The Influence of Brand Value Rankings on Investment Decisions of Private Investors

Abstract

Investment decisions of private investors are characterized by information asymmetries. Publicly visible brand value rankings can serve as decision signals by translating intangible brand strength into a comparable monetary metric. This study experimentally investigates how the visibility of such rankings affects private investors' portfolio allocation and whether this effect is moderated by investment knowledge. In an online experiment (n=244), participants assembled an investment portfolio from 20 available companies (investment opportunities). A randomized treatment group received an adapted brand value ranking beforehand, while the control group did not. The analysis examined allocation decisions along two dimensions: whether to invest (extensive margin), how much to invest (intensive margin), and portfolio breadth (number of holdings). Results show that rankings act as selection filters: participants exposed to rankings invest less frequently in unranked and low-ranked brands (extensive margin) but allocate higher amounts to top-ranked brands when they invest (intensive margin). Regarding quantity (number of holdings), the treatment group invests in significantly fewer distinct companies, particularly in the segments of lower ranks and unranked brands. While subjective investor knowledge is robustly associated with broader portfolio choice, it does not systematically neutralize the influence of the ranking. In summary, brand value rankings systematically structure investor behavior: They can influence which companies are selected, how much is allocated to each selected company, and how many different companies are held in total. The findings underscore the financial relevance of brands as behaviorally effective signals, but their external validity is limited due to the experimental design with hypothetical decisions.

Keywords: Investment decisions, brand value, signaling theory

DOI: 10.7176/RJFA/17-2-06

Publication date: June 30^th 2026