16 research outputs found
Immorally obtained principal increases investors’ risk preference
No full text<div><p>Capital derived from immoral sources is increasingly circulated in today’s financial markets. The moral associations of capital are important, although their impact on investment remains unknown. This research aims to explore the influence of principal source morality on investors’ risk preferences. Three studies were conducted in this regard. Study 1 finds that investors are more risk-seeking when their principal is earned immorally (through lying), whereas their risk preferences do not change when they invest money earned from neutral sources after engaging in immoral behavior. Study 2 reveals that guilt fully mediates the relationship between principal source morality and investors’ risk preferences. Studies 3a and 3b introduce a new immoral principal source and a new manipulation method to improve external validity. Guilt is shown to the decrease the subjective value of morally flawed principal, leading to higher risk preference. The findings show the influence of morality-related features of principal on people’s investment behavior and further support mental account theory. The results also predict the potential threats of “grey principal” to market stability.</p></div
Interaction of morality of description and principal’s relevance to description on investment choice.
No full text<p>Interaction of morality of description and principal’s relevance to description on investment choice.</p
Schematic diagram of two-step mediation effect in study 3.
No full text<p>Schematic diagram of two-step mediation effect in study 3.</p
Estimated numbers of objects principal can buy.
No full text<p>Estimated numbers of objects principal can buy.</p
