Deontological and Utilitarian Responses to Sacrificial Dilemmas Predict Disapproval of Sin Stocks

Niszczota, Paweł; Białek, Michał; Conway, Paul

doi:10.1027/1864-9335/a000474

Cited by 6 publications

(4 citation statements)

References 42 publications

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“…Alternative approaches could be used, such as focusing on the industry in which the company operates in (e.g., gambling). However, past work suggests that alternative operationalizations of 'sin' produce similar findings as the current manipulations (Niszczota et al, 2022). We cannot rule out that the lack of direct support for the ethical commitment hypothesis -postulating that investment in sin stocks backfires for ethical fund managers -is due to a different operationalization of saintliness.…”

Section: Discussionmentioning

confidence: 53%

Saintly fund managers cannot earn a license to make sinful investments

Niszczota,

Conway

2023

Preprint

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Can investment fund managers earn a license to invest unethically? Past moral behavior can provide a perceived license to behave less morally, yet people may expect ethical consistency. In four experiments (N = 2,677), we examined whether people license ethical fund managers to engage in ethically questionable ‘sin stocks’—or whether people view ethical fund managers making ethically questionable investments as hypocritical. We investigated both same-domain (past ethical investment) and cross-domain (distinguished military service) evidence for the fund manager’s moral character and earning via both traditional investing and ‘shorting’ sin stocks. We found no evidence of a moral license for ethical investors to earn money off sin stocks (even by shorting them). In contrast, people rated ethical fund managers as less permitted to invest in such stocks, consistent with expectations of ethical commitment—a finding partially mediated by perceived hypocrisy. Hence, people expect ethical fund managers to maintain high ethical investment standards.

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Section: Discussionmentioning

confidence: 53%

Saintly fund managers cannot earn a license to make sinful investments

Niszczota,

Conway

2023

Preprint

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“…Spółkę można także uznać za grzeszną, jeśli zaprzestaje ona wcześniejszych społecznie odpowiedzialnych działań (między innymi Niszczota i in., 2022). Do tego można wykorzystać na przykład zmianę w ocenie agencji ratingowych albo całościowo (na przykład obniżkę z oceny AA na BB), albo tylko w wybranych wymiarach (na przykład traktowanie pracowników).…”

Section: Alternatywne Ujęciaunclassified

Grzeszne spółki: synteza 15 lat badań teoretycznych i empirycznych

Niszczota

2023

Ekonomia I Inne Nauki Społeczne. Studia Interdyscyplinarne

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Sin stocks: A synthesis of 15 years of theoretical and empirical studies. In the narrowest sense, sin stocks are shares in companies engaged in the production of alcohol, tobacco, or gambling. Starting with the article by Hong and Kacperczyk (2009), they have been attracting an increasing interest from researchers. In this article, I attempt to synthesize recent theoretical and empirical work on morally controversial companies, by presenting (1) differences in the way sin stocks are defined, (2) work on estimating the sin stock premium, (3) determinants of propensity to invest in sin stocks, and (4) studies analysing selected cases in which sinful investments can be perceived differently. These could include (a) delegating investment decisions to fund managers who have behaved nobly in the past, (b) delegating decisions to algorithms, and (c) short-selling sin stocks. Additionally, I present several potential directions for researchers interested in sin stocks.

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“…To understand the effects of errors suggested by decision support systems we focus on the analysis of a set of "activist" investment funds that conduct negative activism (Molk and Partnoy, 2022). These are known to target companies that they deem fraudulent or exploitative (Jiang et al, 2022), which in a broader sense could be considered "sin stocks" (Hong and Kacperczyk, 2009;Niszczota et al, 2022). If an activist fund can convince other market participants that such a company is guilty, the stock price of the company should substantially decrease.…”

Section: Present Studymentioning

confidence: 99%

Will the use of machines to identify negative activist investments backfire? Experimental evidence

Niszczota¹,

Kaszás²

2022

Preprint

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Current research does not resolve how people will judge harmful activist investments if machines (machine learning algorithms) are involved in the investment process as advisors, and not the ones “pulling the trigger”. On the one hand, machines might diffuse responsibility for making a socially responsible, but harmful investment. On the other hand, machines could exacerbate the blame that is assigned to the investment fund, which can be penalized for outsourcing part of the decision process to an algorithm. We attempted to resolve this issue experimentally. In our experiment (N = 956), participants judge either a human research team or a machine learning algorithm as the source of advice to the investment team to short-sell a company that they suspect of committing financial fraud. Results suggest that investment funds will be similarly blameworthy for an error regardless of using human or machine intelligence to support their decision to short-sell a company. This finding highlights a novel and relevant circumstance in which reliance on algorithms does not backfire by making the final decision-maker (e.g., an investment fund) more blameworthy. Nor does it lessen the perceived blameworthiness of the final decision-maker, by making algorithms into “electronic scapegoats” for providing well-intended but harmful advice.

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Deontological and Utilitarian Responses to Sacrificial Dilemmas Predict Disapproval of Sin Stocks

Cited by 6 publications

References 42 publications

Saintly fund managers cannot earn a license to make sinful investments

Saintly fund managers cannot earn a license to make sinful investments

Grzeszne spółki: synteza 15 lat badań teoretycznych i empirycznych

Will the use of machines to identify negative activist investments backfire? Experimental evidence

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