Joint research unit 7235

Signaling Trustworthiness with Impact Investments: An Experimental Study

Speaker :Béatrice Boulu-Reshef (CES, Université Paris 1)

Béatrice Boulu-Reshef, Graciela Kuechle, Luise Rohland

Entrepreneurs may differentiate their ventures and attract investments by advertising that their firm produces positive externalities for society. Such signaling of entrepreneurs’ trustworthiness may be a prevalent practice in these investment opportunities which are casually referred to as “impact investment’’ by practitioners. This paper investigates this possible signaling by studying the interplay of altruistic, fiscal, and reputational motives that characterizes these investments in a laboratory experiment. In the experiment, the investor may transfer money to the entrepreneur, who may then invest some, all or none of this money onto a conventional investment opportunity or an impact investment opportunity involving a spillover, and then decide whether or not to transfer some of the funds back. Entrepreneurs choose a type of investment and their choice is visible to the investors. The results are that the choice alone of an impact project does not increase investors’ transfers to impact investments but a higher spillover does as long as the tax from possible gains is not too high. Pro-social entrepreneurs do not announce higher rates of spillovers. In the presence of tax, entrepreneurs internalize that a too high spillover could scare away investors. The experiment shows that the presence of impact investments helps investors coordinate onto different investment types. It identifies the mechanisms behind investors believing that socially-oriented entrepreneurs will be more trustworthy. Specifically, as investors’ transfers react to the effective societal impact and not to the mere project type, making that quantitative information visible allows investors to differentiate between investment opportunities.

AGENDA

Thursday 30 March 2023

Artificial intelligence, labour transformations, and inconspicuous inequalities: women’s work on digital ‘micro-tasking’ platforms

Paola Tubaro (CREST)

Salle : G614B

Artificial intelligence, labour transformations, and inconspicuous inequalities: women’s work on digital ‘micro-tasking’ platforms

Thursday 30 March 2023

Groupe de travail “Intelligence artificielle”

Paola Tubaro (CREST)

Salle : G614B

Artificial intelligence, labour transformations, and inconspicuous inequalities: women’s work on digital ‘micro-tasking’ platforms

Thursday 30 March 2023

Doctorants

Morel Tien

Migration et synchronisation des cycles

Thursday 30 March 2023

Migration et synchronisation des cycles

Morel Tien

Migration et synchronisation des cycles

Monday 3 April 2023

Law, Institutions and Economics in Nanterre (LIEN)

Stefania Marcassa (CY Cergy)

En salle 614 et en distanciel

TBA

Monday 3 April 2023

TBA

Stefania Marcassa (CY Cergy)

En salle 614 et en distanciel

TBA

Tuesday 4 April 2023

Recherche et Economie et Socioéconomie Politique, des Institutions et des Régulations (RESPIR)

Franck Bessis (Triangle et Université Lyon 2)

Une ethnographie de l’expertise économique d’Etat

Tuesday 4 April 2023

Une ethnographie de l’expertise économique d’Etat

Franck Bessis (Triangle et Université Lyon 2)

Une ethnographie de l’expertise économique d’Etat

Inscription aux Newsletters

Newsletter subscription