Abstract In this paper, we study insurance decisions when the policyholder evaluates insurance with narrow framing. We show that due to aversion to risk on the net insurance payoff, i.e., insurance indemnity minus insurance premium, narrow framing reduces insurance demand. This helps explaining the observed low insurance demand in many insurance markets. We also show that the optimal insurance contract involves a deductible and the coinsurance of losses above the deductible when transaction costs depend on the actuarial value of the policy. Moreover, when the policyholder is loss averse over the net insurance payoff, a fixed indemnity equal to insurance premium should be paid for a range of intermediate losses.
{"title":"Optimal Insurance Design Under Narrow Framing","authors":"Jiakun Zheng","doi":"10.2139/ssrn.3176902","DOIUrl":"https://doi.org/10.2139/ssrn.3176902","url":null,"abstract":"Abstract In this paper, we study insurance decisions when the policyholder evaluates insurance with narrow framing. We show that due to aversion to risk on the net insurance payoff, i.e., insurance indemnity minus insurance premium, narrow framing reduces insurance demand. This helps explaining the observed low insurance demand in many insurance markets. We also show that the optimal insurance contract involves a deductible and the coinsurance of losses above the deductible when transaction costs depend on the actuarial value of the policy. Moreover, when the policyholder is loss averse over the net insurance payoff, a fixed indemnity equal to insurance premium should be paid for a range of intermediate losses.","PeriodicalId":224430,"journal":{"name":"Decision-Making in Economics eJournal","volume":"24 26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-01-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128466448","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 focused on the brand equity that affects brand loyalty of the bottled mineral drinking water by integrating brand equity and brand loyalty models. This study adopted self-administered questionnaires to collect data and used quantitative data analysis. Four hundred of customers who drank the bottled mineral drinking water were collected. The sample was selected using purposive sampling method. The statistics used to analyze data were frequency, percentage, mean, standard deviation, and multiple regression analysis. The result indicates a mediating relationship among the dimensions of brand equity and brand loyalty. The result from multiple regressions showed significant level 0.000 for brand equity that affects brand loyalty of the bottled mineral drinking water. When broken into details, brand association and brand perceived quality significantly affect brand loyalty. As well as the combined effect of the model indicated that 52.6 percent of the total variance in brand equity affects brand loyalty of the bottled mineral drinking water.
{"title":"Brand Equity Affects Brand Loyalty of the Bottled Mineral Drinking Water in Thailand","authors":"Kittipa Wichailert, Khanchitpol Yousapornpaiboon","doi":"10.20474/jabs-3.4.3","DOIUrl":"https://doi.org/10.20474/jabs-3.4.3","url":null,"abstract":"This study focused on the brand equity that affects brand loyalty of the bottled mineral drinking water by integrating brand equity and brand loyalty models. This study adopted self-administered questionnaires to collect data and used quantitative data analysis. Four hundred of customers who drank the bottled mineral drinking water were collected. The sample was selected using purposive sampling method. The statistics used to analyze data were frequency, percentage, mean, standard deviation, and multiple regression analysis. The result indicates a mediating relationship among the dimensions of brand equity and brand loyalty. The result from multiple regressions showed significant level 0.000 for brand equity that affects brand loyalty of the bottled mineral drinking water. When broken into details, brand association and brand perceived quality significantly affect brand loyalty. As well as the combined effect of the model indicated that 52.6 percent of the total variance in brand equity affects brand loyalty of the bottled mineral drinking water.","PeriodicalId":224430,"journal":{"name":"Decision-Making in Economics eJournal","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134088159","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}
English abstract: The research investigates how the factors affect the behavior of choosing Phúc Thuận Thảo intercity bus on the way of Tuy Hòa city - Hochiminh city, by interviewing 180 passengers. The method of Cronbach’s Alpha analysis, EFA analysis and multiple regression analysis were used with the SPSS program.
The result shows that there are 05 factors affecting the behavior of choosing on Phúc Thuận Thảo intercity bus on the way Tuy Hòa city - Hochiminh city decreasingly: Service quality, Satisfaction, Service value, Subjective norm, Perceived behavioral control. The research also suggests some solutions to the management to enhance the selling capability.
