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We exploit a modification to Sustainalytics' environmental, social, and governance (ESG) rating methodology, which is subsequently adopted by Morningstar, to study whether ESG ratings are salient for stock pricing. We show that the inversion of the rating scale but not new information leads some...
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We study experimental markets in which participants face incentives modeled upon those prevailing in markets for … prices are close to intrinsic value, the effect of incentives is mild. However under conditions in which markets are prone to … bubble, mispricing is greatly exacerbated by incentives. Even in experienced markets, prices climb to levels clearly …
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