Overconfidence and Risk Preferences of Impact Investors: A Behavioral Analysis of Italian Impact Investors in the Cleantech Sector

Michela Cocco & Martina Grilli

Student thesis: Master thesis


This thesis contributes to the impact investing field by adopting a behavioral finance perspective. Given the increased theoretical attention from impact investing scholars and practitioners to the concept of Impact Risk, the study analyses impact investors’ risk preferences by focusing on the influence exercised by the overconfidence bias on such preferences when choosing among cleantech carbon reduction investments. Starting from the Impact Investing Framework formulated by Hornsby & Blumberg (2013) and applying an innovative methodology combining the Choice-Based Conjoint Analysis and the Calibration Test, the researchers based their conclusions on a sample of impact investing experts in Italy. On the one hand, through the Choice-Based Conjoint Analysis, the conceptual and empirical separation of the novel concept of Impact Risk from the well-known notion of Financial Risk was demonstrated. On the other hand, through the Calibration Test, the presence of overconfidence among respondents was confirmed. However, no evidence was found on how the overconfidence bias explains impact investors’ preferences for the parameters of Financial and Impact Risk.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
Publication date2020
Number of pages169
SupervisorsKai Hockerts