Vietnamese abstract: Nghiên cứu này xem xét tác động của các yếu tố đến hành vi lựa chọn xe khách Phúc Thuận Thảo của hành khách tuyến Thành phố Tuy Hòa – Thành phố Hồ Chí Minh (Tp. TH – Tp. HCM), bằng việc khảo sát 180 hành khách. Lý thuyết Hành vi có kế hoạch (TPB) được sử dụng có điều chỉnh, cùng với phương pháp phân tích độ tin cậy Cronbach’s Alpha, phân tích nhân tố khám phá (EFA), và phân tích hồi quy bội, với phương tiện SPSS 20.0. Kết quả xử lý hồi quy bội cho thấy có 05 thành phần tác động đến hành vi lựa chọn xe khách Phúc Thuận Thảo, sắp theo thứ tự độ mạnh giảm dần: chất lượng dịch vụ, sự hài lòng, giá trị dịch vụ, chuẩn chủ quan, nhận thức kiểm soát hành vi. Từ đó, nghiên cứu đề xuất một số hàm ý quản trị đối với Ban Quản lý doanh nghiệp xe khách Phúc Thuận Thảo nhằm giúp nâng cao khả năng bán hàng.
{"title":"The Behavior of Choosing Phúc Thuận Thảo Intercity Bus on the Way of Tuy Hòa City – Hochiminh City (Hành vi lựa chọn xe khách Phúc Thuận Thảo tuyến TPTuy Hòa- TPHCM)","authors":"Ha Nam Khanh Giao, Tran thi Hong Hiep","doi":"10.31219/osf.io/rak4f","DOIUrl":"https://doi.org/10.31219/osf.io/rak4f","url":null,"abstract":"<b>English abstract:</b> The research investigates how the factors affect the behavior of choosing Phúc Thuận Thảo intercity bus on the way of Tuy Hòa city - Hochiminh city, by interviewing 180 passengers. The method of Cronbach’s Alpha analysis, EFA analysis and multiple regression analysis were used with the SPSS program.<br><br>The result shows that there are 05 factors affecting the behavior of choosing on Phúc Thuận Thảo intercity bus on the way Tuy Hòa city - Hochiminh city decreasingly: Service quality, Satisfaction, Service value, Subjective norm, Perceived behavioral control. The research also suggests some solutions to the management to enhance the selling capability.<br><br><b>Vietnamese abstract:</b> Nghiên cứu này xem xét tác động của các yếu tố đến hành vi lựa chọn xe khách Phúc Thuận Thảo của hành khách tuyến Thành phố Tuy Hòa – Thành phố Hồ Chí Minh (Tp. TH – Tp. HCM), bằng việc khảo sát 180 hành khách. Lý thuyết Hành vi có kế hoạch (TPB) được sử dụng có điều chỉnh, cùng với phương pháp phân tích độ tin cậy Cronbach’s Alpha, phân tích nhân tố khám phá (EFA), và phân tích hồi quy bội, với phương tiện SPSS 20.0.<br>Kết quả xử lý hồi quy bội cho thấy có 05 thành phần tác động đến hành vi lựa chọn xe khách Phúc Thuận Thảo, sắp theo thứ tự độ mạnh giảm dần: chất lượng dịch vụ, sự hài lòng, giá trị dịch vụ, chuẩn chủ quan, nhận thức kiểm soát hành vi. Từ đó, nghiên cứu đề xuất một số hàm ý quản trị đối với Ban Quản lý doanh nghiệp xe khách Phúc Thuận Thảo nhằm giúp nâng cao khả năng bán hàng.","PeriodicalId":224430,"journal":{"name":"Decision-Making in Economics eJournal","volume":"136 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-08-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126637668","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}
The economic theory states that as income rises, households tend to substitute traditional solid biomass cooking fuels with transitional and modern clean cooking fuels. However, in the case of Kenya, one of the few lucky African countries enjoying high growth rates whit a positive impact on the income level of its citizens, the switch to modern fuels is not always observed. In facts, Kenyan cooking practices are characterized by a strong dependence on solid biomass, with 82% of the households still using firewood or charcoal every day, and with a negative impact on the environment and severe health issues that need to be addressed. This paper informs on the current situation of households' cooking fuels consumption and maps out the country's cooking fuels market. By focusing on the analysis of the data collected through two independent field surveys, it then identifies the key factors affecting the fuel choices. In particular, the paper finds that affordability and access to credit are the variables with most explanatory power in predicting consumers' choices. The paper finally suggests specific actions to undertake in order to impact the households' decisions.
