Gender Differences in Financial Decisions

Abstract: Investment behavior is strongly affected by the level of risk we are willing to take and to what extent we believe an investment is going to be successful. It has been found in previous experiments that men and women tend to have different risk preferences and beliefs, with dissimilar investment behavior as consequence. In this study risk preferences and beliefs among men and women are elicited with focus on two factors of the risky asset; the gender of the CEO and the level of sustainability and ethics. This is done by investigating the behavior of men and women in a combined investment game and vignette study. The results show that women in general both invest and believe less in assets than men do. Neither the gender of the CEO nor the level of sustainability and ethics change this relationship, but the level of sustainability and ethics is found to affect the investment behavior to similar extent among both men and women. However, women show significantly higher levels of self reported importance of sustainability and ethics which is inconsistent with the shown investment behavior.