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4 - Consumer Financial Decision-Making

from 1 - Consumer Psychology of Individuals

Published online by Cambridge University Press:  30 March 2023

By
Abigail B. Sussman ,
Yusu Wang  and
Anastasiya Apalkova
Edited by
Cait Lamberton ,
Derek D. Rucker  and
Stephen A. Spiller
Cait Lamberton
Affiliation:
Wharton School, University of Pennsylvania
Derek D. Rucker
Affiliation:
Kellogg School, Northwestern University, Illinois
Stephen A. Spiller
Affiliation:
Anderson School, University of California, Los Angeles
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Summary

Research in consumer psychology is essential for developing a deep understanding of how consumers make financial decisions as well as for creating solutions to improve this process. Fortunately, there has been substantial growth in research in this area among consumer behavior and behavioral economics scholars in recent years, including in areas such as budgeting, spending, saving, investing, and borrowing and repaying credit card debt. The aim of the current chapter is to provide an overview of some of the most exciting developments in this area over the last decade that advance our understanding of the psychology underlying financial decisions. Key concepts we examine as influencing financial decisions include categorization, goals and motivation, choice architecture and nudges, social context, wealth perceptions, financial literacy, financial well-being and financial scarcity. In addition, we provide a call to action and roadmap for future research in the area.

Keywords

financial decision-makingconsumer psychologybudgetingfinancial wellness
Type
Chapter
Information
The Cambridge Handbook of Consumer Psychology , pp. 90 - 121
Publisher: Cambridge University Press
Print publication year: 2023

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