{"title":"Alternative Cooking Fuels in Kenya: How Can Household Decision-Making Be Impacted?","authors":"A. Rahnema, Félix Sánchez, P. Giordano","doi":"10.2139/ssrn.3102883","DOIUrl":"https://doi.org/10.2139/ssrn.3102883","url":null,"abstract":"The economic theory states that as income rises, households tend to substitute traditional solid biomass cooking fuels with transitional and modern clean cooking fuels. \u0000However, in the case of Kenya, one of the few lucky African countries enjoying high growth rates whit a positive impact on the income level of its citizens, the switch to modern fuels is not always observed. In facts, Kenyan cooking practices are characterized by a strong dependence on solid biomass, with 82% of the households still using firewood or charcoal every day, and with a negative impact on the environment and severe health issues that need to be addressed. \u0000This paper informs on the current situation of households' cooking fuels consumption and maps out the country's cooking fuels market. By focusing on the analysis of the data collected through two independent field surveys, it then identifies the key factors affecting the fuel choices. In particular, the paper finds that affordability and access to credit are the variables with most explanatory power in predicting consumers' choices. The paper finally suggests specific actions to undertake in order to impact the households' decisions.","PeriodicalId":224430,"journal":{"name":"Decision-Making in Economics eJournal","volume":"237 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121470838","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}
The study setting is Sorsogon City’s Microfinance Institutions (MFIs), operating within the city, confronted with hold-ups, credit pollution (multiple borrowing of some beneficiaries), negative paying attitude of the borrowers, and coercive way of loan payments by center chief. Answers to problems: 1) gender profile of borrowers of MFIs; 2) reasons why men seldom borrow; 3) gender role in decision making; and 4) gender role in business management; and through descriptive-evaluative research methods, focused-group discussion, interview/documentary analysis; generated these findings: 1) MFI beneficiaries’ profile reflects that 74.58% are women (mothers), 18.33% are men (fathers), 2.92% are eldest sons, and 4.17% are eldest daughters; with high school education, belonging to poor families of 3 to 6 members; engaged in vending; 2) Fathers and males seldom avail of loans because: a) MFI is designed for mothers; b) fathers are busy to attend meetings and activities; 3) Mothers are given full authority to decide how to spend loan proceeds provided they are managed well and records kept for transparency; 4) Decision making is shared between fathers and mothers, with little participation from eldest sons and/or daughters; and mothers hold prime responsibility over the business with minimal participation from fathers and/or children. MFIs may: 1) Review their mission, vision, goals, lending policies and programs, and employ better modalities that include gender roles in the family since many fathers and children are unemployed; 2) Studies on gender-based business can be conducted to document success stories of borrowers to encourage family members to engage in productive roles; 3) Beneficiaries must be coached by the MFIs in business implementation and decision making to empower them and stop the cycle of borrowing within period of five (5) years.
{"title":"Gender Roles of Microfinance Institutions’ Beneficiaries in Sorsogon City, Philippines","authors":"Rosemarie R. Jadie, M. Lanuzo","doi":"10.2139/ssrn.3139728","DOIUrl":"https://doi.org/10.2139/ssrn.3139728","url":null,"abstract":"The study setting is Sorsogon City’s Microfinance Institutions (MFIs), operating within the city, confronted with hold-ups, credit pollution (multiple borrowing of some beneficiaries), negative paying attitude of the borrowers, and coercive way of loan payments by center chief. Answers to problems: 1) gender profile of borrowers of MFIs; 2) reasons why men seldom borrow; 3) gender role in decision making; and 4) gender role in business management; and through descriptive-evaluative research methods, focused-group discussion, interview/documentary analysis; generated these findings: 1) MFI beneficiaries’ profile reflects that 74.58% are women (mothers), 18.33% are men (fathers), 2.92% are eldest sons, and 4.17% are eldest daughters; with high school education, belonging to poor families of 3 to 6 members; engaged in vending; 2) Fathers and males seldom avail of loans because: a) MFI is designed for mothers; b) fathers are busy to attend meetings and activities; 3) Mothers are given full authority to decide how to spend loan proceeds provided they are managed well and records kept for transparency; 4) Decision making is shared between fathers and mothers, with little participation from eldest sons and/or daughters; and mothers hold prime responsibility over the business with minimal participation from fathers and/or children. MFIs may: 1) Review their mission, vision, goals, lending policies and programs, and employ better modalities that include gender roles in the family since many fathers and children are unemployed; 2) Studies on gender-based business can be conducted to document success stories of borrowers to encourage family members to engage in productive roles; 3) Beneficiaries must be coached by the MFIs in business implementation and decision making to empower them and stop the cycle of borrowing within period of five (5) years.","PeriodicalId":224430,"journal":{"name":"Decision-Making in Economics eJournal","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115332976","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}
Using data from a university, we analyze a policy designed to increase employer-sponsored life insurance. The university increased basic life insurance holdings, which nudged employees with supplemental coverage to have more life insurance. In large part due to inertia, the nudge increased life insurance holdings one-for-one for those who could have undone it. Additionally, we find that expanding coverage options significantly increased total life insurance holdings for new hires who were not subject to inertia. These policy changes reduced uninsured vulnerabilities for two-thirds of employees. Our findings have important policy implications for addressing widespread disparities in life insurance coverage. (JEL D31, G22, D03, J32, J33, J38, H20)
