Is Sin Always a Sin? The Interaction Effect of Social Norms and Financial Incentives on Market Participants’ Behavior

• Main Authors: LIU, Yanju, LU, Hai, VEENSTRA, Kevin
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2014
• Subjects: Social norms; financial incentives; sin stocks; Accounting; Portfolio and Security Analysis
• Online Access: https://ink.library.smu.edu.sg/soa_research/1263; https://ink.library.smu.edu.sg/context/soa_research/article/2262/viewcontent/SSRN_id2419667.pdf
• Institution: Singapore Management University

Using alcohol, tobacco, and gaming consumption data and people’s attitudes toward these sin products to proxy for social norm acceptance levels, we show a strong interaction effect between social norms and financial incentives, which significantly influence the behavior of market participants. Speci...