Moral decay in investment
Moral decay in investment
How strongly do higher investment premiums tempt people to invest in unethical assets, such as harmful ‘sin stocks’? We present two experimental studies (Ntotal = 1260) examining baseline willingness to invest in ‘sin stocks’ (without a premium), changes in investments as premiums increase, and how individual differences in deontological and utilitarian inclinations and dark personality traits impact baseline and changes to investments. We compare results to hypothetical models of sensitivity to higher returns: a) full resilience (to moral decay), where people increase investment in regular but not sin stocks with increasing premiums, b) partial resilience, where increasing premiums increases investment more slowly for sin than regular stocks, c) sin deduction: a flat baseline penalty for sin versus regular stocks resulting in similar sensitivity to increasing premiums, and d) decay, where investment differences in sin versus regular stocks reduce as premiums increase. On average, responses aligned best with the partial resilience model. Individual differences in morally-relevant traits moderated effects: most notably, people with higher deontological inclinations and lower dark traits showed greater resilience. However, 21–33% of participants exhibited full resilience, refusing to invest more in sin stocks even as premiums increased, which was more common in people with higher deontological inclinations and lower dark traits. These findings suggest that decisions to invest in sin stocks reflect the sensitivity to the sinfulness of the stock, which remains strong even after unethical investments are made more attractive. We conclude that increasing the economic reward of unethical investments does not crowd out moral concerns.
Controversial investments, Dark triad, Deontology, Judgment and decision making, Moral dilemmas, Moral psychology, Psychopathy, Sin stocks, Utilitarianism
Niszczota, Paweł
245606ca-f904-42f1-b6df-404d86f0f52a
Conway, Paul
765aaaf9-173f-44cf-be9a-c8ffbb51e286
Białek, Michał
b31a61d7-04e8-4e45-9c71-767e83c839cd
6 August 2024
Niszczota, Paweł
245606ca-f904-42f1-b6df-404d86f0f52a
Conway, Paul
765aaaf9-173f-44cf-be9a-c8ffbb51e286
Białek, Michał
b31a61d7-04e8-4e45-9c71-767e83c839cd
Niszczota, Paweł, Conway, Paul and Białek, Michał
(2024)
Moral decay in investment.
Journal of Experimental Social Psychology, 115, [104664].
(doi:10.1016/j.jesp.2024.104664).
Abstract
How strongly do higher investment premiums tempt people to invest in unethical assets, such as harmful ‘sin stocks’? We present two experimental studies (Ntotal = 1260) examining baseline willingness to invest in ‘sin stocks’ (without a premium), changes in investments as premiums increase, and how individual differences in deontological and utilitarian inclinations and dark personality traits impact baseline and changes to investments. We compare results to hypothetical models of sensitivity to higher returns: a) full resilience (to moral decay), where people increase investment in regular but not sin stocks with increasing premiums, b) partial resilience, where increasing premiums increases investment more slowly for sin than regular stocks, c) sin deduction: a flat baseline penalty for sin versus regular stocks resulting in similar sensitivity to increasing premiums, and d) decay, where investment differences in sin versus regular stocks reduce as premiums increase. On average, responses aligned best with the partial resilience model. Individual differences in morally-relevant traits moderated effects: most notably, people with higher deontological inclinations and lower dark traits showed greater resilience. However, 21–33% of participants exhibited full resilience, refusing to invest more in sin stocks even as premiums increased, which was more common in people with higher deontological inclinations and lower dark traits. These findings suggest that decisions to invest in sin stocks reflect the sensitivity to the sinfulness of the stock, which remains strong even after unethical investments are made more attractive. We conclude that increasing the economic reward of unethical investments does not crowd out moral concerns.
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Niszczota_Conway_Bialek_2024_Moral_Decay_in_Investment_JESP
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Niszczota, Conway, & Bialek, 2024, Moral Decay in Investment, JESP
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Accepted/In Press date: 25 July 2024
e-pub ahead of print date: 6 August 2024
Published date: 6 August 2024
Keywords:
Controversial investments, Dark triad, Deontology, Judgment and decision making, Moral dilemmas, Moral psychology, Psychopathy, Sin stocks, Utilitarianism
Identifiers
Local EPrints ID: 493510
URI: http://eprints.soton.ac.uk/id/eprint/493510
ISSN: 0022-1031
PURE UUID: 5e02bfc5-b03e-4824-b585-2e86ce150bc1
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Date deposited: 04 Sep 2024 16:43
Last modified: 05 Sep 2024 02:03
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Contributors
Author:
Paweł Niszczota
Author:
Paul Conway
Author:
Michał Białek
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