{"title":"Nudging Life Insurance Holdings in the Workplace","authors":"Timothy F. Harris, Aaron Yelowitz","doi":"10.1111/ecin.12390","DOIUrl":"https://doi.org/10.1111/ecin.12390","url":null,"abstract":"Using data from a university, we analyze a policy designed to increase employer-sponsored life insurance. The university increased basic life insurance holdings, which nudged employees with supplemental coverage to have more life insurance. In large part due to inertia, the nudge increased life insurance holdings one-for-one for those who could have undone it. Additionally, we find that expanding coverage options significantly increased total life insurance holdings for new hires who were not subject to inertia. These policy changes reduced uninsured vulnerabilities for two-thirds of employees. Our findings have important policy implications for addressing widespread disparities in life insurance coverage. (JEL D31, G22, D03, J32, J33, J38, H20)","PeriodicalId":224430,"journal":{"name":"Decision-Making in Economics eJournal","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-10-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117859773","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}
Modern Portfolio Theory, standard asset pricing models and the concept of rational decision makers in efficient markets have major limitations as systems for modeling investor behavior and prices of financial assets. Financial market participants are not a uniform group of rational investors. Instead, they are an amalgamation of heterogeneous traders with varied and sometimes very divergent goals. In fact, not every financial market participant is an investor; a significant number of financial market participants are speculators. Thus, the current paradigm of using Modern Portfolio Theory to represent the activities of market participants as "investor behavior" leads to predictions that do not fit the outcomes that are observed in financial markets. First, we define "investment" and "an investor" from a value investing perspective according to Benjamin Graham. After discussing some of the standard conclusions of Modern Portfolio Theory and traditional asset pricing models, we present a number of propositions to motivate discussion on ways to rethink the current prevailing view of what is investment and who is an investor. This is with a goal to nudge academic finance back to the ideas of Benjamin Graham as encapsulated in the value investing paradigm, a system of investment decision making that has withstood the test of time and economic, business and financial cycles for over 80 years. We focus particularly on how investors perceive and handle risk in their portfolio management decisions. We conclude that the core value investing framework, as well as analytical tools and methodology as handed down by Benjamin Graham, are capable and sufficient to develop portfolio theory that incorporates time and investor behavior that is different from the homogeneous group of ultra-rational decision makers on whom the current popular models are based.
{"title":"Redefining Risk and Return in Common Stock Investment","authors":"Brandes Institute","doi":"10.2139/ssrn.2983986","DOIUrl":"https://doi.org/10.2139/ssrn.2983986","url":null,"abstract":"Modern Portfolio Theory, standard asset pricing models and the concept of rational decision makers in efficient markets have major limitations as systems for modeling investor behavior and prices of financial assets. Financial market participants are not a uniform group of rational investors. Instead, they are an amalgamation of heterogeneous traders with varied and sometimes very divergent goals. In fact, not every financial market participant is an investor; a significant number of financial market participants are speculators. Thus, the current paradigm of using Modern Portfolio Theory to represent the activities of market participants as \"investor behavior\" leads to predictions that do not fit the outcomes that are observed in financial markets. First, we define \"investment\" and \"an investor\" from a value investing perspective according to Benjamin Graham. After discussing some of the standard conclusions of Modern Portfolio Theory and traditional asset pricing models, we present a number of propositions to motivate discussion on ways to rethink the current prevailing view of what is investment and who is an investor. This is with a goal to nudge academic finance back to the ideas of Benjamin Graham as encapsulated in the value investing paradigm, a system of investment decision making that has withstood the test of time and economic, business and financial cycles for over 80 years. We focus particularly on how investors perceive and handle risk in their portfolio management decisions. We conclude that the core value investing framework, as well as analytical tools and methodology as handed down by Benjamin Graham, are capable and sufficient to develop portfolio theory that incorporates time and investor behavior that is different from the homogeneous group of ultra-rational decision makers on whom the current popular models are based.","PeriodicalId":224430,"journal":{"name":"Decision-Making in Economics eJournal","volume":"2014 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127503313","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}
A partial test for strategic behavior in bankruptcy filing may be formulated by testing whether consumers manipulate their debt and filing decision jointly, or not: that is, testing for endogeneity of financial benefit and the bankruptcy filing decision. Using joint maximum likelihood estimation of an extended discrete choice model, test results are consistent with non-strategic filing: financial benefit is exogenous to the filing decision. This result is confirmed in two different datasets (PSID and SCF). This result is consistent with an ex ante low net gain from a bankruptcy filing; a type of “rational inattention” to rare events such as bankruptcy.
