What behaviors will we track?

-Behaviours of current governmental restrictions that prevent social impact investments from taking place

• Tension growing between mistrust and public expectations of the governments creates a risk which challenges 2

Psychological implications are huge factors that influence investment decisions. These implications include: 

• Loss of aversion: Fear of letting go

“refers to the human tendency to prioritize avoiding losses over acquiring equivalent gains.”

• Cognitive Dissonance: Conflicting realities

“In the world of investing, cognitive dissonance can manifest when an investor realizes that a chosen investment is underperforming.”

• Confirmation bias: The comfort of familiarity.

“In investing, confirmation bias can lead investors to gravitate toward news and analysis that align with their optimistic or pessimistic outlook on a particular stock or market trend. As a result, investors may ignore or downplay information that contradicts their viewpoint, potentially blinding them to the full spectrum of potential risks and rewards.”

• Anchoring Bias: The Weight of Initial Impressions

“Anchoring bias demonstrates how the first piece of information encountered can disproportionately influence subsequent decisions. Investors prone to this bias may anchor their expectations for an investment's performance based on its recent high or low, leading to overly optimistic or pessimistic predictions.”

Source 1

How often would you track it? Why?

We will be tracking this behavior 3 times, each at a different time. We will be tracking two instances of our chosen behaviors in the past and one current instance, the survey we recently created. The two past instances will be tracked through secondary research, namely past articles and/or reports published on our tracked behaviors. 

1st track-2013. $25 Billion Assets Under Management (WEF 2013) 

2nd track-2019 $502 billion Assets Under Management (Mudaliar and Dithrich 2019). 

We can see that funds for impact investments have significantly increased with time. Many emerging markets are yearning for additional funds towards areas that make positive change, which is why assets under management have grown significantly and almost doubled in 6 years. In addition, structures like the Global INvesting Network and the United Nations’s Principles for Responsible Investment have provided the necessary support for the growth of impact investing. 

Tracking our behavior at two varying points in time allows us to generate a more holistic overview of our problem by incorporating varying perspectives on our behavior. Investment behavior is dynamic, constantly changing over time and to other essential factors. Therefore, only tracking our behavior at one point would lead us to limited data, not accounting for how the behavior has changed over time. 

Furthermore, in the first image, we can see managers of venture funds against the year they were founded. We can see that in 2010, impact investing and their venture funds spiked up; however, towards the end of the 2010s, we can see that it slowly slowed down. This demonstrates a need for more impact investment causes. We can also see that impact investors are higher in developed markets than in emerging markets. This is not suitable for markets because they are the ones who are in actual need of more investments going towards subjects of impact. 

Some conclusions we have reached with our investigation so far is:

-Additional tailored policies and financial instruments are needed to accelerate impact investments across European regions. 

-Policies and instruments that have worked in individual countries, such as France, can act as a model for developing impact investing in developing communities. 

Networks and associations must share data and practices with developing communities instead of starting their impact investing sector from scratch. 

Regions as a whole need to integrate impact measurement and management into the tools to get the best solution. 

Explain why it is essential to think carefully about what behaviour you are tracking and the timing and length of your observations.

Our chosen behavior is highly relevant to track to create our chosen solution of creating a platform to allow social impact investing. To solve the issues regarding social impact investments (solution), particularly the gaps in processes that allow for social impact investment, it’s imperative to determine precisely what these gaps are (tracked behavior). From Table 4, we can see that developed areas already have many impact investments coming.

Is there another format (besides a spreadsheet) for gathering the data that could be appropriate? Explain.

Yes, instead of finding data from world sources that already exist, we can discover and record our data based on surveys and collect our data sources by analyzing the gap between the current GDP and the social and “needful” aspects of countries and trying to see a relationship between these two data points. 

Source 2