Consumers with higher income often spend more on luxury goods. As a result, lower-income consumers who seek to increase their perceived income status may be motivated to purchase conspicuous luxury goods. They may also desire to emulate the visible consumption displayed by their wealthier peers. Using a unique vehicle financing dataset, we find that consumers with lower credit scores value vehicle brand prestige more than average consumers. The stronger preferences for prestige lead non-prime consumers to purchase more expensive vehicles than they otherwise would have. We find evidence that the preferences for prestige are driven both by status signaling and peer emulation motives. Furthermore, we show that larger vehicle purchases financed by auto loans lead to worse loan performance and credit standing for non-prime consumers.
{"title":"Conspicuous Consumption: Vehicle Purchases by Non-Prime Consumers","authors":"Wenhua Di, Yichen Su","doi":"10.2139/ssrn.3857387","DOIUrl":"https://doi.org/10.2139/ssrn.3857387","url":null,"abstract":"Consumers with higher income often spend more on luxury goods. As a result, lower-income consumers who seek to increase their perceived income status may be motivated to purchase conspicuous luxury goods. They may also desire to emulate the visible consumption displayed by their wealthier peers. Using a unique vehicle financing dataset, we find that consumers with lower credit scores value vehicle brand prestige more than average consumers. The stronger preferences for prestige lead non-prime consumers to purchase more expensive vehicles than they otherwise would have. We find evidence that the preferences for prestige are driven both by status signaling and peer emulation motives. Furthermore, we show that larger vehicle purchases financed by auto loans lead to worse loan performance and credit standing for non-prime consumers.","PeriodicalId":145550,"journal":{"name":"Psychology & Human Decision-Making eJournal","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128669672","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study aims to evaluate critical factors that drive lender trust in the platform to provide lend through a Peer-to-Peer (P2P) Lending Platform. P2P lending is a financial technology that facilitates lending mechanisms between lenders and borrowers through the Internet without collateral and financial institutions' involvement. Thus, lenders should trust the platform to willingly making a transaction using the online lending systems. We hypothesize that perceived regulatory protection, service quality, and security protection build the lender's trust in the P2P lending platform and investor willingness to invest. We test the model using empirical data from 180 participants experienced in Indonesia P2P lending using the structural equation (SEM) method. The results show that Willingness to Lend is significantly affected by Trust in Platform, while Perceived Regulatory Protection, Service Quality and Security Protection are significant factors influencing lenders' Trust in the Platform.
{"title":"Exploring the Critical Factors Affecting Lender Trust to Invest in Online Peer-to-Peer Lending in Indonesia","authors":"Amanda Ardelia, Z. Dalimunthe, R. Triono","doi":"10.2139/ssrn.3889859","DOIUrl":"https://doi.org/10.2139/ssrn.3889859","url":null,"abstract":"This study aims to evaluate critical factors that drive lender trust in the platform to provide lend through a Peer-to-Peer (P2P) Lending Platform. P2P lending is a financial technology that facilitates lending mechanisms between lenders and borrowers through the Internet without collateral and financial institutions' involvement. Thus, lenders should trust the platform to willingly making a transaction using the online lending systems. We hypothesize that perceived regulatory protection, service quality, and security protection build the lender's trust in the P2P lending platform and investor willingness to invest. We test the model using empirical data from 180 participants experienced in Indonesia P2P lending using the structural equation (SEM) method. The results show that Willingness to Lend is significantly affected by Trust in Platform, while Perceived Regulatory Protection, Service Quality and Security Protection are significant factors influencing lenders' Trust in the Platform.","PeriodicalId":145550,"journal":{"name":"Psychology & Human Decision-Making eJournal","volume":"2016 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114657097","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Katherine L. Milkman, Mitesh S. Patel, Linnea Gandhi, Heather N. Graci, Dena M. Gromet, Hung-Yao Ho, Joseph S. Kay, Timothy W Lee, Jonathan E. Bogard, Ilana Brody, C. Chabris, Edward H. Chang, G. Chapman, Jennifer E Dannals, Noah J. Goldstein, A. Goren, Hal E. Hershfield, A. Hirsch, Jillian Hmurovic, Samantha Horn, Dean S. Karlan, A. Kristal, Cait Lamberton, M. Meyer, Allison H. Oakes, M. Schweitzer, Maheen Shermohammed, Joachim H. Talloen, Caleb Warren, Ashley V. Whillans, K. Yadav, Julian J. Zlatev, Ron Berman, Chalanda N. Evans, Christopher K. Snider, Eli Tsukayama, Christophe Van den Bulte, K. Volpp, A. Duckworth
We partnered with Walmart to test 22 nudges designed to boost vaccination rates in their pharmacies. Nudges were delivered via text message to over 700,000 Walmart pharmacy patients in the fall of 2020 and encouraged patients to visit Walmart for a flu vaccine. We demonstrate that the best behaviorally informed messages can increase pharmacy vaccination rates by up to 8.3% compared to the least effective messages over a roughly one month follow-up period. The most effective messages in our field experiment matched the tone of typical pharmacy communications and reminded patients that a flu shot was waiting for them. These insights suggest that carefully crafted messages informed by the results of this study could nudge the adoption of other vaccines for other infectious diseases, including COVID-19.