{"title":"Strategic or Non-Strategic: The Role of Financial Benefit in Bankruptcy","authors":"Shuoxun Zhang, Tarun Sabarwal, L. Gan","doi":"10.2139/ssrn.3323024","DOIUrl":"https://doi.org/10.2139/ssrn.3323024","url":null,"abstract":"A partial test for strategic behavior in bankruptcy filing may be formulated by testing whether consumers manipulate their debt and filing decision jointly, or not: that is, testing for endogeneity of financial benefit and the bankruptcy filing decision. Using joint maximum likelihood estimation of an extended discrete choice model, test results are consistent with non-strategic filing: financial benefit is exogenous to the filing decision. This result is confirmed in two different datasets (PSID and SCF). This result is consistent with an ex ante low net gain from a bankruptcy filing; a type of “rational inattention” to rare events such as bankruptcy.<br>","PeriodicalId":224430,"journal":{"name":"Decision-Making in Economics eJournal","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125511003","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}
Due to the financial crisis, an increasing number of households face financial problems. This may lead to an increasing need for monitoring spending and budgets. We demonstrate that both cash and the debit card are perceived as helpful in this respect. We show that, on average, consumers responsible for the financial decision making within a household find the debit card more useful for monitoring their household finances than cash. Individuals differ in major respects, however. In particular, low earners and the liquidity-constrained prefer cash as a monitoring and budgeting tool. Finally, we present evidence that at an aggregated level, such preferences strongly affect consumer payment behaviour. We suggest that the substitution of cash by cards may slow down because of the financial crisis. Also, we show that cash still brings benefits that electronic alternatives have been unable to match. This suggests that inclusion of enhanced budgeting and monitoring features in electronic payment instruments may encourage consumers to use them more frequently.
{"title":"Cash versus Debit Card: The Role of Budget Control","authors":"Lola Hernández, N. Jonker, A. Kosse","doi":"10.2139/ssrn.2473957","DOIUrl":"https://doi.org/10.2139/ssrn.2473957","url":null,"abstract":"Due to the financial crisis, an increasing number of households face financial problems. This may lead to an increasing need for monitoring spending and budgets. We demonstrate that both cash and the debit card are perceived as helpful in this respect. We show that, on average, consumers responsible for the financial decision making within a household find the debit card more useful for monitoring their household finances than cash. Individuals differ in major respects, however. In particular, low earners and the liquidity-constrained prefer cash as a monitoring and budgeting tool. Finally, we present evidence that at an aggregated level, such preferences strongly affect consumer payment behaviour. We suggest that the substitution of cash by cards may slow down because of the financial crisis. Also, we show that cash still brings benefits that electronic alternatives have been unable to match. This suggests that inclusion of enhanced budgeting and monitoring features in electronic payment instruments may encourage consumers to use them more frequently.","PeriodicalId":224430,"journal":{"name":"Decision-Making in Economics eJournal","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126723057","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}
Pub Date : 2011-10-12DOI: 10.1093/OXFORDHB/9780199543175.013.0020
Ö. Özer, Yanchong Zheng
Psychological and emotional concerns are integral parts of human decision making, and thus important driving factors for the efficiency of economic systems full of human agents. This book chapter describes how these concerns induce human decisions that deviate from the predictions of neoclassical economic theories, and how such deviations affect pricing management in both areas of consumer pricing and pricing contracts among firms. We discuss an extensive spectrum of recent findings in behavioral economics, especially in a pricing context, and elaborate on the implications of these behavioral regularities for pricing strategies.
{"title":"Behavioral Issues in Pricing Management","authors":"Ö. Özer, Yanchong Zheng","doi":"10.1093/OXFORDHB/9780199543175.013.0020","DOIUrl":"https://doi.org/10.1093/OXFORDHB/9780199543175.013.0020","url":null,"abstract":"Psychological and emotional concerns are integral parts of human decision making, and thus important driving factors for the efficiency of economic systems full of human agents. This book chapter describes how these concerns induce human decisions that deviate from the predictions of neoclassical economic theories, and how such deviations affect pricing management in both areas of consumer pricing and pricing contracts among firms. We discuss an extensive spectrum of recent findings in behavioral economics, especially in a pricing context, and elaborate on the implications of these behavioral regularities for pricing strategies.","PeriodicalId":224430,"journal":{"name":"Decision-Making in Economics eJournal","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-10-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122638998","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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