Abstract

In a framed field experiment with clients of a German universal bank, we explore the impact of peer information on sustainable retail investments. Our results show that information about peers’ inclination towards sustainable investing raises allocations to stock funds labeled sustainable, when communicated during a buying decision. This increase is primarily driven by participants initially underestimating peers’ propensity to invest sustainably. Our study design allows us to separate between different channels of social influence. Both social learning (investors assuming that others have formed beliefs based on relevant private information and updating their own beliefs based on this information) and social utility (investors deriving utility from behaving in line with a social norm or disutility from not acting in line with a social norm) drive our results. Treated individuals further express heightened interest in additional information on sustainable investments, primarily on risk and return expectations. However, when analyzing account-level portfolio holding data over time, we detect no spillover effects of peer information on later sustainable investment decisions

Practical information