Virtual reality and temporal Myopia: Insights from a multitask experiment in green bond investments

This study employs a multitask research approach to investigate how a Virtual Reality experience affects behavioral constructs that might shape temporal myopia in investment preferences, as revealed through a Discrete Choice Experiment focused on green bonds. We model key behavioral constructs inspired by the Theory of Planned Behavior to capture individuals' attitudes toward climate change. These pro-environmental behavioral constructs are then incorporated as latent variables within a Hybrid Choice Model to examine their implicit influence on maturity preferences in green bond investments, alongside risk and return characteristics. We then explore the impact of Virtual Reality in affecting pro-environmental behavioral constructs and analyze its varying effectiveness across different socio-economic and demographic groups. Using a sample of 113 individuals from three southern European countries (namely, Italy, Greece, and Bulgaria), we find that pro-environmental behavioral constructs shape investment choices by decreasing the temporal myopia that could hinder the willingness to invest in green bonds. Moreover, Virtual Reality significantly enhances pro-environmental behavioral constructs, with a particularly strong effect on Attitudes and Subjective Norms among well-educated men with children. These findings advance the understanding of decision-making biases in sustainable finance and suggest that immersive technologies may help address the behavioral mechanisms underlying temporal myopia and enable more targeted, effective strategies for promoting long-term sustainable investment behaviors.