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Previous research has demonstrated that consumers’ decisions regarding supplementary pensions could be affected by biases. Bernatzi and Thaler’s experiment demonstrated that menu design can influence pension fund enrollment decisions, in that participants appear to adopt a naïve heuristic, i.e., “extremeness aversion”. Using a database of 27 occupational pension funds from 2007 to 2011, representing 1,732,530 employees, this study asked whether menu design affected Italian workers’ choices regarding the supplementary pension system as a result of the new rules enacted by the regulator in 2007. Most enrolled workers opted for the median investment line. I discuss the possible relevance of this result to public policy, in particular the possibility of including these preferences in the regulations, with the aim of benefiting employees.

Policy instruments are a fundamental component of public policies. Policy instruments are often a result of mediation within the policy design process, whenever decision makers reshape existing instruments without introducing any real innovation. This results in imitation, layering and ambiguity in tool choice selection, and raises the theoretical problem of the logic according to which decision makers choose certain specific policy instruments rather than others. Decision makers may have different reasons for choosing certain specific instruments, although these reasons should be connected to the two main purposes of decision-making, that is, the search for effectiveness and the construction of a shared sense, a common acceptance. Thus, the choice of instruments is a question of potentially conflicting drivers that decision makers have to cope with within a specific decisional situation, when asked to solve those problems that have arisen. This paper examines this question and offers an analytical framework based on the two main factors in terms of which the selection of instruments is channelled and assessed: legitimacy and instrumentality. The boundaries created by how decision makers perceive these two dimensions mean that only four selection patterns can be chosen by decision makers: hybridization, stratification, contamination or routinization.

Based on a representative sample of Italian adults, this study aims to investigate the socio-demographic and socio-economic characteristics and the level of insurance knowledge influencing individual insurance risk propensity. Furthermore, it tests whether these factors influence the purchase of three non-mandatory insurance products, one comprising non-life insurance and for two life insurance. The obtained results demonstrate that there is no perfect relationship between determinants of individual insurance risk propensity and non-mandatory insurance product purchases. Specifically, the purchaser’s level of insurance knowledge does not influence insurance risk propensity but does influence the purchase of non-mandatory insurance products. This paper adds to the literature on the topic considering non-mandatory insurance products, studies being very rare, especially with reference to non-life insurance products. These results may assist policymakers and institutions in identifying areas of intervention and appropriate communication levers to direct attention toward the voluntary purchase of insurance products.

PurposeInspired by the groundbreaking novel European regulations on financial investors’ profiling (MiFID II regulation and the ESMA 2022 Guidelines), this paper aims to establish which distinctive socio-demographic traits distinguish investors who declare a generalized interest in all three environmental (E), social (S), and governance (G) pillars and investors who express interest in just one individual pillar or a combination of two pillars.Design/methodology/approachBased on a unique dataset of 190 real-world retail investors, this paper aims to create a profile of three types of investor: those whose interest lies in just the environmental pillar, those interested in a combination of the environmental and social pillars, and those interested in all three E, S, and G pillars jointly. Moreover, we try to ascertain whether it is possible to observe statistically significant differences between the different types of investors.FindingsThe results obtained indicate that it is possible to profile investors who are environmentally-oriented and investors who are ESG-oriented. Notably, levels of financial literacy do not influence investor ESG attitudes.Practical implicationsThe results obtained may have multifaceted implications for financial advisors, the banking and financial institution industry, and marketing strategists, as well as for further research.Originality/valueThe originality of this paper derives from the responses used in the analysis, which were collected from a sample of real-world retail investors who completed a mandatory MiFID-questionnaire, validated by the Italian Securities and Markets Supervisory Authority. Our paper thus represents a bridge between a theoretical approach and real-world practice.

Purpose This paper aims to explore the relationship between board composition and a firm’s commitment to combatting climate change. Specifically, this study investigates how various characteristics of the board, namely its size and presence of independent directors, and of the directors themselves, including gender diversity, age, educational background and national homogeneity, affect the corporate-level climate change orientation. From a theoretical standpoint, the authors take a cross-fertilizing perspective, bridging upper echelons theory with agency, resource dependence and critical mass theories. Design/methodology/approach The study uses ordered probit regression models on a hand-collected multi-country and multi-industry sample of 35 listed firms included in the Global Climate Change Liquid Equity Index (GALPLACC) provided by ECPI. This index is particularly relevant as it focuses on firms that have demonstrated a commitment to climate change, providing a robust dataset for the analysis. Findings The findings underscore the importance of disentangling various characteristics of corporate boards and directors. Specifically, the orientation toward climate change is negatively influenced by both board size and having a higher number of independent directors, while it is positively affected by reaching a critical mass of women on the board. Conversely, factors such as average age, educational background and the level of national homogeneity do not show significant effects. Originality/value This paper has an exploratory nature and contributes to the ongoing debate on the crucial, yet controversial role played by board-level and directors’ sociodemographic characteristics in shaping a firm’s environmental stance. Moreover, this study offers potential recommendations for policymakers regarding board composition to enhance firms’ climate change orientation.

