Investor Valuation for Socially Responsible Assets: A Willingness to Pay Experiment

Guenster, Nadja; Brodback, Daniel; Pouget, Sebastien; Wang, Ruichen

Abstract

We present an experimental study of investors’ willingness to pay for socially responsible assets. In our initial public offering experiment, various assets share identical financial risk-return profiles but differ in the intensity and timing of societal benefits, represented by charitable donations. We find that subjects value societal benefits positively and prefer a positive correlation between financial returns and these societal benefits. We offer implications for the design of corporate social responsibility policies and for the pricing of responsible assets.