{"title":"A Mega-Study of Text-Message Nudges Encouraging Patients to Get Vaccinated at their Pharmacy","authors":"Katherine L. Milkman, Mitesh S. Patel, Linnea Gandhi, Heather N. Graci, Dena M. Gromet, Hung-Yao Ho, Joseph S. Kay, Timothy W Lee, Jonathan E. Bogard, Ilana Brody, C. Chabris, Edward H. Chang, G. Chapman, Jennifer E Dannals, Noah J. Goldstein, A. Goren, Hal E. Hershfield, A. Hirsch, Jillian Hmurovic, Samantha Horn, Dean S. Karlan, A. Kristal, Cait Lamberton, M. Meyer, Allison H. Oakes, M. Schweitzer, Maheen Shermohammed, Joachim H. Talloen, Caleb Warren, Ashley V. Whillans, K. Yadav, Julian J. Zlatev, Ron Berman, Chalanda N. Evans, Christopher K. Snider, Eli Tsukayama, Christophe Van den Bulte, K. Volpp, A. Duckworth","doi":"10.2139/SSRN.3780356","DOIUrl":"https://doi.org/10.2139/SSRN.3780356","url":null,"abstract":"We partnered with Walmart to test 22 nudges designed to boost vaccination rates in their pharmacies. Nudges were delivered via text message to over 700,000 Walmart pharmacy patients in the fall of 2020 and encouraged patients to visit Walmart for a flu vaccine. We demonstrate that the best behaviorally informed messages can increase pharmacy vaccination rates by up to 8.3% compared to the least effective messages over a roughly one month follow-up period. The most effective messages in our field experiment matched the tone of typical pharmacy communications and reminded patients that a flu shot was waiting for them. These insights suggest that carefully crafted messages informed by the results of this study could nudge the adoption of other vaccines for other infectious diseases, including COVID-19.","PeriodicalId":145550,"journal":{"name":"Psychology & Human Decision-Making eJournal","volume":"131 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121313747","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This paper examines the impacts of retail borrowers’ emotions and personality traits on their abilities to engage in appropriate responses when things unexpectedly go wrong and they get into debt repayment difficulties. We establish several scenarios where borrowers are hit with unforeseen circumstances that affect their abilities to make their loan payments and we classify and evaluate the riskiness of the strategies they state that they would adopt in those situations. Via an extensive on-line survey conducted in the UK, we show that borrowers who were most comfortable about taking on debts in the first place, those who show neurotic tendencies, and those who believe that they have control over events rather than being controlled by them, are more likely to undertake high risk strategies when faced with unforeseen issues that affect their ability to meet their debt interest and repayment costs. We also find that respondents who identify as feeling excited, alert or guilty, as well as younger borrowers and those who are single or renters, are more likely to opt for risky approaches. Our findings have potentially important implications for lenders, regulators and debt counselling services regarding the types of people who are most likely to get into debt troubles.
{"title":"The Impacts of Emotions and Personality on Borrowers’ Abilities to Manage Their Debts","authors":"S. Rendall, Chris Brooks, Carola Hillenbrand","doi":"10.2139/ssrn.3705181","DOIUrl":"https://doi.org/10.2139/ssrn.3705181","url":null,"abstract":"Abstract This paper examines the impacts of retail borrowers’ emotions and personality traits on their abilities to engage in appropriate responses when things unexpectedly go wrong and they get into debt repayment difficulties. We establish several scenarios where borrowers are hit with unforeseen circumstances that affect their abilities to make their loan payments and we classify and evaluate the riskiness of the strategies they state that they would adopt in those situations. Via an extensive on-line survey conducted in the UK, we show that borrowers who were most comfortable about taking on debts in the first place, those who show neurotic tendencies, and those who believe that they have control over events rather than being controlled by them, are more likely to undertake high risk strategies when faced with unforeseen issues that affect their ability to meet their debt interest and repayment costs. We also find that respondents who identify as feeling excited, alert or guilty, as well as younger borrowers and those who are single or renters, are more likely to opt for risky approaches. Our findings have potentially important implications for lenders, regulators and debt counselling services regarding the types of people who are most likely to get into debt troubles.","PeriodicalId":145550,"journal":{"name":"Psychology & Human Decision-Making eJournal","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124230086","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Frank M. Magwegwe, M. Macdonald, HanNa Lim, Stuart J. Heckman
Financial worry is a major issue for many people in developed economies, and the increasing frequency and intensity of financial worry is associated with lower psychological well-being and impaired cognitive functioning. The existing literature currently lacks theory-based studies of financial worry. Grounded in a theoretical model of worry, the present study sought to advance the conceptual and empirical understanding of financial worry. We positioned objective subjective financial stress (OFS), subjective financial stress (SFS), and financial and personal resources as key variables in understanding the psychological mechanisms of financial worry. The cross-sectional data consisted of responses from a representative sample of 19,040 adults, aged 18 and older, drawn from a large U.S. survey. Hierarchical regression results revealed that SFS and financial and personal resources are all key determinants of financial worry. The results also revealed that SFS fully mediated the effects of OFS on financial worry and accounted for the greatest percentage of variance in financial worry (22%, p < 0.001). Furthermore, the results revealed an adverse effect of SFS on financial worry; however, this effect is moderated by financial resources. The implications of our findings for future research, employers, practitioners, and policymakers are discussed.
