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Explanatory mechanisms of the decision to buy on credit: The role of materialism, impulsivity and financial knowledge

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  • Mette, Frederike Monika Budiner
  • de Matos, Celso Augusto
  • Rohden, Simoni F.
  • Ponchio, Mateus Canniatti

Abstract

The purpose of this research was to investigate the mechanisms that explain why people choose to buy on credit. The individual characteristics of materialism, impulsivity and financial knowledge were analysed in order to better understand the relationship that exists between payment conditions and the decision to purchase on credit. Two experiments with a total sample of 409 respondents were conducted. Our analyses reveal that the offer of a discount for payment in cash has a negative effect on the propensity to buy on credit, regardless of whether interest was charged or not. Personal characteristics also play an important moderating role: individuals with high levels of materialism and impulsivity tend to buy on credit more. When the type of product is hedonic as opposed to utilitarian, there are larger variations in the average intention to buy on credit.

Suggested Citation

  • Mette, Frederike Monika Budiner & de Matos, Celso Augusto & Rohden, Simoni F. & Ponchio, Mateus Canniatti, 2019. "Explanatory mechanisms of the decision to buy on credit: The role of materialism, impulsivity and financial knowledge," Journal of Behavioral and Experimental Finance, Elsevier, vol. 21(C), pages 15-21.
    • Handle: RePEc:eee:beexfi:v:21:y:2019:i:c:p:15-21
    DOI: 10.1016/j.jbef.2018.10.002
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    Cited by:

    1. Asli Elif Aydin, 2022. "Psychological and demographic factors influencing responsible credit card debt payment," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 27(1), pages 17-26, March.
    2. Kumar, Satish & Rao, Sandeep & Goyal, Kirti & Goyal, Nisha, 2022. "Journal of Behavioral and Experimental Finance: A bibliometric overview," Journal of Behavioral and Experimental Finance, Elsevier, vol. 34(C).
    3. Robert Powell & Anh Do & Denise Gengatharen & Jaime Yong & Rasiah Gengatharen, 2023. "The relationship between responsible financial behaviours and financial wellbeing: The case of buy‐now‐pay‐later," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 4431-4451, December.
    4. Lebdaoui, Hind & Chetioui, Youssef, 2021. "Antecedents of consumer indebtedness in a majority-Muslim country: Assessing the moderating effects of gender and religiosity using PLS-MGA," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).

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    More about this item

    Keywords

    Decision-making; Purchase on credit; Materialism; Impulsivity; Financial knowledge; Experiment;
    All these keywords.

    JEL classification:

    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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