Effects of informational nudges on consumer debt repayment behaviors

Jones, Lauren E.; Loibl, Cäzilia; Tennyson, Sharon

doi:10.1016/j.joep.2015.06.009

Cited by 47 publications

(32 citation statements)

References 26 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The results of the study were that perceptions on usefulness, behavioral control, and subjective norms had significant effects on usage of the innovation and that financial capability was attributed to increased usage thereof. Jones et al (2015) focused on the FINN in form of informational nudges on consumer credit card debt repayment behaviors in the USA. The findings suggest that disclosures required under the Credit Card Accountability Responsibility and Disclosure (CARD) Act introduced in 2009 were effective in inducing households to increase the amounts of credit card debt paid off each month, more so for those who pay off balances in full each month.…”

Section: Literature Reviewmentioning

confidence: 99%

“…(Cadena & Schoar, 2011;Francis, Blumenstock, & Robinson, 2017;Ozili, 2018). Studies suggest that FINN has the potential of fostering positive behavioral factors and financial discipline; for example reminders through short message service (SMS) may lead to increased savings (Karlan, McConnell, Mullainathan, & Zinman, 2016;Kast, Meier, & Pomeranz, 2018) and enhanced loan repayment (Cadena & Schoar, 2011;Jones, Loibl, & Tennyson, 2015;Karlan, Morten, & Zinman, 2012). Also, scholars have highlighted the impact of FINN on modification of behavior for enhanced usage of financial services such as encouraging savings by appealing to peoples' gambling tendencies as well as provision of price or lottery linked financial products or accounts.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Mediating Effects of Financial Innovations between Behavioral Factors and Financial Inclusion of Micro Enterprises in Kenya

Byegon

Cheboi

Bonuke

2019

SJOM

View full text Add to dashboard Cite

Purpose: Understanding the mediating role of the adoption of financial innovations on the relationship behavioral factors and utilization of formal financial services was the main aim of this research. The behavioral factors examined were self-control, confidence and social proof. The study is premised on behavioral finance theories. Design/Methodology: The positivist approach and explanatory research designs were adopted to understand the relationships between the variables under investigation. A sample of 486 owners/managers of licensed micro-enterprises in Nairobi, Kenya were selected using stratified random sampling technique. Primary data was collected through a structured questionnaire. Hypotheses were tested using Hayes and Zhao approach for mediation analysis. Findings: The results showed that financial innovations mediated the relationship between each of the behavioral factors and financial inclusion, that is; self- control (β =.0941, ρ= .00), confidence; (β = .1019, ρ = .00) and social proof (β = .1036, ρ = .00). Practical implications: The study has brought into fore the mediating role of financial innovations on the relationship between the three behavioral factors and financial inclusion. Thus, practitioners are encouraged give due attention to behavioral factors and financial innovations in policy formulation and programs geared towards optimal utilization of financial services.

show abstract

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Mediating Effects of Financial Innovations between Behavioral Factors and Financial Inclusion of Micro Enterprises in Kenya

Byegon

Cheboi

Bonuke

2019

SJOM

View full text Add to dashboard Cite

show abstract

“…This helps to remove the effects of the financial c r isis f r om h i s p o licy s i mulation. 26 I n h i s m o del, l e nders learn information about two characteristics of each borrower: i) their demand elasticity for credit and ii) their default risk. The ability of lenders to reprice because of information about the former characteristic increases markups and hence is welfare reducing, while the ability to reprice due to the latter characteristic mitigates adverse selection and so is welfare-enhancing.…”

Section: Empiricsmentioning

confidence: 99%

Dynamic Pricing of Credit Cards and the Effects of Regulation

Hong¹,

Hunt²,

Serfes³

2018

Working Paper (Federal Reserve Bank of Philadelphia)

View full text Add to dashboard Cite

We construct a two-period model of revolving credit with asymmetric information and adverse selection. In the second period, lenders exploit an informational advantage with respect to their own customers. Those rents stimulate competition for customers in the first period. The informational advantage the current lender enjoys relative to its competitors determines interest rates, credit supply, and switching behavior. We evaluate the consequences of limiting the repricing of existing balances as implemented by recent legislation. Such restrictions increase deadweight losses and reduce ex ante consumer surplus. The model suggests novel approaches to identify empirically the effects of this law.

show abstract

“…Richard Thaler and Cass Sunstein (2009), for example, argue that incentives and regulations ought to be structured so as to encourage individuals to engage in less future discounting. 7 Debtors should be 'nudged' to seek out loans with lower interest rates or to make additional payments on the principal of existing loans (Jones et al, 2015). Other thinkers go farther, arguing that debtors should be prevented from accessing certain kinds of debt products altogether, such as payday loans that charge extremely high interest rates (as in Peterson, 2012).…”

Section: Debt Fails To Generate Wealth For Debtorsmentioning

confidence: 99%

Transforming usury into finance: Financialization and the ethics of debt

Walsh

2018

Finance soc.

View full text Add to dashboard Cite

This article examines the conceptual transformation of what was once considered usury into finance. To counter traditional arguments that usury was exploitative and unnatural, early modern theorists reconceptualized debt as a form of investment for both borrowers and lenders. Today, this ethical justification of debt as an investment underlies the rhetoric of finance and financialization. Close examination of the realities of contemporary financialized debt, however, reveal that much of this rhetoric is misleading and false. While the rhetoric of finance is unrelentingly oriented toward the future, the lived reality of debt is one of being constrained and haunted by the past. Relatedly, this rhetoric exhorts borrowing for investment, while finance has actually had the opposite effect of making consumer debt a necessity for the majority of Americans. Taken together, these realities of debt today contradict the rhetoric of finance as investment and undermine the ethical framework on which it depends.

show abstract

Effects of informational nudges on consumer debt repayment behaviors

Cited by 47 publications

References 26 publications

Mediating Effects of Financial Innovations between Behavioral Factors and Financial Inclusion of Micro Enterprises in Kenya

Mediating Effects of Financial Innovations between Behavioral Factors and Financial Inclusion of Micro Enterprises in Kenya

Dynamic Pricing of Credit Cards and the Effects of Regulation

Transforming usury into finance: Financialization and the ethics of debt

Contact Info

Product

Resources

About