Experienced and Novice Investors: Does Environmental Information Influence on Investment Allocation Decisions?

This paper examines the effect of environmental information on the investment <p> decisions of investors. The motivation for the experimental design <p> applied in this study is that unless actual decision making is observed, <p> the potential usefulness of environmental information (or lack <p> thereof) cannot be taken for granted. The study is based on an experiment <p> where groups of investors (varied by experience) were asked to <p> make investment allocation decisions based on financial information and <p> on supplementary environmental information (varied between cases). As <p> an investment allocation decision (varied by investment horizons) the <p> groups were asked to allocate funds to two companies based on the available <p> information. The findings suggest that environmental information has <p> the potential to influence investment allocation decisions. The findings <p> also suggest that the influence of environmental information on investment <p> allocation decisions is mitigated by the variables considered explicitly <p> in this study, i.e., the investment horizon (varied as short and long) <p> and investor experience (varied as novice and experienced investor). It is <p> concluded that because allocation decisions are multifaceted problems, <p> mixed results related to the influence of environmental information should <p> be expected