Journal article
Imperfect Recall: The Impact of Composite Spending Information Disclosure on Credit Card Spending
Journal of consumer policy, Vol.38(1), pp.93-104
03/01/2015
DOI: 10.1007/s10603-014-9279-8
Abstract
In the past 30 years, consumer credit card debt has expanded tremendously. We know that consumers willingly pay more for the same product when using credit cards versus cash, contrary to the classical rational agent model. Research suggests that it happens due to three imperfections in the classical model: imperfect self-knowledge, imperfect willpower, and imperfect recall. Traditional solutions to credit abuse address the first two imperfections; we examine the third. We propose reminding consumers, on every receipt, how much they have spent cumulatively. We test the effect of this proposal on spending via a controlled experiment. We find that printing this additional information on credit card receipts leads to a significant 9.6% reduction in overall spending compared to the status quo. We discuss the public policy implications of this finding as well as implementation issues.
Details
- Title: Subtitle
- Imperfect Recall: The Impact of Composite Spending Information Disclosure on Credit Card Spending
- Creators
- Amit Poddar - Salisbury UniversityCameron M. Ellis - University of GeorgiaTimucin Ozcan - Southern Illinois University Edwardsville
- Resource Type
- Journal article
- Publication Details
- Journal of consumer policy, Vol.38(1), pp.93-104
- Publisher
- Springer Nature
- DOI
- 10.1007/s10603-014-9279-8
- ISSN
- 0168-7034
- eISSN
- 1573-0700
- Number of pages
- 12
- Grant note
- J Whitney College of Business Summer Research Grant
- Language
- English
- Date published
- 03/01/2015
- Academic Unit
- Finance
- Record Identifier
- 9984380709202771
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