This paper compares individual sustainable investment decisions in pre-registered non-incentivized and incentivized choice experiments to examine hypothetical bias. Using a representative sample of over 2,100 individual investors in Germany and France, our econometric analysis reveals that the willingness to pay for sustainable investments is not significantly stronger in the non-incentivized than in the incentivized treatment, contrary to predictions from previous studies. The results are robust to various explanations of hypothetical bias and experimental design choices, and individual characteristics have mostly similar effects on preferences in both settings. The results of our empirical analysis offer insight into the reliability of previous stated choice experiments and provide guidance for future experiments. Additionally, our estimation results enhance the understanding of individual investment decisions, which is crucial from a policy perspective as individual investors play a critical role in financing the transition to a sustainable economy.
