How Much Do Investors Care about Social Responsibility?

Perhaps the most important corporate law debate over the last several years concerns whether directors and executives should manage the corporation to maximize value for investors or also take into account the interests of other stakeholders and society. But, do investors themselves wish to maximize returns, or are they willing to forgo returns for social purposes? And more broadly, do market participants, such as investors and consumers, differ from donors in the ways in which they prioritize monetary gains and the promotion of social goals? This project attempts to answer these questions with evidence from an experiment conducted with 279 participants that involved real monetary gains for participants. Our empirical analysis provides four main results: First, investors are generally willing to forgo some monetary gains to promote social interests. Second, individuals are willing to forgo greater amounts when consuming and making donations than when investing. Third, whereas most investors are willing to forgo gains to promote social interests, a significant percentage of investors (thirty-two percent in our study) have a strong preference for maximizing monetary gains and are unwilling to forgo even very small amounts to advance any social goals. Fourth, there is significant heterogeneity in individuals\u27 willingness to forgo in each of the three channels (investment, consumption, and donation), which is related to their political affiliation, gender, and income. Our evidence suggests that Democrats, women, and higher-income participants tend to forgo more frequently and in greater amounts compared to Republicans, men, and lower income participants, though these relationships vary with the cause in question. These findings have important implications for the current debate regarding corporate social responsibility and for the actions of corporate executives and investment managers

biased reputations

this is a complementary lab experiment to our biased reputation Airbnb and Homeaway project. The purpose of the experiment is to test whether people evaluate the performance of Black hosts as worse than the performance of white hosts (the actual performance is held constant by design). We also wish to test whether biases interact with the actual performance of hosts

How Much Do Investors Care about Social Responsibility?

Perhaps the most important corporate law debate over the last several years concerns whether directors and executives should manage the corporation to maximize value for investors or also take into account the interests of other stakeholders and society. But, do investors themselves wish to maximize returns, or are they willing to forgo returns for social purposes? And more broadly, do market participants, such as investors and consumers, differ from donors in the ways in which they prioritize monetary gains and the promotion of social goals? This project attempts to answer these questions with evidence from an experiment conducted with 279 participants that involved real monetary gains for participants. Our empirical analysis provides four main results: First, investors are generally willing to forgo some monetary gains to promote social interests. Second, individuals are willing to forgo greater amounts when consuming and making donations than when investing. Third, whereas most investors are willing to forgo gains to promote social interests, a significant percentage of investors (thirty-two percent in our study) have a strong preference for maximizing monetary gains and are unwilling to forgo even very small amounts to advance any social goals. Fourth, there is significant heterogeneity in individuals\u27 willingness to forgo in each of the three channels (investment, consumption, and donation), which is related to their political affiliation, gender, and income. Our evidence suggests that Democrats, women, and higher-income participants tend to forgo more frequently and in greater amounts compared to Republicans, men, and lower income participants, though these relationships vary with the cause in question. These findings have important implications for the current debate regarding corporate social responsibility and for the actions of corporate executives and investment managers

Those who tan and those who don't: A natural experiment on colorism.

Are darker-skinned workers discriminated against in the labor market? Studies using survey data have shown that darker skin tone is associated with increased labor market disadvantages. However, it is hard to refute the possibility that other factors correlated with skin tones might affect employment outcomes. To overcome this inherent limitation, we use a natural experiment: we utilize changes in one's own skin tone, generated by exposure to the sun, to explore the effect of skin tone on the tendency to be employed. We find that those people whose skin tone becomes darker by exposure to the sun (but not others) are less likely to be employed when the UV radiation in the previous three weeks in the area in which they reside is greater. These within-person findings hold even when controlling for the week, the year, the region, demographic characteristics and the occupation and industry one is employed in