Ugo Rigoni

You Lose, I Feel Better: Rivalry Between Soccer Teams and the Impact of Schadenfreude on Stock Market

This study considers the game-related performance of two listed soccer clubs in Italy which share the same stadium: Roma and Lazio. We introduce the performance of the archrival in the analysis. The high level of rivalry in sports should lead to a feeling of pleasure at the suffering of another group (known in German as Schadenfreude) and we assume to see the satisfaction of investor fans with the defeat of the archrival. Likewise, the win of the archrival can have a negative impact on the mood of investors. This study shows that, when club supporters experience the negative performance of their team, the results of their archrival can affect their investment decisions. It is therefore proven that, at least in this respect, the investors (also widely represented by club supporters) are driven by the sentiments conveyed by rivalry which, considered to be a source of emotion, may be relevant to the market.

The Integrated Reporting and the Conference Calls Content

In this chapter we carry out a fact-based study and answer two main yet unanswered research questions: first, whether and how the adoption of Integrated Reporting (IR) affects the sustainability communication with the market through the channel of conference calls; second, to what extent financial market participants ask for sustainability information when they are in direct dialogue with firms. To answer these questions we analyse the conference calls’ transcripts of firms that have adopted IR framework. Our findings reveal that the sustainability issues are not commonly addressed during the conference calls of IR adopters. This is particularly true while analysing the Q&A session of the call. The probable reason for this evidence comes from the market since the sustainability dimension of information merits a very low level of analysts’ interest. Overall, our empirical evidence supports the dynamic perspective of the International Integrated Reporting Council Framework.

Risk Taking Behaviour and Diversification Strategies: Do Financial Literacy and Financial Education Play a Role?

This study investigates whether financial education and financial literacy influence the risk taking of non-professional investors and the diversification strategies they pursue. To this purpose, we submitted a questionnaire to 711 US residents. Our results show that financial education prevents financial illiteracy and changes the investment process of investors. On the other hand, financial literacy, measured according to the synthetic metric introduced by Lusardi and Mitchell, does not influence risk taking. Financial education indirectly exerts its influence also on a simple diversification behaviour, the so-called naive diversification, pursued equally splitting wealth among investment classes. In fact, whereas for uneducated investors there is no relationship between risk diversification strategies with both financial literacy and the main investor features, for educated investors financial literacy fosters such diversification behaviour. These results have important policy implications showing that financial education can trigger relevant changes in the investment patterns of investors. Our study introduces a series of novelties. First, we focus on how financial education and financial literacy simultaneously affect the investment process of investors. Moreover, we attempt to disentangle their effects on the risk taking dimension and diversification strategies, which are the most effective way to contain the potentially disruptive effects of risks taken.