Authors: Marten Laudi (University of Bremen), Paul Smeets (University of Amsterdam) and Utz Weitzel (Vrije Universiteit Amsterdam/ Tinbergen Institute Radboud University)
Despite growing concerns from regulators about potential price discrimination against sustainable investors, empirical evidence is lacking. To address this gap, we conduct two lab-in-the-field experiments with 415 professional financial advisors from the US and Europe. Our results show that these advisors impose a premium on sustainable investors compared to conventional investors. This premium persists even when differences in effort, skill, and costs, as well as higher gains from trade are ruled out. Notably, advisors charge the highest fees to sustainable investors with low financial literacy, while sustainable investors with high financial literacy pay no premium at all. These results are consistent with price discrimination.
Authors: Quyen Nguyen (University of Otago), Ivan Diaz-Rainey (Griffith University), Adam Kitto (University of New South Wales), Nicholas Pittman (EMMI), Renzhu Zhang (University of Otago)