Risk behavior can be capricious and may vary from month to month. We study 62 clients of a private bank in Northern Italy. The individuals are of special interest for several reasons. As active traders, they manage the value-at-risk (VaR) of a portion of their wealth portfolios. In addition, they act alone, i.e., without input from a financial adviser. Based on VaR-statistics, we find that, in general, the subjects become more risk-averse after suffering losses and more risk-seeking after experiencing gains. The monthly gains and losses that alter investor risk behavior represent true changes in wealth but are ＂on paper＂ only, i.e., not immediately realized. Our results allow several interpretations, but they are not at odds with a house money effect, or the possibility that overconfident investors trade on illusions. Rapidly shifting risk behavior in fast response to unstable circumstances weakens individual risk tolerance as a deep parameter and key construct of finance theory.

PurposeThis paper sets out to corroborate the existing literature on investors' risk tolerance and to assess how the 2008 financial crisis has affected risk tolerance among Italian investors.Design/methodology/approachBased on a unique dataset of real-world portfolio choices made by 1,245 Italian investors over a period of 15 years (from 2003 to 2017), this paper presents two steps of analysis. In step 1, the whole period 2003–2017 is considered with the aim to integrate and corroborate the existing literature on the topic of risk tolerance, considering a complete economic and financial cycle. Step 2 took 2008 as the pivotal point between pre-crisis (2003–2008) and crisis (2009–2017) with the aim to observe the influence on risk appetite of the economic and financial effects of the crisis.FindingsThe results obtained confirm that men are more risk tolerant than women and older people are less risk-taking than their younger counterparts, although the relationship between age and risk tolerance is not necessarily linear. Moreover, our paper demonstrates that a crisis scenario has an influence on Italian investors' risk tolerance.Practical implicationsOur results are of interest to financial advisors, financial planners, asset managers, psychologists, behavioral researchers and more in general to providers of financial products and services.Originality/valueThe results presented in this paper are relevant and original because they are based on real investors who made real choices concerning their portfolio asset allocations.

PurposeThis paper aims to develop a conceptual framework on how the representativeness heuristic operates in the decision-making process. Specifically, the authors unbundle representativeness into its building blocks: search rule, stopping rule and decision rule. Furthermore, the focus is placed on how individual-level cognitive and behavioral factors, namely experience, intuition and overconfidence, affect the functioning of this heuristic.Design/methodology/approachFrom a theoretical standpoint, the authors build on dual-process theories and on the adaptive toolbox view from the “fast and frugal heuristics” perspective to develop an integrative conceptual framework that uncovers the mechanisms underlying the representativeness heuristic.FindingsThe authors’ conceptualization suggests that the search rule used in representativeness is based on analogical mapping from previous experience, the stopping rule is the representational stability of the analogs and the decision rule is the choice of the alternative upon which there is a convergence of representations and that exceeds the decision maker's aspiration level. In this framework, intuition may help the decision maker to cross-map potentially competing analogies, while overconfidence affects the search time and costs and alters both the stopping and the decision rule.Originality/valueThe authors develop a conceptual framework on representativeness, as one of the most common, though still poorly investigated, heuristics. The model offers a nuanced perspective that explores the cognitive and behavioral mechanisms that shape the use of representativeness in decision-making. The authors also discuss the theoretical implications of their model and outline future research avenues that may further contribute to enriching their understanding of decision-making processes.

In the last 30 years, Local Governments all over Europe experienced an intense season of institutional change of unprecedented width and intensity. This paper focuses on a neglected type of institutional change, a more indirect one – here labeled oblique-change – that however strongly influences the overall LG institutional change and local autonomy. Taking 2012 as the climax of the austerity period in Europe and Italy as a pilot case for future comparisons, this article shows that oblique-change matters to a considerable extent, and that it is much more frequent and highly impacting than expected. Moreover, it argues that bradyseismic adjustments provoked by oblique-change may turn out in an equally profound change of the local government's asset, as that induced by major reforms.

This paper investigates the composition of the internal policy advisory system (PAS) in a Napoleonic country, Italy, where policy formulation and advice have traditionally been dominated by the Ministerial Cabinets, legal competences, and with a clear influence of political parties in the selection of experts. Based on the literature on the PASs, we argue that the role of the governments in shaping the systems of advice is growing and discuss how different trends push towards a pluralization of the advisers in the Napoleonic systems. Our research undertakes a unique mapping of the internal PAS in the second Conte government (2019–2021), in order to show if the Italian PAS is becoming more plural, and who are the advisors (in terms of how varied are their characteristics, skills and mandates). Our analysis combines the descriptive mapping of the internal PAS with qualitative interviews aimed at better understanding the move from the domination of the Ministerial Cabinet towards a complex and loosely coupled network of advisors.