Research


Research Interests

  • Philanthropy
  • Sustainable Finance
  • Millionaires
  • Behavioral Finance
  • Experimental Economics
  • Happiness

Sustainable Finance

An unprecedented number of investors are giving their financial advisors a mandate for socially responsible investing (SRI). Yet, we find that advisors charge a premium to SRI clients that cannot be justified by higher effort, skill, or costs. This suggests that advisors exploit the SRI preferences of their clients (who accept these higher fees).

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.
- Pre-registration at OSF: https://osf.io/pz7rn/
Yale-RFS Conference on Real and Private-Value Assets​
- Watch paper's video

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.
Covered by Harvard Law School Forum

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.

Millionaires

Wealthy individuals have a disproportionately large influence on the income distribution in society through politics and the corporate world. We show that wealthy Americans are less supportive of redistribution than the general population. This gap in attitudes is explained by differences in distributional preferences. Particularly individuals who experienced upward social mobility accept more inequality than those born into wealth. Our findings raise the possibility that wealthy individuals contribute to the persistent income inequality in the U.S. 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". 
  • "Buying Time Promotes Happiness", Proceedings of the National Academy of Sciences (with Ashley Whillans, Elizabeth Dunn, Rene Bekkers and Michael Norton) 
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 (excercising, volunteering, socializing) instead of passive leisure (watching TV), you can be almost as happy as the wealthy.
- ​Pre-registration at the OSF: https://osf.io/vndmt/
  • The Joy of Giving: Evidence From a Matching Experiment With Millionaires and the General Population" (with Rene Bekkers, Ashley Whillans and Michael Norton). AEA 2019, Atlanta
- Pre-registration at OSF: https://osf.io/x69ds/register/565fb3678c5e4a66b5582f67​
  • Are Socio-economic Status and Prosocial/Ethical Behavior Related? Three Replications of Piff et al.’s (2012) Field Studies (with Minah Jung, Joachim Vosgerau and Jan Stoop). Revise and Resubmit of the Pre-registered Replication Report at The Journal of Experimental Psychology: General

Financial Decision Making

  • "Investor Memory" (with Katrin Godker and Peiran Jiao), AFA 2020 San Diego
Investors have selective memories of prior outcomes, remembering the good ones and forgetting the bad ones. This negatively affects their future investment decisions. 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. 
- Pre-registration at the AEA RCT Registry: https://www.socialscienceregistry.org/trials/987​ 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 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. 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. ​
 

Charity Effectiveness

- Pre-registration at OSF: https://osf.io/ynfr4/​ Pre-registration at OSF: https://osf.io/w93df/


Philanthropy Reports

Joint projects with financial institutions

Robeco abn amro tridos bank asn bank deutsche bank loyalis

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