenwerkende Brancheorganisaties Filantropie (SBF)

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.
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Do Sex Hormones at Birth Predict Later-life Economic Preferences? Evidence from a Pregnancy Birth Cohort Study

2020, with Boris van Leeuwen, Jeanne Bovet, Gideon Nave, Jonathan Stieglitz and Andrew Whitehouse

The Proceedings of the Royal Society B

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.
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Time Use and Happiness of Millionaires: Evidence from the Netherlands

2020, with Ashley Whillans, Rene Bekkers and Michael Norton

Social Psychological and Personality Science

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.
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Investor Memory

2019, with Katrin Gödker and Peiran Jiao

Revise and Resubmit at The Review of Financial Studies

Investors have selective memories of prior outcomes, remembering the good ones and forgetting the bad ones. This negatively affects their future investment decisions.
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High Net Worth Individuals Philanthropy Trends: A Comparative Study of France and the Netherlands

2017, in collaboration with ABN AMRO MeesPierson

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.
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Buying Time Promotes Happiness

2017, with Ashley Whillans, Elizabeth Dunn, Rene Bekkers and Michael Norton

Proceedings of the National Academy of Sciences

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.
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Why Do Investors Hold Socially Responsible Mutual Funds?

2017, with Arno Riedl

The Journal of Finance

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.
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De Geefondernemer

2016, in collaboration with ABN AMRO MeesPierson

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.
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Towards a Practical and Scientifically Sound Tool for Measuring Time and Risk Preferences in Pension Savings Decisions

2016, with Jan Potters and Arno Riedl

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.
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Giving Behavior of Millionaires

2015, with Rob Bauer and Uri Gneezy

Proceedings of the National Academy of Sciences

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”.
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Social Identification and Investment Decisions

2015, with Rob Bauer

Journal of Economic Behavior and Organization

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.
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Van Vermogen Naar Verandering

2014, in collaboration with ABN AMRO MeesPierson

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.
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