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Defaulting Investors Toward Sustainability: A Field Experiment

Author

Listed:
  • Lars Hornuf
  • Christoph Merkle
  • Stefan Zeisberger

Abstract

We provide the first field experimental evidence on how default options influence sustainable investment choices. Using a real-world investment setting that avoids experimenter demand effects and enables realistic estimates of effect sizes, we find that setting a sustainable investment as the default increases adoption from 23% to 36% relative to a conventional default. The effect is stable over time, consistent across investor subgroups, and persists in the long run. A follow-up survey shows that both sustainable and conventional investors expect their chosen portfolios to outperform, yet few are willing to sacrifice meaningful returns for sustainability. Overall, while sustainability preferences matter, investors' decisions remain primarily driven by financial return considerations under realistic market conditions.

Suggested Citation

  • Lars Hornuf & Christoph Merkle & Stefan Zeisberger, 2026. "Defaulting Investors Toward Sustainability: A Field Experiment," CESifo Working Paper Series 12733, CESifo.
    • Handle: RePEc:ces:ceswps:_12733
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    Keywords

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    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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