IDEAS home Printed from https://ideas.repec.org/p/diw/diwrup/140en.html
   My bibliography  Save this paper

The Impact of Price Display on Financial Decisions

Author

Listed:
  • Antonia Gipp

Abstract

Credit decisions play an important role for the economic wellbeing of households. However, the complexity of products and varying price information display makes it hard for consumers to navigate this field. Empirical evidence has important implications for consumer protection policies, as many people fail to make optimal choices for themselves and struggle to understand credit cost information. Presenting additional information on absolute fees can help consumers to make more informed choices. This article reviews the literature on the impact of price display on financial decisions. Research from marketing and other fields provides related evidence.

Suggested Citation

  • Antonia Gipp, 2022. "The Impact of Price Display on Financial Decisions," DIW Roundup: Politik im Fokus 140, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwrup:140en
    as

    Download full text from publisher

    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.842987.de/DIW_Roundup_140_en.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sumit Agarwal & Souphala Chomsisengphet & Chunlin Liu & Nicholas S. Souleles, 2015. "Do Consumers Choose the Right Credit Contracts?," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 4(2), pages 239-257.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Conor B. Hamill & Raad Khraishi & Simona Gherghel & Jerrard Lawrence & Salvatore Mercuri & Ramin Okhrati & Greig A. Cowan, 2023. "Agent-based Modelling of Credit Card Promotions," Papers 2311.01901, arXiv.org, revised Nov 2023.
    2. Jin, Haofeng, 2022. "The effect of overspending on tariff choices and customer churn: Evidence from mobile plan choices," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).
    3. Tertilt, Michèle & Exler, Florian & Livshits, Igor & MacGee, Jim, 2020. "Consumer Credit with Over-Optimistic Borrowers," CEPR Discussion Papers 15570, C.E.P.R. Discussion Papers.
    4. Keys, Benjamin J. & Pope, Devin G. & Pope, Jaren C., 2016. "Failure to refinance," Journal of Financial Economics, Elsevier, vol. 122(3), pages 482-499.
    5. Francisco Gomes & Michael Haliassos & Tarun Ramadorai, 2021. "Household Finance," Journal of Economic Literature, American Economic Association, vol. 59(3), pages 919-1000, September.
    6. Adams, Paul & Hunt, Stefan & Palmer, Christopher & Zaliauskas, Redis, 2021. "Testing the effectiveness of consumer financial disclosure: Experimental evidence from savings accounts," Journal of Financial Economics, Elsevier, vol. 141(1), pages 122-147.
    7. Terence J. McElvaney & Peter D. Lunn & Féidhlim P. McGowan, 2018. "Do Consumers Understand PCP Car Finance? An Experimental Investigation," Journal of Consumer Policy, Springer, vol. 41(3), pages 229-255, September.
    8. Lukas, M., 2019. "Relative prices and product substitution: Evidence from shocks to consumer credit interest rates," Journal of Behavioral and Experimental Finance, Elsevier, vol. 21(C), pages 39-49.
    9. Cumming, Fergus, 2018. "Mortgages, cash-flow shocks and local employment," Bank of England working papers 773, Bank of England.
    10. Lunn, Pete & Bohacek, Marek & McGowan, Feidhlim, 2016. "The Surplus Identification Task and Limits to Multi-Attribute Consumer Choice," Papers WP536, Economic and Social Research Institute (ESRI).
    11. Neil Bhutta & Jacob Goldin & Tatiana Homonoff, 2016. "Consumer Borrowing after Payday Loan Bans," Journal of Law and Economics, University of Chicago Press, vol. 59(1), pages 225-259.
    12. Paul D. Adams & Stefan Hunt & Christopher Palmer & Redis Zaliauskas, 2019. "Testing the Effectiveness of Consumer Financial Disclosure: Experimental Evidence from Savings Accounts," NBER Working Papers 25718, National Bureau of Economic Research, Inc.
    13. Lukasz Drozd & Michal Kowalik, 2019. "Credit Cards and the Great Recession: The Collapse of Teasers," 2019 Meeting Papers 1047, Society for Economic Dynamics.
    14. Lunn, Pete & McGowan, Féidhlim & Howard, Noel, 2018. "Do some financial product features negatively affect consumer decisions? a review of evidence," Research Series, Economic and Social Research Institute (ESRI), number RS78.
    15. Cumming, Fergus, 2022. "Mortgage cash-flows and employment," European Economic Review, Elsevier, vol. 144(C).
    16. Hong Ru & Antoinette Schoar, 2020. "Do credit card companies screen for behavioural biases?," BIS Working Papers 842, Bank for International Settlements.
    17. Gärtner, Florian & Semmler, Darwin & Bannier, Christina E., 2023. "What could possibly go wrong? Predictable misallocation in simple debt repayment experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 28-43.
    18. Wei, Li & Peng, Ming & Wu, Weixing, 2021. "Financial literacy and fraud detection——Evidence from China," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 478-494.
    19. Campbell, Daniel & Grant, Andrew & Thorp, Susan, 2022. "Reducing credit card delinquency using repayment reminders," Journal of Banking & Finance, Elsevier, vol. 142(C).
    20. Sumit Agarwal & Artashes Karapetyan, 2022. "Information Salience and Mispricing in Housing," Management Science, INFORMS, vol. 68(12), pages 9082-9106, December.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:diw:diwrup:140en. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bibliothek (email available below). General contact details of provider: https://edirc.repec.org/data/diwbede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.