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Mobile Apps and Financial Decision Making

Author

Listed:
  • Bruce Carlin
  • Arna Olafsson
  • Michaela Pagel

Abstract

We exploit the release of a mobile application for a financial aggregation platform to analyze how technology adoption changes consumer financial decision making. The app reduced the cost of accessing personal financial information, and we find that this led to a drop in non-sufficient fund fees. Because of the manner in which these fees are incurred, this represents an unambiguous welfare improvement for users of the platform. The leading explanation for this result appears to be mistake avoidance due to easier access to information.

Suggested Citation

  • Bruce Carlin & Arna Olafsson & Michaela Pagel, 2023. "Mobile Apps and Financial Decision Making," Review of Finance, European Finance Association, vol. 27(3), pages 977-996.
    • Handle: RePEc:oup:revfin:v:27:y:2023:i:3:p:977-996.
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    File URL: http://hdl.handle.net/10.1093/rof/rfac040
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    References listed on IDEAS

    as
    1. Leonardo Bursztyn & Stefano Fiorin & Daniel Gottlieb & Martin Kanz, 2019. "Moral Incentives in Credit Card Debt Repayment: Evidence from a Field Experiment," Journal of Political Economy, University of Chicago Press, vol. 127(4), pages 1641-1683.
    2. Victor Stango & Jonathan Zinman, 2014. "Limited and Varying Consumer Attention: Evidence from Shocks to the Salience of Bank Overdraft Fees," The Review of Financial Studies, Society for Financial Studies, vol. 27(4), pages 990-1030.
    3. repec:wly:hlthec:v:25:y:2016:i::p:43-56 is not listed on IDEAS
    4. Bruce Carlin & Arna Olafsson & Michaela Pagel, 2019. "Generational Differences in Managing Personal Finances," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 54-59, May.
    5. Arna Olafsson, 2016. "Household Financial Distress and Initial Endowments: Evidence from the 2008 Financial Crisis," Health Economics, John Wiley & Sons, Ltd., vol. 25(S2), pages 43-56, November.
    6. Emily Breza & Martin Kanz & Leora F. Klapper, 2020. "Learning to Navigate a New Financial Technology: Evidence from Payroll Accounts," NBER Working Papers 28249, National Bureau of Economic Research, Inc.
    7. Victor Stango & Jonathan Zinman, 2009. "What Do Consumers Really Pay on Their Checking and Credit Card Accounts? Explicit, Implicit, and Avoidable Costs," American Economic Review, American Economic Association, vol. 99(2), pages 424-429, May.
    8. Paolina C Medina, 2021. "Side Effects of Nudging: Evidence from a Randomized Intervention in the Credit Card Market [Regulating consumer financial products: Evidence from credit cards]," The Review of Financial Studies, Society for Financial Studies, vol. 34(5), pages 2580-2607.
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    More about this item

    Keywords

    Household Finance; Mobile Apps; Financial Mistakes; Bank Fees; Attention to Personal Finances; Access to Financial Information; Bank Data;
    All these keywords.

    JEL classification:

    • G5 - Financial Economics - - Household Finance
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles

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