{"title":"Determinants of Financial Worry","authors":"Frank M. Magwegwe, M. Macdonald, HanNa Lim, Stuart J. Heckman","doi":"10.2139/ssrn.3700160","DOIUrl":"https://doi.org/10.2139/ssrn.3700160","url":null,"abstract":"Financial worry is a major issue for many people in developed economies, and the increasing frequency and intensity of financial worry is associated with lower psychological well-being and impaired cognitive functioning. The existing literature currently lacks theory-based studies of financial worry. Grounded in a theoretical model of worry, the present study sought to advance the conceptual and empirical understanding of financial worry. We positioned objective subjective financial stress (OFS), subjective financial stress (SFS), and financial and personal resources as key variables in understanding the psychological mechanisms of financial worry. The cross-sectional data consisted of responses from a representative sample of 19,040 adults, aged 18 and older, drawn from a large U.S. survey. Hierarchical regression results revealed that SFS and financial and personal resources are all key determinants of financial worry. The results also revealed that SFS fully mediated the effects of OFS on financial worry and accounted for the greatest percentage of variance in financial worry (22%, p < 0.001). Furthermore, the results revealed an adverse effect of SFS on financial worry; however, this effect is moderated by financial resources. The implications of our findings for future research, employers, practitioners, and policymakers are discussed.","PeriodicalId":145550,"journal":{"name":"Psychology & Human Decision-Making eJournal","volume":"148 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116687143","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This is a PDF file of 'Financial Behavior: The Psychology of Client Communications" presented at the Financial Planning Association (FPA) of Greater Indiana Chapter, November 2019 meeting. This presentation focused on how financial experts and their clients exhibit a wide array of behavioral biases that many times result in incorrect judgments and decisions. Understanding cognitive and emotional issues are important for financial planners and investment advisors to ensure clients are being provided the best financial advice and investment data. The presenter describes some common behavioral finance biases and offers ways for overcoming these biases.
{"title":"Financial Behavior: The Psychology of Client Communications (Presentation Slides)","authors":"Victor Ricciardi","doi":"10.2139/ssrn.3584832","DOIUrl":"https://doi.org/10.2139/ssrn.3584832","url":null,"abstract":"This is a PDF file of 'Financial Behavior: The Psychology of Client Communications\" presented at the Financial Planning Association (FPA) of Greater Indiana Chapter, November 2019 meeting. \u0000 \u0000This presentation focused on how financial experts and their clients exhibit a wide array of behavioral biases that many times result in incorrect judgments and decisions. Understanding cognitive and emotional issues are important for financial planners and investment advisors to ensure clients are being provided the best financial advice and investment data. The presenter describes some common behavioral finance biases and offers ways for overcoming these biases.","PeriodicalId":145550,"journal":{"name":"Psychology & Human Decision-Making eJournal","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122411081","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Process motivation theories focus on how people identify which behaviors will best fulfill their needs, why their needs are different, why they experience variation in their needs, the mental processes they experience to understand their circumstances, and how they determine that their needs are satisfied (Lussier & Achan, 2016). These theories offer solutions as to how managers can motivate their employees by meeting their intrinsic need for fulfillment and reward. Reinforcement theory, on the other hand, subscribes to the idea that employee motivation to perform can be controlled externally through consequences for certain behaviors. In this paper, we will explore expectancy theory, goal-setting theory, and reinforcement theory, their differences, and how all three theories speak to the significance of employee motivation for any organization.
{"title":"Expectancy, Goal-Setting, and Reinforcement: Behavioral Theories and their Application in the Workplace","authors":"A. Scott","doi":"10.2139/ssrn.3480853","DOIUrl":"https://doi.org/10.2139/ssrn.3480853","url":null,"abstract":"Process motivation theories focus on how people identify which behaviors will best fulfill their needs, why their needs are different, why they experience variation in their needs, the mental processes they experience to understand their circumstances, and how they determine that their needs are satisfied (Lussier & Achan, 2016). These theories offer solutions as to how managers can motivate their employees by meeting their intrinsic need for fulfillment and reward. Reinforcement theory, on the other hand, subscribes to the idea that employee motivation to perform can be controlled externally through consequences for certain behaviors. In this paper, we will explore expectancy theory, goal-setting theory, and reinforcement theory, their differences, and how all three theories speak to the significance of employee motivation for any organization.","PeriodicalId":145550,"journal":{"name":"Psychology & Human Decision-Making eJournal","volume":"83 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-10-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134500509","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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